CitiBlog
|
Chief Blogger: Christopher Dente, Director of Public Relations | 212.685.7777 | cdente@citi-habitats.com
|
|
More Posts
|
 |
|
|
 |
February 2009
Exceptional Spaces
Posted by Christopher Dente | February 25, 2009
Exceptional Opportunities in the sales and rental markets...exclusively from Citi Habitats
Greenwich Village / SoHo
25 Minetta Lane, 5D
$950,000
TRIPLE MINT MINETTA LANE MASTERPIECE
Welcome to one of the most stunningly renovated One Bedrooms available in all of downtown Manhattan. This new exclusive will be ready to be seen by the public in a few days and cannot be missed. Turn-key unit waiting for the right buyer that appreciates quality, style and perfection.
Immediately as you enter this masterpiece its quite easy to be transfixed by the stunning foyer with original and restored art deco detail.
This gorgeous one bedroom features a sunken living room, fantastic prewar detail, wired sound system, rich and deep hardwood floors, great northern light with Minetta Lane views.
No expense was spared in the renovation of this stunning apartment. The new kitchen features beautiful lighting fixtures, custom tile wall and backsplash, CaesarStone counter tops throughout, Viking dishwasher and Viking range.
The quiet corner bedroom is also wired for sound and features custom closets smartly utilizing the space.
25 Minetta Lane is a wonderfully managed and maintained cooperative featuring a new roof deck that is perched above the heart of Greenwich Village.
Also in the building is a well appointed and renovated laundry facility and handy live-in superintendent.
Please call or email for a viewing--- for this truly is downtown's magnum opus.
Citi Habitats web ID 358956
Contact: Scott Elyanow
|
|
Mortgage Weekly Update
Credit to: Melissa Cohn
Posted by Christopher Dente | February 23, 2009
For the week of Feb 23, 2009 --- Vol. 7, Issue 8
Last Week in Review
"I WILL ACT NOW. I WILL ACT NOW. I WILL ACT NOW."--Og Mandino.
And acting now - more than once - is exactly what Congress and the President did last week, as two major economic plans were released that impact the mortgage and housing industries.
The first plan, the Economic Stimulus Plan for 2009, was finally approved by Congress and signed by President Obama. In addition, the President unveiled the initial details of his Homeowner Affordability and Stability Plan, which is designed to help stabilize the housing market and keep millions of borrowers in their homes. Many of the details of these plans are still being worked out, but read this week's Mortgage Market View article below for an overview of some benefits that may impact you.
In other news, the Stock market plunged last week on continued fears of a deepening recession, a failing banking system, weak corporate earnings and forecasts. The 113 year old Dow Jones Industrial Average closed the week down almost 7%, reaching a six-year low, which you can see in the chart below.
Not accounting for dividends, the Dow is at a level equal to what it was twelve years ago. Oftentimes Stock prices rebound once previous lows are tested...so let's hope that happens now, as the Stock market is due for a rally! The plunge in the Stock market did not lead to any significant improvement for Bonds or home loans rates last week, but the week ended with Bonds and home loan rates unchanged to slightly better from where they began.
Several reports could cause some action in the markets this week. First, we'll get a look at the housing market with Wednesday's Existing Home Sales Report and Thursday's New Home Sales Report.
Thursday also brings the Durable Goods Report (i.e. items that are non-disposable, like cars, furniture, appliances, games, cameras, business equipment, etc.), which will give us a read on consumer and business consumption and buying behavior. And we can't ignore Friday's Gross Domestic Product (GDP) Report, as GDP is the broadest measure of economic activity. Given the state of our economy, it might not be too much of a surprise if these reports are negative.
Remember: Weak economic news normally helps Bonds and home loan rates improve, as money flows out of Stocks and into Bonds. When Bond prices move higher, home loan rates move lower. As you can see in the chart below, Bonds and home loan rates continue to face some tough technical resistance overhead, hindering their path to improvement. We will be watching closely to see what happens this week.
Chart: Fannie Mae 4.5% Mortgage Bond (Friday Feb 20, 2009)
The Mortgage Market View...
Here is an overview of some benefits of the Economic Stimulus Plan for 2009 and the Homeowner Affordability and Stability Plan that may impact you.
Stimulus Plan - Tax Credit for Homebuyers
The $787 Billion stimulus bill is made up of tax cuts and spending programs aimed at reviving the US economy. Although the package was scaled down from nearly $1 Trillion, it still stands as the largest anti-recession effort since World War II. One of the major benefits of the plan is a tax credit for new homebuyers. According to the plan, first-time homebuyers who purchase homes from the start of the year until the end of November 2009 may be eligible for the lower of an $8,000 or 10% of the value of the home tax credit.
