Embed Size (px)
DESCRIPTION
August 10, 2009
Citation preview
Vol.1 No.23 www.csrej.com August 10, 2009
ALSO INSIDEPAgE 7 PAgE 9PAgE 3
Contract Issues and Clarification
Vanguard Homes Realtor Brunch
Campbell HomesCompany PicnicAt Sky Sox
PRSRT STDUS POSTAGEPAIDPERMIT 745 COlO SPGS CO
National News ................. Page 2Local & State News ........... Page 6On the Move ................... Page 9Local Expert ................... Page 10Around the Corner ............Page 11
Clock running down on first-time home buyer tax credit
Uptrend continues in pending home sales
• What it means for your closing timelineNew Mortgage Disclosure Improvement Act
The mortgage industry is ever-changing and as a REAL-TOR® you are challenged to stay on top of these changes for your clients. The most recent legisla-tive change you need to be aware of is the implementation of the Mortgage Disclosure Improve-ment Act (MDIA) that is in ef-fect with mortgage applications starting July 30, 2009.
The spirit of this new legislation is to help provide homebuyers with better information when it comes to financing a home. The goal is to elimi-
nate surprises for the homebuyer at the closing table. In the past, unscrupulous lenders would
add hundreds or even thousands of dollars in fees to the final closing documents. The borrowers would have little recourse other than to close the transaction or risk losing their rate lock. The MDIA is designed to allow homebuyers the opportunity to fully understand and get answers to their questions when applying for a mortgage. It gives them the ability to compare esti-mates – both with competitor’s rate and fees and a sec-ond disclosure if the terms, fees or APR have changed by more than the specified tolerance levels.
The three key elements you need to know about this new act are:
1. If the homebuyer is financing the property, these new regulatory guidelines could poten-
tially impact the closing date. While the closing date on a purchase money loan is still the target everyone strives to meet, it is important to take into account that these new regulatory requirements could delay the closing date. At a minimum, the earliest any home pur-chase transaction can close is seven business days after the initial mortgage disclosures are delivered or placed in the mail by the lender.
2. Upfront fees cannot be collected by the lender (except for a credit report fee) until the ini-
tial disclosures are received by the borrower. This is deemed to be three business days after the lender has
mailed them. A lender with an online application and electronic disclosure delivery process could speed up this timeline. It will be important to ask the lender how this might impact the rate lock.
3. An increase of more than .125% with a fixed rate mortgage in the Annual Percentage Rate
(APR) at the time of closing from the APR in the initial Truth in Lending Disclosure (TIL) requires the TIL to be revised and reissued to the homebuyer. The home-
buyer must receive the new disclosure at least three busi-ness days before closing. This could mean a six day delay as the borrower has to receive the revised disclosures three days before closing. Unless they receive them in person, the borrower is not considered to have received them until three days after they were issued.
So as a REALTOR, you can help make this new regu-lation more manageable by:
• Setting realistic expectations for the closing date. Anything under 30 days could be impacted if there are changes to the transaction.
• Communicating with your title companies to min-imize complications. Third party fees require close at-tention because they might impact the APR.
• Providing the lender with the title company infor-mation as soon as possible.
• Making sure the homebuyers understand that changes in the transaction or to their loan could affect the closing date.
The bottom line is to be in open communication with your client, lender and title
company. With new regulations like MDIA, you want to make sure you and your clients are up to speed on the changes and how it affects them and their clos-ing. By working closely with your lender, and under-standing the timeline, you can assure your client that their mortgage experience will be a smooth one.
Mr. Paukovich oversees the direction and management of mortgage lending, including loan servicing, at Ent Federal Credit Union. He can be reached at [email protected].
By Jon PaukovichEnt—
Pending home sales are up for the fifth consecutive month, the first time in six years for such a streak, ac-cording to the National Association of Realtors®.
