Congress passed the Homebuyer Tax Credit Extension. Here are the main facts that you should know:

* The tax credit has been extended to April 30, 2010.

* Repeat buyers who have owned their homes for at least 5 years are now also eligible for a credit of up to $6,500 from the government.

* If you’re a first-time homebuyer you may be eligible for a credit up to $8,000.

* To qualify, buyers have to sign purchase agreements by April 30, 2010 and have 60 days to close by June 30, 2010.

* The credit is available for the purchase of principal homes costing $800,000 or less.

* The new tax credit has increased income limits.

* Individuals with annual incomes up to $125,000 and up to $250,000 for joint filers are now eligible before the credit begins to phase out.

* The credit is equal to 10 percent of the purchase price of a primary residence.

* Taxpayers can claim the credit on their federal income tax returns. If the credit exceeds their tax bill, the government will issue a payment.

* Taxpayers who want immediate refunds can amend their tax returns for 2008 to claim the credit.

* Those who sell their new home or stop using it as their main residence within three years would have to repay the credit.

* You must be at least 18 year of old to claim the credit.

LAUSD is now the home to the Belmont Zone of Choice, an innovative pilot school program developed from the ground up by UTLA and a grassroots coalition of teachers and community groups.  The group recently presented at Burbank Middle School in Highland Park.  Click here for more information on this project.

It really isn’t all about rates.  No matter what lender you go to you’ll likely get similar rates.

When looking for help in getting a mortgage loan, interview multiple loan officers, don’t just go with the first one you talk with! If you talk to more than one, you usually will find one that just seems to be “right” for the job. Finding the “right” loan officer can possibly save you money, but almost certainly will save you time and effort in the qualification process and once you’ve found a home and are in escrow.

Here are 5 simple questions that you can ask loan officers when interviewing them:

How many loans have you closed that are for people in my situation?
In the answer for this question, look for a specific number and listen to the *types* of loans that he/she has experience in. Refinance transactions are different than purchase transactions. Conventional loans are different than FHA loans. To increase the chance that your loan officer will be able to handle your loan smoothly, look for how many similar loans he has personally closed.

Are you a mortgage broker or a mortgage banker?
There are pros and cons for consumers when working with each type. Mortgage brokers often blame the lenders underwriters because they don’t have direct control of the underwriting department. Mortgage bankers often have slower turn times and don’t do as many different types of loans. Neither one is necessarily bad – but it is good to know what you are dealing with up front.

Can you walk me through the steps of the loan process?
A good loan officer should be able to detail out each step of the loan process and give you a good idea of the time frames for each step that you can expect. Pay particular attention to the time frames the loan officer gives because this is where they set your first expectations. If they say that they can get a loan closed in 10 days in this market… be careful. I am not saying that it can’t be done, but that is a sign that the loan officer likes to over-promise and under-deliver.

What problems can you see potentially arising in my situation?
A good loan officer should be able to give you at least 3 things to watch out for in your situation. Even if you have perfect credit and millions of dollars – there are still things that could potentially slow your loan down in the process and a good loan officer knows where the potential problems are for your situation.

Do you offer a float-down option?
Note: this is particularly important when interest rates are falling. A float down option is where after you have locked your loan, if rates go lower, they can “float down” the rate for you at no charge. Few mortgage professionals offer this option, but this is a question that you should ask up front.

If you ask these 5 questions during your first interview of a loan officer, you have a much better chance of “finding good help”.  It will be well worth your up-front investment.

Wait.

Did you notice that one of the questions is not “how much do you charge and what are your rates like?” No, I didn’t forget it. All of the great loan officers will probably talk about that before you even get a chance to ask the question.

If you’re a homeowner struggling with or behind on your mortgage payments – first you’re not alone – second the best thing you can do is to be aware of and understand your options.  No matter what your financial situation, the WORST thing you can do is NOTHING.   There are options and your financial situation will likely determine which is the best path for you to take.  If you absolutely can not make the mortgage payment, now or in the near future, at this point you should be looking at how to minimize your loss and the impact to your financial and credit situation.

Reinstatement

Acknowledging the delinquency and working with your lender to bring the loan current.

Reinstatement is the acknowledgment by a loan Servicer that a loan in default has been brought current by the homeowner. There are several different workout options that would generate a reinstatement. The most common options are defined below.

Loan Modification: A written agreement between the Homeowner and the loan Servicer to temporarily, or permanently, alter one or more of the terms of the original agreements. There are several types of loan modifications, including (1) rate reduction; (2) capitalization; (3) term extension; and (4) one-time assumption.

NOTE: Anything in writing can be modified, i.e. interest rates, term of loan, due date, etc. All changes must be in writing.

Option 1: Rate Reduction Modification

This type of loan modification may permanently reduce the interest rate associated with the loan, thus lowering the monthly payment for the Homeowner.

Option 2: Capitalization/Forbearance

Capitalization/Forbearance means adding the delinquent payments into the remaining balance and updating the payment due date and perhaps “recasting” the payment amount. Capitalization may be used when other modifications would not be appropriate, such as, if the interest rate is already at or below the market rate, or if the delinquent amount due is just too much for the Homeowner to pay back within the specified period of time.

Option 3: Term Extension

Term extension is extending the amount of time the Homeowner has to repay their loan to achieve a reduced monthly payment (i.e. 15 year mortgage extended to 30 years). Term extensions are often used together with an interest rate reduction or a capitalization modification.

