Buying Your First Home In 2009? Claim $8K In Tax Credit!!!

  Now is the time to purchase your first home!

Last month, President Obama signed into legislation a $789 billion economic stimulus package that included something very important: an $8,000 tax credit for first-time home buyers!

This credit is a far cry from the one passed last summer.

Last summer Congress passed a $7,500 tax credit for first-time home buyers that sounded good at first glance. However, a closer look at the details revealed that buyers actually had to pay the tax credit back. It really was just a zero interest loan. Just 111 people in the whole country applied for the program.

But this new program is making it a real deal to purchase a first home. The tax credit does not have to be repaid and is for 10 percent (up to $8,000) of the price of the home.

A “first-time home buyer” is anyone who has not owned a principal residence for the last three years. Even if you’ve owned a vacation home, but not a principal residence, within the last three years you can still qualify for the credit. So if the last date you owned a home was three years ago from today, you could buy a home and qualify.

An important part of the program that everyone needs to understand is that to qualify, you have to buy the home before Dec 1, 2009. It’s retroactive to Jan. 1, so if you bought your first home any time after the first of the year you can still qualify.

There are income limits, though. Single people who buy their first home cannot make more than $75,000 to qualify for a full credit. And if you are married, you cannot have a household adjusted gross income of more than $150,000. If you make more than that, you may still be eligible for reduced credits.

There is a requirement that buyers must live in the new home for at least three years. If it is sold within three years the credit must be returned to the government. Exceptions will be made in certain cases such as death or divorce.

So, how does someone take advantage of the $8,000 tax credit? If you buy a new home between January 1 and December 1, 2009, you claim the credit when you file your 2008 taxes (before April 15 this year so you can get your money back now!) or when you file your 2009 taxes early next year.

Now is the time to purchase a home.  An $8,000 tax credit coupled with the lowest interest rates in 30 years, joined by an unusually large inventory of homes from which to choose, offered by sellers who have lowered their prices well below what they were worth just two years ago.

This perfect storm won’t last long; the buyer’s market window will be closing before the end of 2009. It’s time to buy.

For more information, including guidance for people who bought their first homes in 2008, visit IRS.gov.

To learn more about the overall implementation of the Recovery Act, visit Recovery.gov.

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Real Estate: Home Sales UP 5.1% Nationwide

 Nationally existing home sales were up 5.1 percent according to the National Association of Realtors which equals to 4.72 million homes sold.  This is the largest monthly sales increase since July 2003.

This was an unexpected but pleasant surprise since economists were anticipating another drop in sales to 4.45 million units from the 4.49 million annual rate in January.

More than 40 percent of sales nationally were of foreclosed properties or properties in default that were being sold for less than the mortgage balance and most sales were for homes at the bottom of the price ladder. The more expensive homes aren’t selling as well, and median prices continue to drop. Half of all homes sold last month went to first-time buyers.  Single family sales are selling better than condos because of differing mortgage availability.

Region	February 2009 Existing Homes Sales Increased By:
Northeast	15.6%
South	6.1%
Midwest	1%
West	2.6%*

 

* Sales in the West are up a sharp 30.4% over the year due to strong sales in foreclosure heavy regions of  Southern California and Las Vegas.

Region	February 2009 Median Price	February 2008 Median Price	Percentage
Northeast	$251,200	$263,258	4.8%
South	$146,700	$158,143	7.8%
Midwest	$131,000	$141,218	7.8%
West	$204,600	$265,980	30%

 

Economists and real estate agents are watching carefully to see if low mortgage rates — which went below 5 percent last week — will boost sales.  An $8,000 federal tax credit aimed at first-time buyers already has brought new shoppers into the market.

New listings in the northeast region fell by nearly 10 percent in February.  This is an indicator that the flood of available homes might be drying up.  If there in fact is less inventory, then that will help rebuild the real estate market.  If there is less supply and more demand for homes then the value of real estate will start to increase again.

President Obama: Our Trillion Dollar Man

  President Obama and his administration doesn’t want to nationalize our banks so they have unveiled a plan to remove toxic assets from banks’ books in hopes that the plan will breathe life into our financial system so that the government doesn’t have to take them over.