The Pending Home Sales Index, a forward-looking indicator based on contracts signed in June, rose 3.6 per-cent to 94.6 from an upwardly revised reading of 91.3 in May, and is 6.7 percent above June 2008 when it was 88.7. The last time there were five consecutive monthly
gains was in July 2003.Lawrence Yun, NAR chief economist, said a com-
bination of positive market factors is fueling the gains. “Historically low mortgage interest rates, affordable home prices and large selection are encouraging buyers who’ve been on the sidelines. Activity has been consis-tently much stronger for lower priced homes,” he said. “Because it may take as long as two months to close on
a home after signing a contract, first-time buyers must act fairly soon to take advantage of the $8,000 tax credit because they must close on the sale by November 30.”
The Pending Home Sales Index in the Northeast rose 0.4 percent to 81.2 in June and is 5.8 percent above a year ago. In the Midwest the index increased 0.8 percent
See Pending Home Sales page 5
With the clock running down on the $8,000 tax credit for first-time home buyers and less than four months to go, builders are urging qualified prospective buyers to start the sales process long before the Nov. 30 deadline.
Faulty appraisals that have been using foreclosed prop-erties as comparables for new homes have been slowing down the sales process in many instances, builders warn, creating hiccups in the financing stage that can often push the closing date much later than originally expected.
First-time buyers should also anticipate tighter lend-ing standards that generally don’t allow 100% financing, making buyers responsible for coming up with enough money prior to their purchase to meet required downpayment and closing costs.
For these two reasons alone, young families consider-ing becoming home owners should be advised to start the process long before they put a bid on a new home. As part of that effort, builders can provide key educational information on the home buying process — including financing and closing — that their customers need to en-sure that they occupy their new home in time to claim the tax credit.
Assistance on Upfront Costs Available in 16 States
For home buyers who need assistance with downpay-ment and closing costs, some state housing finance agen-cies are able to provide a short-term loan based on the home buyer’s qualification for the federal tax credit.
Sixteen state housing finance agencies — in Colora-do, Delaware, Florida, Idaho, Illinois, Kentucky, Massa-chusetts, Missouri, Nebraska, New Jersey, New Mexico, Ohio, Pennsylvania, Tennessee, Texas and Virginia — are participating in loan programs to help facilitate home sales for first-time home buyers in their area.
See Tax Credit page 2
2 Colorado Springs Real Estate Journal www.csrej.com August 10, 2009
NATION
For Information Please Contact Toll-Free 866.481.2575
Be Sure to Stop ByThe Vanguard Homes Model
at 16648 Greyhawk Dr.in Jackson Creek!
Each state is different and qualifications and restric-tions vary among the programs.
Home buyers should be warned, however, that there are organizations or individuals who are providing this service who are not legally permitted to do so. If the or-ganization is a unit of state government, such as a state housing finance agency, it is safe to say that it is repu-table. Otherwise, a home buyer should check with their local Better Business Bureau or through a state or local government’s department of consumer affairs to ensure that the program they are working with is legitimate.
Remind Buyers of Requirements, Special Circumstances
Although the tax credit has three requirements listed for home buyers to qualify — status as a first-time home buyer, timeframe in which the home must be purchased and income limits — it is sometimes not that simple. Specific situations — such as those involving the sale of a home between related individuals or prior ownership of a mobile home as a primary residence — may result in a buyer’s disqualification from claiming the credit.
In a statement released last week, the Internal Rev-enue Service (IRS) warned taxpayers to beware of first-time home buyer tax credit fraud. Home buyers who may be unsure of their status on claiming the tax credit should seek professional advice from a certified public accountant or an enrolled agent licensed by the federal government.
Home buyers who may need additional information can find answers to frequently asked questions about the tax credit at www.federalhousingtaxcredit.com.
The above article has been provided to you compliments of NAHB and Nation’s Builder News.
Mortgage rates rise slightly along with optimism on housingOptimism that the economy may be stabilizing
pushed up bond yields last week, and mortgage interest rates rose along with them, according to Frank Nothaft, Freddie Mac's chief economist.
The 30-year fixed-rate mortgage averaged 5.25% for the week ending on July 30, according to Freddie Mac’s Primary Mortgage Market Survey, up slightly from 5.20% during the prior week, but down significantly from 6.52% one year earlier.