It's important to remember that the $8,000 tax credit is just that... a tax credit. The benefit of a tax credit is that it's a dollar-for-dollar tax reduction, rather than a reduction in a tax liability that would only save you $1,000 to $1,500 when all was said and done. So, if you were to owe $8,000 in income taxes and would qualify for the $8,000 tax credit, you would owe nothing.
Better still, the tax credit is refundable, which means you can receive a check for the credit even if you have little income tax liability. For example, if you're liable for $4,000 in income tax, you can offset that $4,000 with half of the tax credit... and still receive a check for the remaining $4,000!
The tax credit starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000.
The tax credit is applicable to any home that will be used as a principle residence. Based on that guideline, qualifying "homes" include single-family detached homes, as well as attached homes such as townhouses and condominiums. In addition, manufactured or homes and houseboats used for principle residence also qualify. Buyers will have to repay the credit if they sell their homes within three years.
While details are sketchy - we will expect to get some clarity soon as to an additional tier of conforming loan amounts which had been first established in 2008. This tier of home loans are those greater than $417,000, and with a maximum that depends on the area, but is not greater than $729,750. These loans would be eligible for rates that are slightly higher than conforming loan rates, but less expensive than the standard "jumbo" loan rates.
Homeowner Affordability and Stability Plan
President Obama unveiled his plan to help stabilize the housing market and keep millions of borrowers in their homes. The Homeowner Affordability and Stability Plan includes two initiatives to help struggling homeowners. One is a refinancing program for homeowners with less than 20% equity in their homes, or who owe more than their home is worth. The second program attempts to lower monthly payments for homeowners at risk of losing their home. Many of the plan's details are still being worked out and will not be announced until March 4. Here is an overview of the plan's main components.
Refinancing Initiative
Under current rules, those families who own less than 20% equity in their homes have a difficult time refinancing and taking advantage of the historically low interest rates. This initiative is open to homeowners who have conforming loans which are guaranteed by Fannie Mae and Freddie Mac, and who owe up to 5% more than their home is worth.
According to the plan, "credit-worthy" or "responsible" homeowners can refinance their mortgage into a 30- or 15-year, fixed-rate loan based on current market rates. The refinanced loan, however, cannot include prepayment penalties or balloon payments. For many families, this low-cost refinancing may help reduce their mortgage payments by up to thousands of dollars per year.
As with the rest of the plan, details about this initiative will be released at a future date--including what, if any, credit score requirements will be included.
Stability Initiative
This initiative aims at providing help to individual families as well as entire neighborhoods by helping reduce foreclosures and stabilize home prices. It is intended to help homeowners who are struggling to afford their mortgage payments, but cannot sell their homes because prices have fallen significantly.
The goal of this initiative is simple: "reduce the amount homeowners owe per month to sustainable levels." To accomplish this, lenders are encouraged to lower homeowners' payments to 31% of their income by lowering their interest rate to as low as 2% or by extending the terms of the loan. In addition, lenders can also lower the principal owed by the borrower, with Treasury sharing in the costs.
Homeowners who are current on their mortgages but are struggling can still apply for this program. As such, this is one of the few programs designed to help homeowners who may face delinquency soon, but are current at the moment.
This initiative also includes a number of additional elements and incentives, including an extra incentive for borrowers to keep paying on time. The initiative will provide a monthly balance reduction payment that goes straight towards reducing the principal balance of the mortgage loan. As long as a borrower stays current on his or her loan, he or she can get up to $1,000 each year for five years.
Since the focus of this initiative is on helping families and neighborhoods, investment properties do not qualify.
The Week's Economic Indicator Calendar
Economic Calendar for the Week of February 23 – February 27
|
|
EliteRentals - January / February 2009 Issue
Posted by Christopher Dente | February 23, 2009
EliteRentals is published by Citi Habitats, the premier residential brokerage firm in Manhattan.
EliteRentals - January / February 2009 Issue
Features:
2009 Guide to Renting In Manhattan
Rental Market Analysis - January 2009
Cover Story: Chelsea Chic - $28,500 / month
Exquisite Property: Mansion in the Sky - $99,000 / month
Click on the image to view entire issue
|
|
Housing fix will help many, but not all
Posted by Christopher Dente | February 19, 2009
Source: CNN Money
Housing fix will help many, but not all
Housing counselors and lenders both say Obama program is comprehensive approach that attacks root of economic crisis. But it won't help everyone.
By Tami Luhby, CNNMoney.com senior writer
Last Updated: February 18, 2009: 7:16 PM ET
NEW YORK (CNNMoney.com) -- The $75 billion foreclosure prevention program announced Wednesday by President Obama will go a long way to helping millions of distressed borrowers and to stopping the housing market's downward spiral, experts said.
