For 18 Years, Gilbert AZ has said so long to the hot weather with its End Of Summer Fest. But this year the community swan to hot weather was a casualty of budget reductions. The seven-member Citizens Budget Committee, Community Services recommended it be eliminated.

Last year’s So Long to Summer Festival drew about 6,000 people who paid a $4 admission to listen to a live band, play carnival games, ride a kiddies train and participate in other activities in a festive atmosphere.

This comes on the heals of the controversy surrounding the Gilbert days parade. The event was all but cancelled until a few big name private sponsors kicked in money to save the event.

But Community Services Director Jim Norman said his department must begin to “reinvent” how festivities are organized in the face of reduced funding and staff.

“We’ll try not to be too dramatic with some of the events we’ve been involved in for the first year,” he said, noting the change would occur gradually.

Town Council at a special meeting May 1 directed Norman and his staff to work toward a 100 percent cost recovery for festivities over the next three to four years.

Council also eliminated $38,500 for special events in the coming fiscal year.

Norman said funds for Gilbert Days and Fourth of July, both organized by the Gilbert Promotional Corp., came out of this allocation.

But he noted that for the last two years, the Town Council has approved additional funding for both events.

“I would imagine the Council will do that again in the future but funding will then have to come from contingency instead of the Community Services budget,” he said.

The special events unit had three staffers coordinating events until one member was transferred recently to coordinate the sports coalition groups.

Although the transferred staff member did “double duty” for a while, Norman said he was able to test whether a two-member team could offer the same support as before.

“The two people had to work hard, but still we were able to do it,” he said.

With So Long to Summer Fest eliminated, it would be one less activity to work on for two staff members next year.

Gail Disch, a member of the Citizens Budget Committee, said Constitution Week also took place in September during the same time frame as the summer fest. A private group funds and organizes Constitution Week.

Although the summer fest is not the most popular town-organized festival – the Halloween carnival drew 8,000 last year – “it was a very popular event,” Disch said.

“Perhaps it was an event that a private group or promoter is interested in taking over and doing,” she added.

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What Is HAFA?

HAFA program is part of the federal Home Affordable Modification Program (HAMP). HAFA guidelines will only apply to short sale or deed in lieu of foreclosure requests made by borrowers who have applied for a HAMP loan modification. That means borrowers must go through all the time, hassle and endless forms under the HAMP modification program before even being eligible for a HAFA streamlined short sale approval. This requirement will likely substantially reduce the number of HAFA-required short sales. HAFA also requires participating lenders to forgive a borrower’s loan deficiency if the lender accepts a short sale. This is a significant deviation from many lenders’ policies. There is even some debate about which lenders actually fall within the mandate of HAFA. For all of these reasons, it is far too early to speculate regarding the impact of HAFA on the current backlog of short-sale requests. It is very unlikely, however, that HAFA is going to quickly streamline the short sale process.

What are the benefits of the HAFA program?

HAFA does create the opportunity for standardization of short sale and deed in lieu of foreclosure forms. Given the wide range of agreements currently in use, standardization will help borrowers to better understand the terms of any negotiation. HAFA also requires lenders to standardize their criteria for the approval of a short sale or deed in lieu. Again, that kind of practice will enable borrowers to better anticipate the likelihood that a particular offer will be accepted and what the acceptance means.
Short sales seem to be picking up right now. But, in the end, will the current REO system be a better way to alleviate these troubled loans?

Short sales and REO sales are complementary processes. Both alternatives are necessary to systematically deal with property subject to defaulted loans. All available statistics indicate that when a mortgage loan is in default, the mortgaged property begins to fall in value. It’s easy to understand why. Even the most honorable borrower faced with a loan in default is unlikely to continue necessary maintenance much less improvement. Short sales allow these properties to be sold much more quickly than would occur if a full foreclosure and sale after redemption was required. As such, less reduction in property value results from the short sale alternative.

Not every parcel, however, is going to qualify for short sale treatment. In these cases, lenders will be forced to institute a foreclosure. Accordingly, an effective REO disposition process must be maintained by mortgage lenders. Whether short sales or foreclosure and REO resale becomes the norm for troubled properties remains to be seen. In any event, everyone benefits from a timely process which retains as much value as possible in our homes.

