Obama Signs Homebuyer Tax Credit Extension

RISMEDIA, -President Barack Obama has approved the first-time homebuyer tax credit extension which will extend the tax credit until April 30, 2010.

The extension is part of a $24 billion economic stimulus bill that will extend the $8,000 tax credit for homebuyers who are purchasing their first home from the current November 30 deadline and expands the program to offer a credit of $6,500 to homeowners who have lived in their current home for at least five years and are seeking to relocate.

The following details apply to the homebuyer tax credit expansion:

Who is Eligible
-First-time homebuyers, who are defined by the law as buyers who have not owned a principal residence during the three-year period prior to the purchase, may be eligible for up to an $8,000 tax credit.
-Existing homeowners who have been residing in their principal residence for five consecutive years out of the last eight and are purchasing a home to be their principal residence ("repeat buyer"), may be eligible for up to a $6,500 tax credit.
-All U.S. citizens who file taxes are eligible to participate in the program.

Income Limits
Homebuyers who file as single or head-of-household taxpayers can claim the full credit ($8,000 for first-time buyers and $6,500 for repeat buyers) if their modified adjusted gross income (MAGI) is less than $125,000.
-For married couples filing a joint return, the combined income limit is $225,000.
-Single or head-of-household taxpayers who earn between $125,000 and $145,000, and married couples who earn between $225,000 and $245,000 are eligible to receive a partial credit.
-The credit is not available for single taxpayers whose MAGI is greater than $145,000 and married couples with a MAGI that exceeds $245,000.

Effective Dates
-The eligibility period for the tax credit is for homes purchased after Nov. 6, 2009, and before May 1, 2010. However, home purchases subject to a binding sales contract signed by April 30, 2010, will qualify for the tax credit provided closing occurs prior to July 1, 2010.

Types of Homes that Qualify
-All homes with a purchase price of less than $800,000 qualify, including newly-constructed or resale, and single-family detached, townhomes or condominiums, provided that the home will be used as their principal residence. Vacation home and rental property purchases do NOT qualify.

Tax Credit is Refundable
-A refundable credit means that if the amount of income taxes you owe is less than the credit amount you qualify for, the government will send you a check for the difference.

-For example:
-A first-time buyer who qualifies for the full $8,000 credit who owes $5,000 in federal income taxes would pay nothing to the IRS and receive a $3,000 payment from the government. If you are due to receive a $1,000 refund, you would receive $9,000 ($1,000 plus the $8,000 first-time homebuyer tax credit).
-A repeat buyer who owes $5,000 would pay nothing to the IRS and receive $1,500 back from the government. If you are due to get a $1,000 refund, you would get $7,500 ($1,000 plus the $6,500 repeat buyer tax credit).
-All qualified homebuyers can take the tax credit on their 2009 or 2010 income tax return.

Payback Provisions
The tax credit is a true credit. It does not have to be repaid unless the home owner sells or stops using the home as their principal residence within three years after the purchase.

The www.federalhousingtaxcredit.com site is being updated. Check the site next week for more detailed information on the new tax credit.

Read more: http://rismedia.com/2009-11-08/obama-signs-homebuyer-tax-credit-extension/#ixzz0WMMfDdTl

To find out more about buying or selling a house - visit: http://www.robertjrussell.com

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$8000 First Time Homebuyer's Tax Credit

Time is running out! Do not let an $8000 tax credit pass you by.

Imagine hearing this while on the next walk through of your future home, "Not only did the previous owners update the kitchen, replace the roof and install a brand new sprinkler system, but the United States government is going to sweeten the deal with eight thousand dollars."

For first-time home buyers willing to take the plunge into ownership between now and close to the end of 2009, a tax credit (that means cash) can be yours if you meet the qualifications.

Do not confuse this credit with the former program which was a loan that would have to be repaid over time. This is money in your pocket to furnish your new home with new carpet, perhaps an energy efficient central air and heating system, or for some, a second honeymoon to the Grand Caymans. They money is yours to do with as you please!

Many people have questions about the tax credit. Here's a few of the most common ones with answers:

1. Can I qualify as a first-time buyer if I have previously owned a home?

Yes, as long as you have not owned a home for three years prior to making your new purchase. If you sold your last home on May 1, 2006, you will qualify for the credit with a new home purchase on or any day after May 1, 2009. You must keep the home as your main residence for a minimum of 36 months after purchasing.

2. If I owe $2500 in taxes and I qualify for the $8000, what happens to the $5500 difference?

It comes to you in a refund check from the IRS. Any amount above what you may owe (if you owe anything at all) will be returned to you. Also, if you are scheduled to receive a return of $1300, you would receive a check or electronic funds transfer for $9300.

3. Are there any income limitations?

Yes. Individuals filing a gross income under $75,000 qualify for the full $8000 credit. Married couples earning less than a combined $150,000 qualify for 100% of the credit as well. Individuals earning between $75,000 and $95,000 will see a tiered credit. Married couples earning between $150,000 and $170,000 will also see a tiered credit in their return.

There is some talk in regards to an extension or increase to the amount of credit allotted as well as the time frame in which a buyer may take advantage of the program. There is even some thought that it will cover all home purchases, not just those made by first-time buyers. This is not set or guaranteed. The $8000 outlined in this article is, however, and is waiting to be claimed on your 2009 tax return.

To find out about buying a home - visit http://www.robertjrussell.com

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Another Reason NOT to use the Builders Mortgage Company!

Beazer agrees to pay $50 million

Homebuilder admits mortgage firm bilked borrowers

By Matt Carter, Monday, July 6, 2009.

