St. Louis Real Estate-Market Watch January 17th, 2010

Real Estate-Market Watch by Art Wagner @ Keller Williams Realty Southwest Saint Louis , Sunset Hills, MO. January 17th, 2010
The Anatomy of St. Louis Real Estate

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The St. Louis Real Estate Market this week is showing signs of upward movement as the holidays are past us, the cold weather is gone, for now. Active listings are up almost 200 from two weeks ago, as sellers are coming back on the market after the holidays.

Homebuyer activity is still strong, as many have their eye on the April 30 deadline to have an accepted contract, as that will allow them to qualify for the First Time Homebuyer tax credit or the move up buyer tax credit. With an accepted contract by April 30th, they will then have until June 30th to close.

Also, finally, the IRS has just released the new form that first time homebuyers will have to fill out in order to apply for the tax credit. The one challenge with this form is that when you attach it to your 2009 Federal Tax filing, you must file in paper form, ie…mail it in. E-filing will not be allowed, as the IRS is not set up as yet to accept attachments to their E-File tax return documents. Bummer!

Below is more GREAT NEWSbrought to us by one of our compadres, Jason Palliser at Prospect Mortgage. This article appeared on Jason’s web site and on the real estate investor web site, REI Blackbook.

If you haven’t heard as of yet, HUD has removed the 90 day seasoning rule for FHA purchases of foreclosed homes, investor owned homes, etc…for one year, beginning February 1st, 2010.

HUD TAKES ACTION TO SPEED RESALE OF FORECLOSED PROPERTIES TO NEW OWNERS
Measure to help bring stability to home values and accelerate sale of vacant properties

WASHINGTON – In an effort to stabilize home values and improve conditions in communities where foreclosure activity is high, HUD Secretary Shaun Donovan today announced a temporary policy that will expand access to FHA mortgage insurance and allow for the quick resale of foreclosed properties. The announcement is part of the Obama administration commitment to addressing foreclosure. Just yesterday, Secretary Donovan announced $2 billion in Neighborhood Stabilization Program grants to local communities and nonprofit housing developers to combat the effects of vacant and abandoned homes.

“As a result of the tightened credit market, FHA-insured mortgage financing is often the only means of financing available to potential homebuyers,” said Donovan. “FHA has an unprecedented opportunity to fulfill its mission by helping many homebuyers find affordable housing while contributing to neighborhood stabilization.”

With certain exceptions, FHA currently prohibits insuring a mortgage on a home owned by the seller for less than 90 days. This temporary waiver will give FHA borrowers access to a broader array of recently foreclosed properties.

“This change in policy is temporary and will have very strict conditions and guidelines to assure that predatory practices are not allowed,” Donovan said.

In today’s market, FHA research finds that acquiring, rehabilitating and the reselling these properties to prospective homeowners often takes less than 90 days. Prohibiting the use of FHA mortgage insurance for a subsequent resale within 90 days of acquisition adversely impacts the willingness of sellers to allow contracts from potential FHA buyers because they must consider holding costs and the risk of vandalism associated with allowing a property to sit vacant over a 90-day period of time.

The policy change will permit buyers to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales. This will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods and communities.

“FHA borrowers, because of the restrictions we are now lifting, have often been shut out from buying affordable properties,” said FHA Commissioner David H. Stevens. “This action will enable our borrowers, especially first-time buyers, to take advantage of this opportunity.”
The waiver will take effect on February 1, 2010 and is effective for one year, unless otherwise extended or withdrawn by the FHA Commissioner. To protect FHA borrowers against predatory practices of “flipping” where properties are quickly resold at inflated prices to unsuspecting borrowers, this waiver is limited to those sales meeting the following general conditions:

All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.

In cases in which the sales price of the property is 20 percent or more above the seller’s acquisition cost, the waiver will only apply if the lender meets specific conditions.

The waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program.

Specific conditions and other details of this new temporary policy are in the text of the waiver, available on HUD’s website.

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This entry was posted on Monday, January 18th, 2010 at 9:19 pm and is filed under St. Louis Market Reports. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.