The plan is to finance up to $1 trillion in purchases of illiquid real-estate assets, using $75 billion to $100 billion of the Treasury’s remaining bank-rescue funds. The Public-Private Investment Program will also rely on Federal Reserve financing and FDIC debt guarantees. Doing this will allow banks to clean up their balance sheets and free up the money they were loaned under the TARP so that money can start flowing again and help resurrect our economy.

The government is taking a risk but we cannot solve a financial crisis of this magnitude without the government assuming some risk. It may take months for us to see if this is a successful approach since the government, private sector and banks have to collaborate to make this plan work.  Private asset managers have to be selected (in May), private investors have to participate and banks have to commit to sell their downgraded investments. The point of the program is to save the taxpayers’ money by attracting private capital. The private sector will invest alongside the American taxpayer on an equal basis, so both parties share the downside risk and upside potential. There is a great risk/reward potential here.

The second thing needed for this plan to work is strict oversight by Secretary Geithner. The Secretary has to keenly oversee what the banks are doing to ensure that bank executives continuously do the right things to get our economy back on track.  We have already seen that bank executives are confused, oblivious and disconnected from the reality of what they have done to our economy.  Geithner needs to keep them focused.

Fifty percent of the Treasury’s funds will go to a “Legacy Loans Program” that will be overseen by the FDIC. The Treasury will provide half of the capital going to purchase a pool of loans from banks, with private fund managers putting up the rest. The FDIC will then guarantee financing for the investors — up to a maximum of six times the capital or equity provided.

The FDIC — which has extensive experience disposing of devalued loans from taking over failed banks — will hold auctions for the pools of loans, which will be controlled and managed by the private investors with oversight by the FDIC.

Geithner is expecting a wide range of investors to participate in the Legacy Loans Program, including insurance companies, pension funds and even individual investors.

The other fifty percent of the Treasury’s contribution will go to the “Legacy Securities Program.” The objective of this initiative is to generate prices for securities backed by mortgages that are no longer traded because investors have little confidence in the principal value of the home loans.

Under this program, the Fed will expand an existing feature that provides financing for investor purchases of asset-backed securities. The Term Asset-Backed Securities Loan Program will be broadened to take on assets such as residential mortgage-backed securities that were originally rated AAA and sold by private banks.

The Treasury will also approve as many as five asset managers “with a demonstrated track record of purchasing legacy assets” that will buy the securities.

The managers will be given time to raise private capital and receive matching funds from the Treasury.  Geithner is hoping that the private sector will compete to be partners with the government.

There is some fear by investors that if they do well by participating in this program the government will tax them at 90 percent or busloads of people might turn up at their doors. 

I don’t think that will happen, if this works and the market is on an upswing and everyone is making money  populist views will change and these private investors will be hailed as heroes.

A few weeks ago we were all in fear that banks would fail en masse.  If banks had failed en masse, then massive business failures would have followed and massive unemployment would have been the result and that would have led to more foreclosures, and more bank failures and more business failures and more foreclosures and this vicious cycle would not have ended until there was a complete collapse of our economic system.

President Obama stopped the economic free-fall and we have to recognize that and give him credit for it. 

There is more than one way to skin a cat so all of us will not agree 100 percent on this plan, but we have a plan and we must now give this trillion dollar plan the chance to work. 

As Warren Buffet said, we’re in an economic war and we have to start acting like it.  Democrats and Republicans alike have to put aside ideological differences and realize that our economy is under attack by our competitors and we have to band together since we are all in this together. 

If you are an American and you don’t want to see President Obama succeed then it’s time for you to give up your citizenship and move to another country — seriously.

We’re all Americans.

United we stand, divided we fall. 

Let’s pray for success!

Chinese Made Dry Walls Making Houses Sick

My sister just called to tell me that she heard about this story on CNN.  This is another instance of how lack of regulation by the Bush administration has caused harm to the American public at large.  If these Chinese made dry-walls can decay and eat away air conditioning systems, what can they do to our lungs?  This is an outrage.  If your home is emitting any of these odors or you see any of these conditions in your home call one of these attorneys.  Read the story below:

Officials are looking into claims that Chinese-made drywall installed in some Florida homes is emitting smelly, corrosive gases and ruining household systems such as air conditioners, the Consumer Product Safety Commission says.