The 15-year fixed-rate mortgage averaged 4.69%, up from 4.68% the week before. Five-year Treasury-indexed hybrid adjustable-rate mortgages climbed almost imper-ceptibly from 4.74% to 4.75% and one-year ARMS in-creased from 4.77% to 4.80%.
The financial markets last month derived their opti-mism on conditions in the nation housing market from a number of sources, including the Federal Reserve, which reported weakness in most of its districts, but also signs of improvement, especially in sales of entry-level homes profiting from the availability of the first-time home buyer tax credit.
“Other economic reports confirm that the housing market may indeed be bottoming out,” said Nothaft. "New home sales rose for the third consecutive month in June to an annual pace of 384,000 homes, the most since November 2008, and the number of new houses on the market fell to the lowest amount since February 1999, according to the Department of Commerce,” he said.
“Sales of existing homes also showed a three-month gain to 4.89 million, the most since October 2008,” said Nothaft, “and the share of distressed homes fell to 31% compared to almost half at the beginning of the year, the National Association of Realtors® reported.”
The news media widely reported last week that the housing industry was starting to see some signs of recov-ery, but analysts said that the upturn so far is tentative, with home builders facing such difficult obstacles as the continuation of rising unemployment and low consum-er confidence, more foreclosures and a dearth of credit to build and produce more housing.
News coverage focused on the findings of the Stan-dard & Poor’s/Case-Shiller price index, which showed
10- and 20-city composite prices of single-family homes rising 0.5% from April to May, the first monthly increase since 2006.
However, at an annual rate those indexes declined 16.8% and 17.1%, respectively, according to the May data, which showed the index improving for the fourth consecutive month after a steep decline that commenced in the fall of 2005.
“While many indicators are showing signs of life in the U.S. housing market, we should remember that on a year-over-year basis home prices are still down about 17% on average across all metro areas, so we likely do have a way to go before we see sustained home price ap-preciation,” said David Blitzer, chairman of the Index Committee at Standard & Poor.
Economists who have been forecasting that the econ-omy would start growing again in the second half of this year received encouraging news from the Commerce Department on July 31 showing that GDP declined at an annual rate of 1% during this year’s second quarter, better than expected, following a 6.4% rate of decline in the first three months of the year.
Forecasters are also expecting unemployment to con-tinue to rise into next year, eventually exceeding 10%, despite the turnaround in growth.
The above article has been provided to you compliments of NAHB and Nation’s Builder News.
“Other economic reports confirm that the housing market may indeed be bottoming out.”
Tax Credit from page 1
August 10, 2009 www.csrej.com Colorado Springs Real Estate Journal 3
Director of AdvertisingRachelle Nardo
Director of PublishingJosh Olson
Colorado Springs Real Estate Journal LLC (CSREJ) is locally owned and operated out of Colo-rado Springs, Colorado. CSREJ is published twice a month and dis-tributed through US Mail to nearly all members of The Pikes Peak Association of Realtors® and The Colorado Springs Housing & Build-ing Association and many other industry-related professionals.
CSREJ is not responsible for any opinions or facts expressed by non-staff writers. CSREJ shall not be held responsible for any errors in advertising or editorial content.
Realtor® is a registered trade-mark. Sometimes the word Re-altor® or Realtors® will appear without the “®” symbol for the purpose of saving space. The reg-istered trademark should be as-sumed if it is not present.
We welcome the submission of articles, photos and press releases. Please email any considerations to:
Article Submission•Please submit articles no lon-ger than 700 words in a Word document with an accompa-nying byline and appropri-ate contact information. A headshot is also welcomed. Please submit headshot in JPG format.
Press Releases•Please submit press releases directly into an email or an attached Word document. A PDF is acceptable but not preferred. Please include any photos in JPG format at-tached to the same email.
On the Move•Please submit a short bio no more than 150 words for any-one that has joined your team in a Word document or direct-ly in an email. A headshot may also be attached to the email as a JPG.
This is for any business in the industry (Real Estate, Build-ers, Title Companies, Mort-gage Companies, etc.)
Photos/Events•Please attached pictures in JPG format in an email with any notes or captions direct-ly in the email or in a Word document.
