Hey Dude, Where’s My $8000?

Market Brief: CPI comes in below expectations, and the Empire State (that’s New York, for those of you that don’t speak slogan) manufacturing index comes in crappy, but not as crappy as was expected.  Bonds reacted by wandering around slowly, like a toddler just after a nap.  Nothing much happening though rates are trending slightly upward.
Critical Info: There are a whole bunch of programs released recently that are causing confusion in the mortgage market.  You’re going to get letters about government programs that reduce your interest rate magically with no cost at all. These are fishing expeditions.  Here is what is actually out there:
1. $8000 tax credit – this is a federal government program for first-time homebuyers.  There are certain income restrictions, and it is only for owner-occupied properties.  Claimed on your taxes, either this year or next.  Must be for properties purchased after January 1 and before December 1 of 2009.  Credit does not have to be paid back, as long as you are in the property for 3 years from the date of purchase.  Credit paid to you even if you owe no tax.
2. $6000 Home Run Grant – this is a State of Utah program only for properties that have not been lived in.  Cash is wired directly to the title company and can be used at the close for any purpose. There are limited income restrictions, and again, only for owner-occupied properties.  Only 1600 of these were authorized; as of this morning, there were 1340 of them left.  We’ve done these and know the drill.
3. Home Affordable Refinance – this is a lender-driven refinance program that can take your loan up to 105% of the value of your house.  WE CAN DO THESE. However, the rules and underwriting guidelines have not yet been introduced by FNMA/FHLMC, so no matter what you are told, these are not on the street yet.  Probably the end of the month.
4. Home Affordable Modification – this is a US Treasury-driven program through servicing lenders, in which they modify the terms of the loan they hold.  You do this one yourself, or with a modification company (check them out carefully, but they can be VERY helpful) by calling the lender directly.  Qualifiers are determined by the servicing lender, but you have to be “in imminent default”, which most lenders are interpreting as having missed payments, lost your job, or something like that. Substantial modifications are possible, including interest-rate reductions, term extensions, principal forgiveness, all sorts of things.
There.  All you ever wanted to know and more.  Hit me back with questions – as always, this is general advice that goes out to the general public, and your specific situation can and will vary.  Please call or email, and we’ll give you the straight scoop for your situation.

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