Mortgage Payment Cheaper Than Rent in Kentucky

What Payroll Reduction? Homebuyers to Pay the Cost

When President Obama signed into law the Temporary Payroll Tax Cut Continuation Act he put the cost of the reduced payroll tax cut on homebuyers by increasing the guarantee fees on new mortgages.

The amount of the guarantee fee increases will be included in future mortgage rates. In the past all guarantee fees collected by the agencies were held in separate guarantee pools. The increased fee will go straight to the General Fund. Several elements in the bill are not quite clear and may take weeks or months to determine.

The primary questions are:

1. How much will the Fannie and Freddie g-fee rise? The Act calls for a minimum increase of 10 basis points, but the amount of the increase is to be determined by FHFA. The early expectation from insiders is that the increase will be 10 basis points. An enactment date hasn’t been determined yet.

2. Will the increase in guarantee fees hit all at once? The Act says the FHFA may phase in the increase over a two-year period. This could make the initial effect on mortgage rates fairly small. However, the FHFA could make the increase applicable all at once.

3. How much will the FHA’s annual insurance premium increase? This is the easy one. The answer is 10 basis points. Date of enactment is not clear.

Everyone knows the housing industry carries the economy into and out of a recession. Why is it that the one thing that can boost the economy the quickest is being burden with too many regulations and additional fees?

The other sad part is the American public thinks they really got a tax reduction. So much for transparency

December Sale of The Month

Previously described as the “mack daddy” of Penthouses in Miami Beach- Penthouse ‘A’ at The Setai South Beach closed yesterday for a record-setting $21.5M.

To see the interior photos and learn the rest of the story go to http://bit.ly/tGlN6l

This Graph Alone Explains A Lot of This Country’s Problems

CLICK GRAPH TO ENLARGE

We All Need Free Money For 99 Years

In some parts of the country it has been a practice of some HOA and Condo Associations to collect a “resale fee”, now sometimes called a “flip fee”. Basically the current seller of a unit in these Associations had to pay a fee (typically 1%) every time the property sold. This fee went to the common area maintenance which kept the monthly fees down in theory.

Now builders have decided this is a good idea and in some parts of the country have been implementing the same type fee. Everytime the house is sold the seller must pay the builder a “flip fee”. This goes on for 99 years. The funds go straight to the builder and in no way benefits the neighborhood. It is just residual income to the builder for his life and the life of his heirs.

We all need a deal like that. Fortunately it hasn’t caught on in Kentucky.

Where Has Personal Responsibility Gone??

The lack of individuals willing to take personal responsibility for their actions is getting more blatant everyday. Here you have a company named www.youwalkaway.com putting out a video that almost glamourizes intentional mortgage default. The worst part is they have been exposed to the public by every major media outlet. While the video is cute and funny it still says something about the personal values of many homeowners.

Am I overreacting…I don’t think so?