The multi-pronged plan, which calls for modifying loans for borrowers both at risk or already in default and for allowing those with little or no home equity to refinance into more affordable loans through interest rate reductions, has made some strange bedfellows.
"It cuts the Gordian knot that has eluded everybody," said Scott Talbott, senior vice president of government affairs at the Financial Services Roundtable, a lobbying group. He called it a "solid approach" to preventing foreclosures.
"It's a huge huge huge step in the right direction," said Kathleen Day, spokeswoman for the Center for Responsible Lending, a consumer advocacy organization. "It gets at people in different stages of distress and really tries to get everyone moving in the same direction."
This is a very different reaction from the ones that greeted most of the Bush administration's foreclosure prevention efforts, which consisted mainly of an assortment of voluntary loan modifications programs with no government backing.
Critics often said the previous efforts did not go far enough to addressing foreclosures, and they likely were right. Fewer than half of the loans modified in January 2008 were stillcurrent in November, mainly because the majority of the adjustments did not reduce the monthly payment burden, according to a report by Alan White, a law professor at Valparaiso University.
Unlike the previous measures, Obama's plan uses government funds to provide incentives to borrowers, loan servicers and mortgage investors to modify loans to affordable monthly payments. And it offers help to at-risk borrowers before they stop paying. The administration says it will help up to nine million people avoid foreclosure.
The plan didn't satisfy everyone. Congressional Republicans took the opportunity to blast the president for using taxpayer dollars to bail out irresponsible lenders and borrowers. Others said the program could have gone further.
For example, the loan modification program would be more effective if it were mandatory and included principal reduction. Lowering loan balances is the best way to avoid foreclosures at a time when severe declines in home values have left many with loans worth far more than their houses, some experts said.
"The plan may not be aggressive enough to effectively deal with the scale and magnitude of this epidemic," said John Taylor, head of the National Community Reinvestment Coalition. "The plan's voluntary nature may blunt its impact."
Incentives galore
Though voluntary, the program contains incentives for servicers to work with borrowers.
The plan calls for servicers to reduce interest rates so that a person's monthly obligation is no more than 38% of his or her income. Then the government would kick in money to bring payments down to 31% of the homeowner's income. It also gives servicers money for modifying loans, and additional funds if borrowers stay current or are helped before they fall behind. Finally, it is developing a $10 billion insurance fund that will pay mortgage holders based on declines in a home price index.
Though the program is voluntary, these measures will entice servicers to more aggressively modify loans, experts said. Another reason servicers will be more willing to modify: The Obama administration is pushing for a change in the bankruptcy laws to allow judges to adjust loan terms.
"There are a lot of incentives for servicers and lenders to step up to the plate," Day said.
Subsidizing the interest rates makes it much more likely servicers will participate, said John Vogel, adjunct professor of real estate at the Tuck School of Business at Dartmouth College. It minimizes the losses the banks have to take, while making it more likely the borrower can afford the payment.
"It makes it a much safer loan," Vogel said.
Helping people before they default
A main criticism of previous modification programs is that borrowers only qualified if they had stopped making payments. This frustrated those who didn't want to wreck their credit histories by going into default and prompted others to stop making payments just to qualify for relief.
Under Obama's plan, both those at-risk and in default qualify for loan modifications. Also, many borrowers who are current with their payments but have little or no equity in their homes can now qualify to refinance to take advantage of lower interest rates.
"Not letting people fall into delinquency before they get help is an important factor they've added to the program," said Ken Wade, chief executive of NeighborWorks America, a national community revitalization group chartered by Congress whose board is made up of bank regulators. "It attempts to get ahead of the problem."
Obama has also managed to get many players inthe financial industry to accept allowing bankruptcy judges to modify loan terms, a measure they have always fought. What makes it more palatable is that his program gives borrowers a lot of options to get back on their feet before they turn to bankruptcy.
"The key is to ensure that cramdown is truly a last resort," Talbott said.
If servicers truly embrace modifying loans, it will keep more people out of bankruptcy, experts said.
"If you allow this provision, fewer people will have to file," Day said.
|
|
Final score: $8,000 for homebuyers
Posted by Christopher Dente | February 18, 2009
First-time purchasers get a tax credit windfall if they buy before December.
By Les Christie, CNNMoney.com staff writer
Last Updated: February 17, 2009: 12:13 PM ET
NEW YORK (CNNMoney.com) -- There's a nice windfall for some homebuyers in the economic stimulus bill awaiting President Obama's signature on Tuesday. First-time buyers can claim a credit worth $8,000 - or 10% of the home's value, whichever is less - on their 2008 or 2009 taxes.
