Source: Inman News

The Obama administration's proposed 2012 budget would trim the value of itemized deductions for high-income taxpayers by nearly one-third, reducing the tax benefit some homeowners with mortgages receive if they itemize the interest portion of their loan payments on their tax returns.

An across-the-board 30 % reduction in itemized deductions for high-income taxpayers would represent the most significant tightening of a tax break since a major overhaul of the tax system in 1986, the administration said.

Obama also said he continues to oppose the permanent extension of the 2001 and 2003 tax cuts for families making more than $250,000 a year.

Under the current tax code, the mortgage interest deduction could save a family in the 39.6% tax bracket with a brand new $500,000 mortgage as much as $9,820 in the first year of the loan.

If the cap was lowered to 28%, as proposed, the mortgage interest deduction would be worth no more than $6,900 to the same hypothetical family with a new $500,000 mortgage -- or 30% less.

That's not as dramatic a reduction as the one proposed by the deficit commission, but industry groups were able to shoot down the proposal for a 28% cap last year.

The National Association of Realtors and other industry groups have mounted advertising and lobbying campaigns arguing that the mortgage interest deduction also benefits the middle class.

NAR was critical of the deficit commission's proposal to revamp the mortgage interest deduction, claiming an adjustment could hurt home prices by up to 15%. NAR promised to "remain vigilant in opposing any plan that modifies or excludes the deductibility of mortgage interest." 

The percentage of mortgage holders who were behind on their payments dropped to the lowest level in two years during the fourth quarter of 2010, the Mortgage Bankers Association said in a report dated February 18.

"While delinquency and foreclosure rates are still well above historical norms, we have clearly turned the corner" in the foreclosure crisis, MBA Chief Economist Jay Brinkmann said in a statement.

The MBA National Delinquency survey covers 43.6 million loans -- about 88 percent of all outstanding first-lien mortgages. If the survey's results are extrapolated, about 4.1 million homeowners were 30, 60 or 90 days or more behind on their mortgage payments during the fourth quarter, and another 2.3 million were in the foreclosure process.

Source: MyFICO.com 

Credit score facts & fallacies - Part I

Fallacy: My score determines whether or not I get credit.

Fact: Lenders use a number of facts to make credit decisions, including your FICO® score. Lenders look at information such as the amount of debt you can reasonably handle given your income, your employment history, and your credit history. Based on their perception of this information, as well as their specific underwriting policies, lenders may extend credit to you although your score is low, or decline your request for credit although your score is high.

Fallacy: A poor score will haunt me forever.

Fact: Just the opposite is true. A score is a "snapshot" of your risk at a particular point in time. It changes as new information is added to your bank and credit bureau files. Scores change gradually as you change the way you handle credit. For example, past credit problems impact your score less as time passes. Lenders request a current score when you submit a credit application, so they have the most recent information available. Therefore by taking the time to improve your score, you can qualify for more favorable interest rates.  

To better serve you we have added a new service - an email address to which you may pose mortgage financing questions.
 
Please email questions@a2mc.com and a loan officer will respond to your inquiry as soon as possible.
 
We hope that you find it useful and welcome any feedback.

LATE WITH THE PAYMENT - At the end of 2008, 8% of mortgages had at least 1-payment past due and another 3% of mortgages were in the foreclosure process. At the end of 2009, 10% of mortgages had at least 1-payment past due and another 5% of mortgages were in the foreclosure process. At the end of 2010, 9% of mortgages had at least 1-payment past due and another 5% of mortgages were in the foreclosure process. (Source: Mortgage Bankers Association)

LIVING ON THE CHEAP - It takes a lending institution 507 days on average to foreclose on a non-paying loan today. This means a homeowner that has stopped making mortgage payments after today (2/28/11) could, on average, live in his/her home until 7/19/12 (i.e., a year from this summer) before the lending institution would foreclose on the property and remove the non-paying homeowner. (Source: LPS Applied Analytics)

OWN vs. RENT - There are twice as many households that own homes (74.8 million) as there are households that rent a home or an apartment (37.7 million) as of 12/31/10 (Source: HUD) 

I recently had the surreal yet incredible experience of spending the first night in my very first home. It was only a few months ago that I thought buying a house might be a possibility, and Pete Stegler was the person who made it a reality.

He went above and beyond to help me by explaining every step in the home buying and owning process. Pete set me up with a realtor, inspector and insurance agent who had the same work ethic and knowledge that he does- a team that I trust and will continue to use in the future.
 
I am forever grateful to Pete for working with me like I was his only client and for helping me to achieve such an amazing milestone in my life.

Thanks Pete!!!!!
 
Brandi T-S

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Mary Adams was so very helpful to us, as we endured a very long home buying process. Being first time buyers, she walked us through a difficult and unusual series of issues. We felt a strong sense of trust with Mary from the very beginning, without which we cannot imagine how the process would have been successful for us.

We recommend Mary very highly.

Jamie C.