On November 6, 2009, President Obama signed a $24 billion economic stimulus bill which will provide additional unemployment benefits and give tax credits to prospective homebuyers. The bill also includes tax cuts for struggling businesses. The bill was implemented because of the 10.2% unemployment rate which is the highest since 1983. This results in the 4th unemployment benefit extension in the past 18 months.
According to House Majority Leader Steny Hoyer, approximately one third of the 15 million people unemployment have been out of work for at least six months.
The bill will provide another 14 weeks of benefits to those unemployed who have exhausted their benefits or will exhaust them by the end of the year. Unemployed residents who live in states where the jobless rate is 8.5% or higher will get an additional six weeks including Idaho, Pennsylvania, New York, West Virginia, Arizona, Mississippi, Ohio, Illinois, Tennessee, Alabama, Kentucky, South Carolina, Nevada, Rhode Island, California, Florida, and Georgia.
Presidential spokesman Robert Gibbs stated "But I believe -- I think most would tell you -- that the (unemployment) rate is more likely than not to get a little worse before it gets better".
The additional 20 weeks (14 plus six for high states) could provide a maximum of 99 weeks to those residents who live in high unemployment rate states.
The bill will extend the $8,000 first-time homebuyer tax credit which was going to expire at the end of November 2009 but has been extended to June 2010 provided a homebuyer signs a contract by the end of April 2010. The program will also provide a $6,500 tax credit for existing homeowners who buy a new home after living in their current residence for at least five years.
Showing posts with label potential homeowner. Show all posts
Showing posts with label potential homeowner. Show all posts
Tuesday, November 17, 2009
Thursday, September 03, 2009
A Victory for Mortgage Borrowers
Many Americans shopping for a home experience obstacles such as: lenders or mortgage companies losing paperwork, administrative delays, unexpected errors on credit reports, unexpected fees and settlements costs, predatory lending, and unethical and deceptive practices. Buying a home is one of the most frustrating, scary and stressful processes in life. As the saying goes "only the strong survive" and only the strong are able to handle the pressure that is felt when trying to purchase a home.
The amount of paperwork provided to potential homeowners at settlement ranges on average from 30-70 pages of documents that must be read and signed. Although many homeowners neglect to read the paperwork which can hurt them in the future. Even if you take the time to read the paperwork, all of the technical jargon used is difficult to understand and it takes a lawyer to help you decipher the jargon.
Well, help is here. The Federal Reserve board implemented new rules that prohibit deceptive lending practices involving loans that are made on or after October 1, 2009 but unfortunately does not help those who were misled during the past two years.
The new rules require that disclosures must be provided in a timely manner, ensuring accurate appraisals are provided which will prevent a potential homeowner from borrowing too much money or overpaying for a home, handling of loan payments in a timely manner to prevent unnecessary late fees (in some instances borrowers are charged late fees although their payments were received on time), and inform borrowers about deducting late payment fees from their monthly mortgage payment.
Lenders will continue to be required to provide early disclosures to borrowers for loans to purchase a primary residence but will also have to provide early disclosures for refinances and home equity loans.
Additional protections include protecting subprime loan borrowers from receiving expensive mortgages by ensuring early disclosures of mortgage terms and costs and to verify the borrower's income, assets and other debts when offering a subprime loan.
A minimum of seven business days must pass between when a lender delivers the early disclosures to a borrower and closing. The borrower must receive a corrected disclosure at least three business days before the loan closing if the Annual Percentage Rate (APR) increases by a certain amount above what was previously disclosed to the borrower.
Starting October 1, 2009, Federal rules will ban several deceptive or misleading advertising practices. The rule prohibits any advertisement from indicating that a rate or payment is "fixed" when it can change. The new rule also requires advertisements to show all interest rates or payment amounts with equal spacing and in close proximity to any low promotional rate or payment.
Starting January 1, 2010, the Department of Housing and Urban Development (HUD) will require lenders and mortgage brokers to use the same form to provide good faith estimates of settlement costs and disclosures. It will also include changes to HUD's Uniform Settlement Statement (HUD-1 form) that will make it easier for borrowers to compare estimated costs to actual costs. HUD's rules will limit how much actual costs can increase above the estimates and hopes the new rules will each homeowner approximately $700 at closing.
The amount of paperwork provided to potential homeowners at settlement ranges on average from 30-70 pages of documents that must be read and signed. Although many homeowners neglect to read the paperwork which can hurt them in the future. Even if you take the time to read the paperwork, all of the technical jargon used is difficult to understand and it takes a lawyer to help you decipher the jargon.
Well, help is here. The Federal Reserve board implemented new rules that prohibit deceptive lending practices involving loans that are made on or after October 1, 2009 but unfortunately does not help those who were misled during the past two years.
The new rules require that disclosures must be provided in a timely manner, ensuring accurate appraisals are provided which will prevent a potential homeowner from borrowing too much money or overpaying for a home, handling of loan payments in a timely manner to prevent unnecessary late fees (in some instances borrowers are charged late fees although their payments were received on time), and inform borrowers about deducting late payment fees from their monthly mortgage payment.
Lenders will continue to be required to provide early disclosures to borrowers for loans to purchase a primary residence but will also have to provide early disclosures for refinances and home equity loans.
Additional protections include protecting subprime loan borrowers from receiving expensive mortgages by ensuring early disclosures of mortgage terms and costs and to verify the borrower's income, assets and other debts when offering a subprime loan.
A minimum of seven business days must pass between when a lender delivers the early disclosures to a borrower and closing. The borrower must receive a corrected disclosure at least three business days before the loan closing if the Annual Percentage Rate (APR) increases by a certain amount above what was previously disclosed to the borrower.
Starting October 1, 2009, Federal rules will ban several deceptive or misleading advertising practices. The rule prohibits any advertisement from indicating that a rate or payment is "fixed" when it can change. The new rule also requires advertisements to show all interest rates or payment amounts with equal spacing and in close proximity to any low promotional rate or payment.
Starting January 1, 2010, the Department of Housing and Urban Development (HUD) will require lenders and mortgage brokers to use the same form to provide good faith estimates of settlement costs and disclosures. It will also include changes to HUD's Uniform Settlement Statement (HUD-1 form) that will make it easier for borrowers to compare estimated costs to actual costs. HUD's rules will limit how much actual costs can increase above the estimates and hopes the new rules will each homeowner approximately $700 at closing.
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