“The concept of ownership is far from dead, but the Wild West approach to financing it is dead’’
-Jack Manning (co-founder of real estate investment company Boston Capital)

Post housing bubble, home sales were so dead that Washington developed a tax incentive for Americans to buy homes. You may remember it, it was called the homebuyer tax credit (and we’ve had more than one of them). Even with the tax credits, home sales remained low. The drop off in sales we’ve witnessed after each of the tax credits have expired have been so pronounced that Washington has even considered rolling out the homebuyer tax credit for a third time.

Paul McMorrow, associate editor of CommonWealth magazine and a Boston Globe columnist, says that the low levels of home sales aren’t something that should necessarily shock or even scare us. He writes that the significant drop in home sales have to do with more than just the country’s ongoing economic struggles and the “post-tax-credit hangover.” McMorrow writes that the lack of sales is “also evidence of a fundamental shift in national housing policy.”

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Saturday

“Initial homebuyer tax credit numbers are in“:

The Government Accountability Office (GAO) has released its report on how many homebuyers took advantage of the credit so far, and how much it cost us:

1 million buyers have claimed $7.3 billion of the repayable, $7500 tax credit for first-time buyers.

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The homebuyer tax credit is getting its second wind…or should I say third wind? The homebuyer tax credit has been back in the news ever since HUD Secretary Shaun Donovan failed to give a reporter a straight answer when asked whether the administration was considering a third tax credit.

Yet while the tax credit may be in the news again, the general consensus — coming from sources as diverse as writers to home builders and realtors — is saying it shouldn’t come back: Read the rest of this entry »

The bursting of the housing bubble and the continued drag it has placed on our overall economy has caused many of us to debate, or at least question, where we stand on the American dream and its relation to homeownership.

Late last year we wrote a post titled, “Is renting the new American dream?” A few months back we wrote about how “…the American dream of home ownership turned into a nightmare of debt and foreclosure” (a quote from David Wessel of the Wall Street Journal). Each of those posts questioned the old ideal that, as Americans, homeownership is something we all should strive for and is a gauge of our overall success. Maybe most of us are better as as renters as opposed to owners.

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When asked whether Washington would consider instituting another homebuyer tax credit, HUD secretary Shaun Donovan responded saying, “I think it’s too early to say after one month of numbers whether the tax credit will be revived or not. All I can tell you is that we are watching very carefully.” Donovan’s comments have created a whirlwind of speculation that the government will once again step in and distort an already-unbalanced housing market.

Striking a balance

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For a certain set of borrowers they are. Congress has passed on legislation to President Obama for his signature that would effectively renew the United States Department of Agriculture’s (USDA) Single-Family Housing Guaranteed Loan Program.

Mortgage professionals and borrowers alike have been clamoring for this renewal, especially with the expiration of the homebuyer tax credit creating a real buzz in the rural market. Who could blame borrowers for wanting to take advantage of the zero-down financing plus the $8,000 credit, and the lenders and realtors wanted the business that comes along with it.

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Saturday:

“Here Are a Few Things to Think About“:

-Who is and who should be ultimately responsible when it comes to a failed home loan?

-With rental vacancies falling and rents increasing in certain areas of the country, should existing and would-be renters be worried?

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1). Who is and who should be ultimately responsible when it comes to a failed home loan? Some feel as though it’s entirely the borrower’s fault — they should have known better.

“There’s much regarding the borrower-is-responsible view which is attractive, including simplicity,” writes financial expert Peter Miller. “That said, borrower responsibility should be seen as a nuanced concept, one which requires a look at both principle and circumstances.”

Miller goes on to examine quite a few circumstances that help provide a balanced approach to ultimately deciding who’s at fault and who isn’t.

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Over the last few weeks or so, we (the blog) have been encouraging readers to elaborate on their comments by offering them the opportunity to write a guest post. Recently, many readers have been leaving great comments — some with unique situations, others with interesting perspectives — that we felt would translate nicely into guest blog post.

We received a blitz of comments from readers who complained that loan servicers were “dragging their feet” and would not close their deal in time to take advantage of the homebuyer tax credit (this was before we knew the president would extend it until September 30). The hundreds of comments we’ve received and the votes on our poll have made it clear that borrowers were really depending on the credit’s closing extension and would be outraged if factors beyond their control would not allow them to close in time.

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We want to thank all our readers who participated in our latest poll: “Do You Support the Extension of the Homebuyer Tax Credit’s Closing Deadline?”

With over 1,000 votes so far, it is clear that the overwhelming majority of our readers supported the extension. To date, 92% of voters thought extending the closing date of the homebuyer tax credit was a good idea, with some 77% noting that their deal wouldn’t have closed without it.

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