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It has been a bumpy few years for home owners. Most no longer are asking how much equity they will have in there house when they retire, instead they are asking how to get out from the current debt there home has laid upon them. Even still real estate is at some of the lowest prices in history. Is it time again for the average american to start thinking about their home as a retirement tool?

Three years into the housing bust, steep discounts are emerging in the market for high-end homes, which had been the real-estate industry’s last redoubt. Despite the budding economic recovery, demand for pricey properties is falling as potential buyers struggle to come up with money for big down paymentsand find it difficult to qualify for large mortgages. With buyers dropping out and homes languishing on the market, sellers are beginning to capitulate, cutting prices to move their properties.

The result: Buyers with lots of cash, or access to it, can find great deals. Not all million-dollar homes are castles, especially in coastal markets. But price drops and relatively small bumps in budget are landing shoppers the kind of amenities — kingly bathrooms, stables, gates — that were once beyond reach. Kenneth Rosen, chairman of the Fisher Center for Real Estate and Urban Economics at the University of California, Berkeley, says it is a “very good time to be a buyer at the high end.”

What’s your home worth?

In some markets, houses that are more than twice the size of others are on the market for less than twice the cost. Shaun Rawls, a broker at Keller Williams Realty in Atlanta, points to two homes with similarly desirable locations in that city’s wealthy Buckhead district. The smaller home, with 3,060 square feet, is priced at $765,000, or $250 a square foot. The larger home, with 7,612 square feet, has an asking price of $1.2 million, or $158 per square foot.

Though larger homes often have lower square-footage costs than smaller homes, the gap today is often greater. In Mill Valley, Calif., a 1,127-square-foot three-bedroom home listed at $898,000 just went under contract. Its per-square-foot cost: $797. A four-bedroom home five minutes away — and nearly three times the size at 3,077 square feet — is being listed at $1.5 million. Its square-foot cost: $486.

Similarly, in Scottsdale, Ariz., one four-bedroom home lists for $1.2 million while another lists for $1.48 million. That additional $280,000 buys a 5,400 square-foot home, 46% bigger than the cheaper house.

All things considered now is a great time to invest in a home as long as you do not have to sell an existing home. First time home buyers and investment buyers are in a great spot for the foreseeable future.

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Loans insured by the FHA are assumable; conventional loans, with a few exceptions, are not. That means that a home buyer who finances the purchase with an FHA-insured loan and who sells the house later, when interest rates are higher, will be able to offer a potential buyer the right to assume his low-rate FHA loan.

After approval of the buyer by the FHA, the buyer would assume all the obligations of the mortgage upon the sale of the property, and the seller would be relieved of liability. It would just as if the loan had been made to the buyer.

The major force behind assumptions is the ability of buyers to get financing at an interest rate lower than that currently charged by lenders. If the home seller has a mortgage with a rate below the market rate, having the buyer assume the seller’s loan can be better for both. The buyer enjoys a lower rate and avoids the settlement costs on a new mortgage.

The Federal Housing Administration (FHA) allows sellers and buyers to seek assumption in order to benefit both parties. Assumption occurs when the buyer takes over or assumes the mortgage on the home, a mortgage originally obtained by the seller years before. However, the process isn’t that simple.

Benefits

1. Mortgage assumptions are usually sought when the current interest rate offered by the bank is much higher than the rate that the seller originally obtained. Thus, the buyer escapes a higher mortgage payment.

Features

2. The lender must approve the buyer before the assumption occurs. The buyer’s credit, income and financial history are examined first. The buyer must also cover the difference between the house price and the balance of the mortgage. This is done using either a second mortgage at the current interest rate or cash.

Function

3. FHA loans originating before Dec. 1, 1989, have special considerations. To assume these mortgages, the buyer is not required to prove creditworthiness. However, in lieu of this credit check, the seller becomes liable for the loan if the buyer defaults before the balance is paid. The process is called Simple Assumption.

Considerations

4. To get away from the risks of Simple Assumption, the seller can ask for a release of liability document. Mortgages originating after Dec. 1, 1989, automatically come with such a clause. These mortgages require lender approval before the mortgage can be assumed.

