4.875 interest rates -- now available 12-12-08

The Treasury Department is strongly considering a plan to intervene directly in the mortgage industry to
dramatically force down rates and stimulate the moribund housing market, according to sources familiar with
the proposal.
Under the initiative, the Treasury would offer to buy securities that finance newly issued loans for home
purchases, according to the sources. But to participate in the government's program, mortgage lenders would
have to set exceptionally low interest rates, for instance, no more than 4.5 percent for traditional, 30-year
fixed-rate loans.
These securities would be purchased primarily from Fannie Mae and Freddie Mac, the financing giants that buy
most mortgages from U.S. lenders, according to sources who spoke on condition of anonymity because the
plan has not been finalized.
The cost of the plan and source of funding remain unclear. One possibility is for the Treasury to raise money
by issuing bonds to the public at 3 percent interest. This could allow the government to turn a profit because
it would be buying securities that pay 4.5 percent.
At a meeting attended by the Treasury's Interim Assistant Secretary for Financial Stability Neel Kashkari and
the National Association of Realtors in mid-November, senior Treasury officials said they were optimistic that
subsidizing lower mortgage rates with taxpayer dollars would help revive the housing market, sources said.
Treasury officials told the Realtors that the plan could be a more effective way to help homeowners than
focusing efforts solely on borrowers who are struggling to meet their monthly payments, the sources said.
Democratic lawmakers have been advocating a proposal to modify the mortgages of distressed homeowners.
A source said Treasury officials suggested at the meeting that the Realtors start a grass-roots campaign to
press the mortgage rate plan with lawmakers.
Treasury officials described the situation as fluid and said the plan was still being finalized, according to people
in contact with the department. The officials expressed concerns yesterday that premature disclosure of the
plan could prompt Americans to put off buying homes and hold out for a better rate, sources added.
Treasury spokeswoman Brookly McLaughlin said she would not comment on the matter.
Key to solving financial crisis
Treasury Secretary Henry M. Paulson Jr. has said that a recovery in the housing market is key to solving the
financial crisis. Such a rebound would restore confidence in the banking system and support the value of
troubled assets backed by mortgages.
Though he has said a mortgage modification plan proposed by Federal Deposit Insurance Corp. Chairman
Sheila C. Bair could help the housing market, Paulson has expressed concerns about whether it would reward
borrowers who bought houses they couldn't afford. Bair's plan would use tens of billions in federal funds to
modify adjustable-rate mortgages for several million financially troubled homeowners.
The initiative under review at the Treasury would be an alternative. Borrowers would have to meet standards
set by Fannie Mae, Freddie Mac or the Federal Housing Administrations that include documenting their income,
sources said. Fannie and Freddie were put under government control in September. The Treasury plan would
not apply to refinances.
MSNBC.com

denver market ready for upturn

Denver overall outlook is sunnier than for most western cities because neither inventory nor prices spiraled out of control during the boom. Dinged by a telecom bust earlier in the decade that cost the city 5 percent of its jobs, the local economy wasn’t primed for irrational exuberance. Now with six months’ worth of homes in inventory—the level most experts judge to be roughly in balance—the city offers considerable upside.
In particular, upscale buyers are flocking to Cherry Creek, the towny neighborhood that’s home to Neiman Marcus and the Cherry Creek Arts Festival, one of the country’s top urban arts fairs. Here, prices leaped 16 percent in the past year, according to Integrated Asset Services, an firm specializing in mortgage investments. The area’s popularity illustrates a common theme in U.S. housing markets: established, close-in neighborhoods are often holding up better than suburbs, because they didn’t endure overbuilding and because higher-income owners were less likely to need subprime or adjustable-rate mortagages.

Cherry Creek’s success also highlights the strength of the envy factor. In a recent Coldwell Banker survey of luxury homeowners, 17 percent said they’ve considered moving to get into a certain address or zip code—a reminder that the lure of prestige or good schools moves homes even in a shaky economy. Cherry Creek’s 80206 zip code may be Denver's ritziest—as seen in the new development North Creek, which features a mix of million-dollar tower condos and brownstones along with a private garden courtyard, à la New York’s Gramercy Park.

Call Brian for more info

tax credit chafa changes

The $7,500 tax credit that is available for First Time Buyers. Here is an excellent source of information about the tax credit http://www.federalhousingtaxcredit.com/faq.php Please take a look at Q&A #13. It clearly shows that if your buyer is using (or has used) a Mortgage Revenue Bond (MRB) program like CHFA or the Metro Mayors Bond program, They are NOT eligible for the $7,500 Tax Credit.
However, if your first time buyer is using a regular FHA, Conventional, or VA loan, they are eligible for the $7.500, even if they are using a community 2nd like CHAC or Aurora HOAP. This $7,500 is a NO INTEREST loan and must be paid back over 15 years but it is a great incentive to get them into a home. Remember that interest rates are still in the low 6% range and there IS money out there to lend.
I look forward to any questions you may have and I would like to wish you a Very Happy Thanksgiving

$7500 Tax Credit for You!!!!!!!!!!!!!

As we approach tax time, the following information on the $7,500 first-time homebuyer tax credit might be something you want to consider and send to some of your family members and/or friends.

Good news for first-time homebuyers...This year the President signed a new major housing bill (H.R.3221) into law. As part of this housing bill, Congress has created a new, temporary tax credit of up to $7,500 to provide an incentive to purchase a home for first-time homebuyers. To take advantage of the credit, buyers must purchase a home between April 9, 2008 and June 30, 2009. The tax credit, which is calculated as 10% of the purchase price of your new home and capped at $7,500, can be claimed on your income tax return when you file. For purposes of this tax credit, a first-time homebuyer is someone who has not owned a principal residence in the past three years. It's that easy.

Sound good so far? Here's the nuts and bolts... The tax credit is actually a 0% interest loan, payable in equal payments over 15 years. In other words, if you are eligible for the entire $7,500, then you would pay $500 back each year beginning two years after the credit is claimed. If you sell your home before the 15 years are up, you will owe the balance from the capital gains on the home sale. If there are no gains on the sale, the remaining balance will be forgiven.

The full $7,500 is available to single filers who earn up to $75,000 per year and married filing joint filers who earn up to $150,000 per year. Partial credits are available up to $95,000 for single and $170,000 for married filers. Also, if your purchase occurs in 2009, you can choose to use your income in either 2008 or 2009 to take advantage of whichever year will yield a larger credit. Additionally, if you have little or no federal income tax liability, the government can still send you a check for a portion or even all of the amount of the refundable tax credit. Be sure to consult your CPA on all tax matters.

Feel free to call if you have any questions.

Brian Bacon

Bacon Ent., Inc.

bacondenver@gmail.com

303-301-7133 direct

303-905-5002 cell

303-736-4093 fax

http://www.bacondenver.com

www.housefindercolorado.com