Option 4: One-Time Assumption

Most mortgages are non-assumable, which means the loan cannot be transferred from one owner to another. However, as a form of loss mitigation/Home Retention,the loan Servicer may opt for a one-time assumption, in order to facilitate the sale of the property. Generally if the Homeowner can demonstrate hardship, Fannie Mae and Freddie Mac will allow a one-time assumption. HOWEVER, the transaction must be an “arm’s length” transaction. In other words, there cannot be any pre-existing relationship between the Homeowner and the individual assuming the mortgage.

Option 5: Loan Type Conversion
Some Homeowners with an adjustable rate mortgage (ARM) may not be able to keep up with increased payments during times of increasing interest rates. In this case, the loan Servicer may opt to modify the loan type to avoid increasing the interest rate. The loan could be converted to a fixed rate mortgage.

If you’re unable to pay your mortgage and don’t think you will be able to soon, the follow are some options you may want to consider:

Pre-Foreclosure Sale

In a pre-foreclosure sale, the lender/servicer allows the Homeowner to sell the house within a 2 to 4 month time frame. During this time, the house must be actively marketed.

Short-Sale

A short-sale requires that prior to the sale, the Servicer agrees that the sales proceeds from the sale of the Homeowner’s home will satisfy the debt, even if that amount is less than what the Homeowner owes on the loan. The Homeowner may be responsible for taxes on the forgiven debt.  This may be an option if you need to sell for other reasons, such as job relocation or divorce.  The Homeowner should refer to a Tax Attorney or their Tax Accountant.

Deed-in-Lieu

A deed-in-lieu of foreclosure is when the Homeowner voluntarily gives the property deed to the loan Servicer in exchange for forgiveness of the debt. In this situation, the Homeowner does not have a foreclosure or deficiency judgment on his or her credit report. The Servicer will report a derogatory report on the Homeowner’s credit report.

Struggling home owners are scrambling to get modification loans. In order to increase your chances of approval, you need to know how to fill out the loan modification form correctly! This could mean the difference between saving your home and foreclosure!

The first step is to make sure you have everything the lender will require. You will need to contact your lender to make sure you have every loan modification form required by your bank. Here is a list of the most commonly required loan modification forms:

1. Borrower Statement: This is an information sheet that includes your name, address, social security number, and job history and dependant information. Basic facts will be required by all lenders.

2. Financial Statements: This is where you show the lender your current financial situation, including an itemization of your income and expenses. It is important to indicate the reason your current mortgage payment is not affordable and how a new modified (lower) payment would be affordable for you now.

3. Hardship Letter: This is where you will write an essay explaining your situation. You must tell the lender why you are currently or soon will be suffering a financial hardship. (Job loss, death in the family etc.) This is your chance to explain specifically why your current mortgage terms are out of your range and how changing the terms or lowering the payment will be within your new budget. This is SO important, take your time and make sure to stay on topic!

4. Cover Letter: This is your submission cover letter which should state the new terms or payment amount that you are requesting. It’s important to determine what you can afford ahead of time; this shows the lender that you are serious and have done your homework, adjusted your budget and will be able to meet the new obligation.

5. Rental Schedule: If you currently have rental properties, this is the form you will use to indicate your monthly cash flow and whatever equity is involved in the rental properties.

Again, be sure to find out specifically what your lender requires as far as loan modification forms. Each lender will have unique requirements.

The key to being approved for a loan modification is in filling out the forms! You must indicate why you are or will be suffering a financial hardship. You really need to do your homework before giving your lender any financial information regarding your current situation; once you turn in your documents you cannot make any changes! This is crucial! Take the time to prepare your budget and to be able to show what monthly payment and terms you can afford! You must be able to indicate that your budget will allow for this new modified payment as well as leaving you some disposable income left over.

The decision to approve or deny your loan modification request truly is based upon how thorough and prepared your application forms are. Talk to your lender, find out what loan modification form they require and then take the time to fill them out completely and accurately! This truly can be the difference between foreclosure and saving your home! It’s too important to leave to chance; you must do your research!

Are you planning a remodel? Give some thought to the original style and finishes in your home before you begin. An appreciation for its stylistic roots will help you create a home that has an enduring style, and will be more valuable to buyers if you decide to sell.

Build your improvements around the best original features of the home. People love clues to the past. Historic features endure and pass the test of time. Often, we see interesting old finishes ripped out and replaced with bland, standard issue cabinetry or tiles. Don’t be afraid to blend old finishes with modern ones. The one-of-a-kind, eclectic look is much desired, instead of a mass produced sameness. You will create a truly unique combination of new and old.

Wood windows, wood doors, period door knobs, old stone steps, original baseboards and door trim can add a touch of historic significance to your home. People are delighted by retro bath tiles combined with a splash of new wall color. Look at retaining the original fireplace tile or stone before tossing it into the dumpster. Retro wallpaper can be a great find. These touches of the original character are truly valuable, and should be carefully considered. Old phone niches, mail slots, coat racks, sinks, or fixtures can find a place in a new design.

The Craftsman style, built in the early 1900’s, is in very much demand. Rustic stonework, deep eaves, tapered columns, stained woodwork, and wide trim reflect the handmade look that people love.

Farmhouses are a great style choice for today. Think in terms of simple floor plans, hardwood floors, wood windows, local stone and muted colors that connect with nature. Like farm buildings, the rooms are informal, somewhat spare, and provide just what is needed.

Younger folks are breathing new life into their parent’s ranch styles and split levels from 1950’s and 1960’s. Mid-century modern furniture, paint colors, fixtures, and rugs are all the rage, and fit perfectly with this style.

Urban modern is everywhere, with experimental use of space, color, glass, plastic and metal. Simplified spaces with clean lines and fresh colors are an antidote to today’s complex lifestyle.

Whatever direction you choose to take your home, reinforce and build on the design strengths it already has. You will create an interesting home that buyers will love.