Warning

5. The point of mortgage assumption is to get a discount on the interest rate. When the mortgage being assumed is significantly less than the price of the home, then the buyer must get a second mortgage or come up with cash. A second mortgage obtained at the current rate often negates the benefits of the assumption, making a conventional mortgage easier.

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Friday is the deadline for the federal tax credit.  It is being met with A flurry of activity at offices nationwide, there’s a last-minute rush by buyers looking to take advantage of a soon-to-expire tax break.

To spur the nation’s moribund housing market, Uncle Sam has been dangling a tax credit worth up to $8,000 for first-time home buyers and up to $6,500 for those who already own homes. To collect the credit, the buyer must sign the contract on or before April 30 and close by June 30.

The tax break seems to have boosted sales. Nearly 1.8 million Americans had cashed in on the credit as of Feb. 20, and March home sales in Florida jumped 24 percent compared to a year ago.

Now real estate experts wonder what comes next. Many fear sales will slump once the federal tax incentive is gone.

Others worry that some buyers who have signed contracts won’t be able to close by the June 30 deadline.

For people that are prepared, closing in 60 days shouldn’t be an issue for most however.

But if the property is a short sale, all bets are off, said Myles Minns, owner of Continental Properties in West Palm Beach.

“If anybody anticipates closing a short sale in two months, they’re insane,” Minns said. “It’s like trying to win the lottery.”

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Over the last year there have been major debates over the effectiveness of the Home Buyer Tax Credit. The major housing indicators agree however that the homebuyer tax credits – extended and expanded late last year – were a huge factor last month as new home sales soared 27 percent for March, a month over month rate not seen since 1963.

It was reported yesterday that new-home sales jumped to a seasonally adjusted annual rate of 411,000 units, reversing February’s record low and blowing past expectations of housing industry analysts. The National Association of Realtors reported existing home sales of 5.35 million units that is up 16.1 percent increase compared to a year ago.

“Undoubtedly, the tax credit is working,” said Bob Jones, chairman of the National Association of Home Builders (NAHB) and a home builder from Bloomfield Hills, Mich. “Builders are seeing a growing optimism among consumers.”

The real question is how big will the dip be following the expiration of homebuyer tax credits, which expire on Friday April 30th. An eligible taxpayer must buy, or enter into a binding contract to buy, a principal residence on or before April 30, 2010 and close on the home by June 30, 2010. First-time and repeat homebuyers are eligible for as much $8,000 and $6,500, respectively.

Fannie Mae economists foresee a plateau in activity by June. Most housing industry analysts see the job market and interest rates as the biggest motivating factors in maintaining any kind of momentum in home sales throughout the rest of the summer.

“The increased sales are very welcome news and sales will continue to improve, although we expect them to plateau in late spring and early summer when the credit expires,” said NAHB Chief Economist David Crowe. “Following that, the housing momentum will be carried forward by low interest rates, pent up household formations, excellent affordability conditions and a budding employment growth.”

“With the tax credit pulling forward some sales into the first half of this year, we expect sales to pull back in the third quarter,” the Fannie Mae report said. “If the labor market improves substantially, as we anticipate in the fourth quarter, home sales should rebound and begin a self-sustaining recovery without the help of a tax subsidy.”

But Fannie Mae reiterates that the current surge is coming off sluggish or weak home sales figures for January and February, resulting in residential investment having fallen in the first quarter after gaining in the third and fourth quarters of last year.

“We expect (residential investment) to increase modestly in the current quarter and going forward,” Duncan and Velz said. “For all of 2010, we expect residential investment to add just 0.2 percentage points to Gross Domestic Product — still an improvement after subtracting from GDP during the past four years.”

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RISMEDIA, April 19, 2010—Two surveys of elite real estate brokerages indicate that in 2009, RE/MAX significantly outperformed its national competitors. RISMedia’s 2010 Power Broker Report & Survey ranked 69 RE/MAX brokerages among their Top 300, representing 23% of all ranked brokerages. This showing placed RE/MAX 47% higher than its closest competitor. In the REAL Trends 500 survey, 122 RE/MAX brokerages earned a ranking, giving RE/MAX 24% of the top 500 brokerages in the U.S.