The Florida Health Department, which is investigating whether the drywall poses any health risks, said it has received more than 140 homeowner complaints. And class-action lawsuits allege defective drywall has caused problems in at least three states — Florida, Louisiana and Alabama — while some attorneys involved claim such drywall may have been used in tens of thousands of U.S. homes.

Homeowners’ lawsuits contend the drywall has caused them to suffer health problems such as headaches and sore throats and face huge repair expenses.

The drywall is alleged to have high levels of sulfur and, according to homeowners’ complaints, the sulfur-based gases smell like rotten eggs and corrode piping and wiring, causing electronics and appliances to fail.

“It’s economically devastating, and it’s emotionally devastating,” said Florida attorney Ervin A. Gonzalez, who filed one of the lawsuits. It would cost a third of an affected home’s value to fix the dwelling, Gonzalez said.

“The interior has to be gutted, the homeowners have to continue paying mortgages, and they have to pay for a [temporary] place to live,” Gonzalez said.

The CPSC has been investigating claims in Florida for more than a month, according to commission spokesman Joe Martyak. He would not confirm whether CPSC is checking other states or reveal how many cases it is probing.

The Florida complaints generally involve homes built or renovated in 2005 and 2006, when a building boom and post-hurricane reconstruction caused a U.S. drywall shortage that spurred builders to turn to imports, Martyak said.

The allegations come after a number of recent safety problems with other Chinese exports, ranging from toys to pet food.

Dick and Nancy Nelson, who say the Florida retirement home they bought new in 2006 has Chinese-manufactured drywall, contend all their appliances with copper are failing, according to CNN affiliate WFTS-TV.

“The washing machine, the dryer, the microwave, and a refrigerator — these are all brand new appliances, and they’re breaking down,” Nancy Nelson of Palmetto told the Tampa station. The Nelsons are among those who have complained to the state health department.

In a neighborhood in Homestead, Florida, owners of homes with Chinese-manufactured drywall say the dwellings smell like rotten eggs especially on humid days, according to CNN affiliate WPLG-TV.

Electronics and appliances with copper components stopped working in short order, and copper pipes and wiring turned black, homeowners told the Miami station.

“My dream has turned into a nightmare,” one of the homeowners, Felix Martinez, told WPLG-TV. He said he closed on the home in August 2006.

Michael Foreman, head of construction consulting firm Foreman & Associates in Sarasota, Florida, said he’s been investigating drywall complaints in that state since last year and is sharing information with at least one group of lawyers preparing lawsuits on the matter. Based on shipping records, Foreman estimates the United States in 2006 and the first two months of 2007 imported enough drywall from Chinese manufacturers named in lawsuits to produce at least 50,000 homes at a size of 2,000 square feet each.

Florida ports alone took in enough of that drywall during those 14 months to build 30,000 homes of that size, he estimated, citing records he obtained from the Port Import Export Reporting Service, a company that collects information on cargoes entering and leaving U.S. ports. Foreman said he has yet to see import records from 2004 and 2005, years covering what he said was a building boom with a high demand for drywall.

Two Florida attorneys involved in separate class-action lawsuits, Gonzalez and Jordan Chaikin, said they, too, believe shipping records indicate tens of thousands of residences in the United States, with a good chunk of them in Florida, may have drywall from the manufacturers.

“The breadth of this thing is a lot bigger than people think,” said Chaikin of the Parker Waichman Alonso law firm in Bonita Springs. Chaikin said the problem is perhaps more easily recognizable in Florida because humidity exacerbates it.

An Alabama-based homebuilder alleges that Chinese-manufactured drywall in 40 houses it built in 2005 and 2006 — 32 in Alabama and eight in Florida — caused corrosion or odor problems. The builder, Mitchell Co., has filed a class-action lawsuit in Florida against certain manufacturers, attorney Steve Nicholas said.

“We filed on behalf of builders because we believe … they’re going to be the ones with the initial loss” to fix the problems, said Nicholas, of Alabama law firm Cunningham Bounds.

The Miami suit seeks compensation and medical monitoring of the homeowners.

To read this story in full go to:

http://www.cnn.com/2009/US/03/18/chinese.drywall/index.html