Inman News

Federal prosecutors say they won't pursue criminal charges against Beazer Homes USA Inc. as long as the company remains in compliance with an agreement to pay up to $50 million in restitution to homebuyers who were allegedly victimized by the builder's mortgage company.

The case serves as a dramatic illustration of the Department of Housing and Urban Development's complaints about seller-funded down-payment assistance programs, and homebuilders' affiliated mortgage and title insurance companies.

Beazer and its subsidiary, Beazer Mortgage Corp., admitted to engaging in several fraudulent mortgage origination practices, prosecutors said, including keeping discount points that should have been used to provide some homebuyers with a reduced interest rate.

Other homebuyers were told they were receiving a "gift" from a charity to cover their down payment when, in fact, the purchase price of the home they purchased was increased to offset the supposed "gift."

Beazer also accepted responsibility for fraudulently circumventing HUD's "Neighborhood Watch" and "Credit Watch" programs, and of instituting a strategy of "willful blindness" with regard to some stated-income loans, prosecutors said.

Prosecutors on Wednesday filed a criminal information detailing mortgage and accounting fraud charges against Beazer, along with a deferred prosecution agreement in the U.S. District Court for the Western District of North Carolina.

Prosecutors said they were willing to settle the case because of efforts by Beazer's audit committee to investigate and report to them fraudulent mortgage and accounting practices, and because Beazer Mortgage was shut down in February 2008 and no longer poses a risk to consumers.

Beazer has also fired employees identified as being responsible for the misconduct and has agreed to continue cooperating in an ongoing investigation, prosecutors said.

Additional criminal penalties "would jeopardize the solvency of Beazer and put at risk the employment of approximately 15,000 employees and full-time contractors not involved in the criminal wrongdoing," the Justice Department said in announcing the agreement.

Beazer said the settlement allows the company "to close an unfortunate chapter in its history" and to focus on "executing the company's financial and operating business plan" for the benefit of shareholders, employees and customers.

The deferred prosecution agreement requires Beazer to immediately pay $10 million toward restitution, including $2.5 million already paid to the North Carolina Commissioner of Banks in May.

Two Beazer executives -- Ian J. McCarthy, president and chief executive officer; and Michael Furlow, executive vice president and chief operating officer -- are personally paying into the restitution fund amounts equal to the after-tax proceeds of their 2008 bonuses, the company said.

The agreement gives the company immunity from prosecution for five years, as long as it's making up to $50 million in payments into a restitution fund under a formula based on its pre-tax earnings. The agreement can be extended until the obligation is met.

Analysts who follow the company say it may declare bankruptcy and stop paying into the fund, and that banks and other secured creditors would be paid before homeowners in a liquidation of the company's assets, the Charlotte Observer reported

Even if Beazer remains in business, the restitution fund may not be big enough to repay victims. Although the agreement requires Beazer to pay 4 percent of its adjusted earnings into the fund each year, the company reported a $114.9 million second-quarter loss and a $952 million annual loss in 2008, the Observer reported.

The U.S. Attorney's Office began investigating Beazer in 2007, after a series of stories in the Observer documented cases where the company appeared to have violated HUD regulations governing down-payment assistance programs.

HUD, which claimed seller-funded down-payment assistance can artificially inflate home prices and more than double the odds that a loan will end up in default, tried to end the practice but was thwarted for a time by lawsuits by nonprofits that served as conduits for the programs.

Congress passed legislation that became effective Oct. 1 prohibiting the Federal Housing Administration from accepting seller-funded down-payment assistance. The National Association of Realtors, which supported HUD's attempts to shut down seller-funded down-payment assistance programs, has endorsed legislation that's intended to restore the programs while limiting abuses (see story).

Rep. Al Green, D-Texas, on Jan. 16 reintroduced a bill, HR 600, that would resurrect seller-funded down-payment assistance programs for FHA-backed loans.

HUD has also faced opposition in its attempts to tighten the rules for applying the Real Estate Settlement Procedures Act, or RESPA, to homebuilders' affiliated mortgage and title insurance companies.

HUD had planned to implement a new "required use" provision on Jan. 16, which would have barred homebuilders from offering consumers incentives that could be claimed only if they used builders' affiliated mortgage and title insurance companies.

Homebuilders often make up for incentives they offer for using their affiliated businesses by charging a higher interest rate, increasing a home's price, or inflating closing costs, HUD said.

The National Association of Home Builders sued HUD on Dec. 22, which claimed the rule change was arbitrary. Affiliated businesses formed by settlement services providers like title insurers would still be allowed to offer discounts and settlement services packages, NAHB said.

HUD first pushed back implementation of the new required use provision, then withdrew it altogether. The provisions was drafted by the Bush administration in a way that was "confusing and flawed and neither protected consumers nor provided needed guidance to industry participants," incoming Secretary of Housing Shaun Donovan told Realtors in May.

The Obama administration remains committed to the consumer protection intentions of the "required use" provision, and plans to issue revised language for public comment, Donovan said (see story).

In 2007, Beazer was among 11 homebuilders and one lender that agreed to pay nearly $5 million to settle allegations that they violated RESPA by creating subsidiary companies to "reinsure" homebuyers' title insurance policies.

Beazer maintained that its captive title reinsurance subsidiary, Security Title, was not subject to RESPA because it did not provide settlement services, but paid $261,000 to settle the charges (see story).

http://www.robertjrussell.com - For Information on New Construction, Builders, Developers & More.

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