“We are so proud of our sales associates for earning such an impressive distinction, especially considering how difficult today’s market is,” says Margaret Kelly, CEO of RE/MAX International. “The fact is, only the best trained and most experienced agents will find ways to succeed and be able to provide valuable assistance to so many American families facing financial difficulties.”

RE/MAX Alliance Group was also top on the list with over 100 million in Single Office Volume.  This prestigious award sets RE/MAX Alliance Agents apart from the rest and acknowledges their hard work and dedication.  Each year RE/MAX recognizes the accomplishments of the regional offices with this outstanding accomplishment.

RE/MAX sales associates had the highest agent productivity of all the national real estate brands. In the RISMedia’s 2010 Power Broker Report & Survey, sales associates affiliated with RE/MAX brokerages averaged an impressive 15.1 transaction sides per agent, an 18% increase over their winning position in last year’s survey, and a performance that placed them 26% higher than the next closest competitor.

Kelly believes a significant factor in the success of RE/MAX sales associates is the comprehensive educational resources available through RE/MAX University. “Our associates lead the industry in sales experience and professional designations. Within the past year, over 15,000 agents earned a distressed property designation from RE/MAX University, our on-demand, multi-media educational institution, and we have significant initiatives that will increase those efforts in the coming year.”

The National Association of Realtors® has said that nearly 40% of the current market consists of distressed properties, including foreclosures and short sales. However, because the short sale process has been difficult for distressed homeowners and Realtors to navigate, RE/MAX has led a lobbying effort in Washington, DC to revise the process. As a result, the Treasury Department announced that as of April 5, all lending institutions participating in HAMP must follow new, uniform short sale procedures.

“We worked long and hard for this reform, and are very pleased that Treasury has now put these short sale measures in place,” says Dave Liniger, Chairman and Co-Founder of RE/MAX International. “With Treasury, we produced a special satellite broadcast to train our agents on the new short sale process. We hope the result is that fewer families will go through the traumatic foreclosure process, and we can reduce the number of foreclosed properties on the market.”

The 22nd annual Power Broker Report is produced by RISMedia and the complete report can be found online at www.rismedia.com. The final REAL Trends 500 survey will be released on May 1, but a preliminary summary is now available online at

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Will the current $8,000 tax credit for first-time homebuyers and the $6,500 tax credit for second-time buyers end this month? if so will that also mean the end for the housing recovery?

It’s a toss-up, say pro-tax credit-leaning advocates. But the program will continue through the end of this year, or at the least, for another six months, they maintain.

Yet some seem confident the program will be terminated at the end of April.

Unfortunately President Barack Obama and his administration have not given any tea leaves that can be read for future outcomes.

One industry professional, however, is going out on a limb with the pro-tax credit extension group.

Mitchell C. Hochberg, a principal at Madden Real Estate Ventures, LLC in New York City, tells Real Estate Channel:

“Congress will extend the credits to mitigate the impact of two recent events: The Federal Reserve ending its program of buying mortgage backed securities and the recent rise in mortgage rates (30 year fixed rate mortgages climbed to 5.31% from 5.04%) both of which will have a negative impact on home sales.”

Termination date is April 30. The eight-month program, first announced in February 2009 and scheduled to end Dec. 1, 2009, was extended in November 2009 to April 30, 2010.

The positive effect of the program has been record-shaking.  All  agree that one million homes have been sold to date, largely due to the tax program.

Yet U.S. Central Bank ended its $1.4 trillion investment into purchasing mortgage-backed securities on April 1 of this year.

But proponents of the program, including all of the Washington, DC-based trade lobbyists, brush that argument aside.

Instead, they maintain the program will be extended because it could prove to be a smart political move in this election year.

Sen. Bill Nelson (D-FL)

So far, however, the rumblings haven’t been loud on Capitol Hill. But they will be as the April 30 deadline approaches, industry watchers say.

In the past 18 months, the big guns for the initial and extended programs have been Sen. Bill Nelson (D-FL), Senate Majority Leader Harry Reid of Nevada, Senate Finance Committee Chairman Max Baucus of Montana and Sen. Johnny Isakson (R-GA).