A big plus is that the credit is refundable, meaning tax filers see a refund of the full $8,000 even if their total tax bill - the amount of witholding they paid during the year plus anything extra they had to pony up when they filed their returns - was less than that amount. But there has been a lot of confusion over this provision. Adam Billings of Knoxville, Tenn. wrote to CNNMoney.com asking:
"I will qualify as a first-time home buyer, and I am currently set to get a small tax refund for 2008. Does that mean if I purchased now that I would get an extra $8,000 added on top of my current refund?"
The short answer? Yes, Billings would get back the $8,000 plus what he'd overpaid. The long answer? It depends. Here are three scenarios:
Scenario 1: Your final tax liability is normally $6,000. You've had taxes withheld from every paycheck and at the end of the year you've paid Uncle Sam $6,000. Since you've already paid him all you owe, you get the entire $8,000 tax credit as a refund check.
Scenario 2: Your final tax liability is $6,000, but you've overpaid by $1,000 through your payroll witholding. Normally you would get a $1,000 refund check. In this scenario, you get $9,000, the $8,000 credit plus the $1,000 you overpaid.
Scenario 3: Your final tax liability is $6,000, but you've underpaid through your payroll witholding by $1,000. Normally, you would have to write the IRS a $1,000 check. This time, the first $1,000 of the tax credit pays your bill, and you get the remaining $7,000 as a refund.
To qualify for the credit, the purchase must be made between Jan. 1, 2009 and Nov. 30, 2009. Buyers may not have owned a home for the past three years to qualify as "first time" buyer. They must also live in the house for at least three years, or they will be obligated to pay back the credit.
Additionally, there are income restrictions: To qualify, buyers must make less than $75,000 for singles or $150,000 for couples. (Higher-income buyers may receive a partial credit.)
Applying for the credit will be easy - or at least as easy as doing your income taxes. Just claim it on your return. No other forms or papers have to be filed. Taxpayers who have already completed their returns can file amended returns for 2008 to claim the credit.
Lukewarm reception
The housing industry is somewhat pleased with the result because the stimulus plan improves on the current $7,500 tax credit, which was passed in July and was more of a low-interest loan than an actual credit. But the industry was also disappointed that Congress did not go even further and adopt the Senate's proposal of a $15,000 non-refundable credit for all homebuyers.
"[The Senate version] would have done a lot more to turn around the housing market," said Bernard Markstein, an economist and director of forecasting for the National Association of Homebuilders (NAHB). "We have a lot of reports of people who would be coming off the fence because of it."
Even so, the $8,000 credit will bring an additional 300,000 new homebuyers into the market, according to estimates by Lawrence Yun, chief economist for the National Association of Realtors.
The credit could also create a domino effect, he said, because each first-time homebuyer sale will lead to two more trade-up transactions down the line. "I think there are many homeowners who would be trading-up but they have had no buyers for their own homes," Yun said.
Who won't benefit, according to Mark Goldman, a real estate lecturer at San Diego State University, are those first-time homebuyers struggling to come up with down payments. The credit does not help get them over that hurdle - they still have to close the sale before claiming the bonus.
One state, Missouri, is trying to get around that problem by creating a short-term loan on the tax credit of up to $6,750. The state would loan borrowers the money so they could use it at closing as part of the downpayment. Then, when the buyers receive their tax credit from the IRS, they pay back the state. Other states may follow with similar programs, according to NAHB's Dietz.
Many may look at the tax credit as a discount on the home price, according to Yun. A $100,000 purchase effectively becomes a $92,000 one. That can reassure buyers apprehensive about purchasing and then watching prices continue falling, he added.
And it provides a nice nest egg for the often-difficult early years of homeownership, when unexpected repairs and expenses often crop up. Recipients could also use the money to buy new stuff for their home - a lawnmower, a rug, a sofa - and, in that way, help stimulate the economy.
CORRECTED: An earlier version of this story incorrectly stated how much taxpayers who were owed a refund would receive under the credit.
First Published: February 16, 2009: 5:38 PM ET
|
|
|
|
|
|
|
More Posts
|
|
|
|
Citi Habitats Comment Policy: Citi Habitats encourages you to add a comment to this discussion. You may not post any
unlawful, threatening, libelous, defamatory, obscene, pornographic or other material that would violate
the law. Please note that Citi Habitats makes reasonable efforts to review all comments prior to posting and Citi Habitats
may edit comments for clarity or to keep out questionable or off-topic material. All comments should be
relevant to the post and remain respectful of other authors and commenters. By submitting your comment,
you hereby give Citi Habitats the right, but not the obligation, to post, air, edit, exhibit, telecast, cablecast,
webcast, re-use, publish, reproduce, use, license, print, distribute or otherwise use your comment(s)
and accompanying personal identifying information via all forms of media now known or hereafter devised,
worldwide, in perpetuity.
Citi Habitats Privacy Policy.
|
|
