[sherrigreeneyes]

Hi loan officers and realtors, can you explain this $15,000 tax credit
for home buyers, who qualifies, how this will work, how we will benefit?

It is my understanding that the "old" plan was a $7500 loan, how does this plan work?

[tony soprano]

Originally Posted by sherrigreeneyes

Hi loan officers and realtors, can you explain this $15,000 tax credit
for home buyers, who qualifies, how this will work, how we will benefit?

It is my understanding that the "old" plan was a $7500 loan, how does this plan work?

The current first time home buyer's tax "credit" in place is actually a no interest loan, as it has to be repaid over 15 years. The current Dem proposal for the stimulus bill is to make it a true credit, i.e., it doesn't need to be paid back. The Republican proposal is a tax credit of $15K or 10% of the home purchase price, whichever is less. It's not limited to first time buyers either. It's all being debated so we'll have to see what actually sticks

[Daddys///M3]

Actually I believe that they amended or were planning to amend the original tax credit plan so that it was truly a tax credit and not a no-interest loan.

The Senate has voted to include this in the new stimulus bill. The new bill must still make it's rounds over the next couple of weeks, and no details have been released regarding if it requires payback or not. Tony is right though. At this point they are extending this to anyone that buys a home this year.

[tony soprano]

Originally Posted by Daddys///M3

Actually I believe that they amended or were planning to amend the original tax credit plan so that it was truly a tax credit and not a no-interest loan.

As is stands right now, it's a loan. If you closed escrow in 2008, you're repaying the $7,500. Both the House and Senate versions of the stimulus bill propose making it a true tax credit, but it's not a done deal.

The Senate has voted to include this in the new stimulus bill. The new bill must still make it's rounds over the next couple of weeks, and no details have been released regarding if it requires payback or not. Tony is right though. At this point they are extending this to anyone that buys a home this year.

The Dems of course have enough votes to pass their own proposals, but in the interest of bipartisanship they've solicited Republican input, which resulted in the Republican proposal that I referred to in my previous post.

[Tiger Beer]

So everytime anyone in the U.S. buys a house, taxpayers MUST pay $15,000.

I hate this proposal.

We all also know that this means everything in the housing will be inflated by $15,000 over its true value as well if this passes.

[airics]

i like the idea of 4% fixed backed by the gov't open to everyone (not just people late)

[Daddys///M3]

Originally Posted by Tiger Beer

So everytime anyone in the U.S. buys a house, taxpayers MUST pay $15,000.

I hate this proposal.

We all also know that this means everything in the housing will be inflated by $15,000 over its true value as well if this passes.

+1, and this is coming from someone with a financial interest in a housing recovery and a buyer's boom.

Originally Posted by airics

i like the idea of 4% fixed backed by the gov't open to everyone (not just people late)

I can't say that I do. Of course I would love my mortgage to be 4%, but the 4% proposal goes against the free market. Subsidizing these mortgages directly will eliminate competition between lenders, and don't think for a second that banks won't abuse the subsidies to fatten their wallets on our dime. If the government were to use the market forces it is currently using (keep in mind that the Treasury is currently buying mortgage bonds in the 5.5% coupon stack, if they wanted 4% rates they could start buying 3.5 and 4.0 coupons and take much less of a loss albeit they would take a loss) to get to 4% I would not have as much of an issue with it, but between the bailout money plus the mortgage bond money I think that the Fed has thrown quite enough money at the housing situation. How about some infrastructure, something that will not only creat jobs and improve our economy but something that will actually benefit the nation as a whole on a very basic level.

Keep in mind that between FHA/VA, Fannie and Freddie in conservatorship, and the Treasury buying $4 billion a day in mortgage bonds that basically every mortgage originated today is government backed in one way or another.

[airics]

you lost me there (i am mortgage lingo illiterate).. i'm not saying that this is great... i am just irritated at the original idea that anyone behind on their payments was going to get their principle reduced and the guy next door who makes his payments wasn't.

i know i have asked this before but have you ever seen a arm go down? mine is 2 above libor.. so last i checked, if mine would change today, my rate would be around 3.75%

[Daddys///M3]

Originally Posted by airics

you lost me there (i am mortgage lingo illiterate).. i'm not saying that this is great... i am just irritated at the original idea that anyone behind on their payments was going to get their principle reduced and the guy next door who makes his payments wasn't.

i know i have asked this before but have you ever seen a arm go down? mine is 2 above libor.. so last i checked, if mine would change today, my rate would be around 3.75%

The 4% plan would not only apply to underwater borrowers but to buyers as well. Some have even speculated that this would only apply to borrowers. Regardless like anything else there is a way to do things and there is a way not to do things, and subsidizing and usurping the free market process is definitely not the way to do things.

ARM's do go down, but you need to check your loan package. There should be an ARM disclosure in there that explains exactly how it works with regards to how it can adjust, when it can adjust, how much it can adjust at each adjustment interval, and the max it can adjust over the life of the loan. If it can adjust downwards it will say in the ARM disclosure.

[RedRockAAAA]

The 4% mortgage, like the 15%($15,000) tax credit for a house purchase, is a Washington thought being bantered about. None of us know where it will end up.

The $7500's mentioned is real and in force.

If a first time home buyer purchases a home between April 8, 2008 and July 9, 2009 he/she/they will receive a $7500 LOAN, received via a tax credit, from the Feds at 0% interest to be paid back via their tax return at the rate of $500 per year for 15 years if and only if they have not owned any part of a home for the 3 years prior to the qualification dates.

As regards the 4% mortgage ... wouldn't it be grand. All mortgages across America at 4% fixed for 30 years guaranteed by the government. Every home owner would have $100 to $800 or more per month to help the economy. It would get rid of all bank properties.

Why do we keep saving the fat cats? The current crisis started with a screw up by fat cats in the mortgage and investment industries. So, fix the average family's mortgage and let the recovery begin. Of course other issues need to be addressed; infrastructure, wall street bonuses, etc.