Isakson especially was in the forefront of the last program extension. He wanted the program to be extended through Dec. 30, 2010; double the credit to $15,000; and remove restrictions that prohibit individuals who already homes or earn $75,000 to $150,000 for couples, from getting the tax break.

Isakson’s bill was shot down in a close Senate vote, 50 to 47 in August 2009.

Sen. Harry Reid

The two biggest housing grade groups, the 1.2-million-member National Associations of Realtors and the 800-association member National Association of Home Builders, had also favored expanding the credit to $15,000 at that time.

Failure to extend what may be one of the most effective pieces of the Obama administration’s 3009 stimulus legislation would cost jobs, economic growth and tax revenue, the housing groups argue.

There has been no official comment from Obama. However, when the current program extension was being debated in November 2009, the President’s press secretary, Robert Gibbs, told the media Obama was “evaluating the impact” on new home sales.

Lawmakers are under pressure from real estate agents, mortgage brokers, title settlement offices and home builders to extend the program.

Sen. Max baucus

However, lawmakers are also facing pressure from governance groups and recent IRS reports claiming widespread fraud around claims for the $8,000 and $6,500 tax credits.

According to published reports, the IRS has identified about 75,000 claims totaling almost $600 million that may not be from first-time homebuyers.

They also found that about 600 taxpayers under 18 years old and ineligible to buy a home claimed almost $5 million in credits.

Two key related questions are also part of the program extension debate. They are: Will mortgage rates rise and will the housing market thrive or fall after the program ends?

Sen. Johnny Isakson (R-GA)

Industry experts say the answer to the first question is easy – mortgage rates already are rising from the 5 percent level they have been at for the past 18 months.

The answer to the second question continues to remains debatable and will vary from market to market.

For example, a quicker recovery than in most of the nation is being forecast for the Philadelphia-Baltimore-Washington, DC corridor. That’s largely because of the heavy presence of a government-employee and military population, according to several brokers.

The Minneapolis-St. Paul market is also healthy but only because of the tax credit programs, points out Tony Maurer. President, St. Paul Area Realtors Association.

Tony Maurer

“The programs helped prop up a sagging housing market,” Maurer says in published reports. “There is no question that the First Time Homebuyer Tax Credit, as well as the federal government’s purchase of bank securities has stabilized the marketplace.

However, Maurer says, “It is an unknown that at the conclusion of the tax credit program, what we will see from the marketplace standing on its own.”

Maurer’s counterpart across town, Brad Fisher, president, Minneapolis Area Association of Realtors, speculates interest rates could continue rising, once the tax credit program ends.

“I think we will have to get through the April 30 deadline for people to buy homes and then we will have to see the demand after that, because that will have a bearing on where our interest rates go,” Fisher says.

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HAFA is an acronym for Home Affordable Foreclosure Alternatives, it is a government program that helps individuals and families who are experiencing difficulty in selling their homes. It works with the Home Affordable Modification Program (HAMP), HAFA was initiated on November 30, 2009 by the U.S. Treasury Department under the Obama Administration with the goal of revitalizing the housing market.

HAFA Provisions

• Complements HAMP by providing a viable alternative for borrowers (the current homeowners) who are HAMP eligible but nevertheless unable to keep their home.
• Uses borrower financial and hardship information already collected in connection with consideration of a loan modification.
• Allows borrowers to receive pre-approved short sales terms before listing the property (including the minimum acceptable net proceeds).
• Requires borrowers to be fully released from future liability for the first mortgage debt (no cash contribution, promissory note, or deficiency judgment is allowed).
• Uses standard processes, documents, and timeframes/deadlines.
• Provides the following financial incentives:
  • $3,000 for borrower relocation assistance;
  • $1,500 for servicers to cover administrative and processing costs;
  • Up to $2,000 for investors who allow a total of up to $6,000 in short sale proceeds to be distributed to subordinate lien holders, on a one-for-three matching basis.
• Requires all servicers participating in HAMP to implement HAFA in accordance with their own written policy, consistent with investor guidelines. The policy may include factors such as the severity of the potential loss, local markets, timing of pending foreclosure actions, and borrower motivation and cooperation.

For more info take a look at what the Co-Founder of REMAX has to say about the New H.A.F.A. Program

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