Office: 719.217.3433Fax: 719.550.4373
www.csrej.com
Colorado Springs Real Estate Journal LLC3608 Galley Rd | Colo Springs, CO 80909
Not affiliated with The Colorado Springs Business Journal
NATION
CAMPBELL HOMES COMPANy PICNIC At Sky SOxJuLy 24, 2009
‘Second Look’ program to expand mortgage modifications
Left: Campell Homes' Cordera Sales Manager, Julie Lester with her family.
Right: Campbell Homes' Cordera Community Sales Manager Roxanne Nice with her husband Bill.
Above: Chris Casey of Campbell Homes, Jan Hausman and Jen Casey.
FHA increases finance limits for added energy efficiency
Taking a major step forward, the Fed-eral Housing Administration recently increased its limits for financing im-provements to the energy efficiency of a home.
Mortgagee Letter 2009-18 has an-nounced changes to calculating the amount an FHA-insured energy-efficient mortgage (EEM) can be increased to account for the cost of energy improve-ments.
This add-on was capped previously at $8,000, but was raised by the Housing and Economic Recovery Act (HERA), which was signed into law about a year ago.
According to ML 2009-18, the new maximum amount of the portion of an energy efficient mortgage allowed for energy improvements is now the lesser of 5% of:
The value of the property •115% of the median area price of a •single-family dwelling 150% of the Freddie Mac conform-•ing loan limit, or $625,500
Under these changes, the maximum increase in an FHA-insured mortgage for energy improvements could be as much as $31,275 in high-cost areas.
Unfortunately, resulting from er-rors in drafting HERA, the FHA was not able to fully implement all of the benefits to its EEM program that were included in the legislation. Specifically, the law intended to provide an add-on to the loan limit for EEMs defined as the greater of:
5% of the property value (up to the •area loan limit) 2% of the national maximum high-•cost limit (the national ceiling)
An incorrect cross-reference in HERA to the National Housing Act prevented the FHA from including the latter provision, which would have pro-vided higher EEM limits in lower-cost areas.
NAHB is supporting H.R. 3146 to correct this error and has learned that the FHA is planning to implement ad-ditional improvements to the EEM program that could be included in this legislation.
More guidance on the FHA’s energy-efficient mortgage program is available in Mortgagee Letter 2005-21.
The above article has been provided to you compliments of NAHB and Nation’s Builder News.
A new Second Look Program from the Mortgage Insurance Companies of America (MICA) may provide help to troubled home owners who are not able to qualify for federal assistance under the Obama Administration’s Making Home Affordable program.
Making Home Affordable, announced in March, helps home owners at risk of losing their homes to modify their mort-gages by reducing the monthly payment to more sustainable levels. MICA’s Sec-ond Look Program builds on the Admin-istration’s program by providing an addi-tional review to home owners who have been denied a modification of a loan that is not owned or guaranteed by Fannie Mae or Freddie Mac.
Lenders use a net present value (NPV) test to determine whether a non-GSE loan is eligible for a loan modification. These loans can include jumbo mort-gages, loans on investors’ balance sheets or loans that have been packaged into private-label mortgage securities.
Given how some NPV models are mathematically structured, it may ap-pear that loans that have mortgage insur-ance are better off going into foreclosure. To help offset these results, the Second Look Program allows lenders to send a claim that has been rejected under the
NPV test to a mortgage insurer who can choose to provide an advance claim pay-ment to help permit the loan to be modi-fied.
Although MICA has not provided an estimate of how many home owners it expects to help under its new program, the organization, working in conjunction with loan servicers, was able to prevent nearly 100,000 people from losing their homes in 2008.
The above article has been provided to you compliments of NAHB and Nation’s Builder News.
4 Colorado Springs Real Estate Journal www.csrej.com August 10, 2009
don’tbreak the
bankadvertising
Monthly Rates Start at $150!
on
Residential & CommercialLandscaping Services
719-538-6016www.springslandscaping.cominfo@springslandscaping.com
Lawn Maintenance Yard Clean ups Hedge and Tree Trimming Aeration and fertilization Sprinkler Maintenance and Installation Custom Landscape Design/Builds Xeriscape Water Features Retaining Walls Hauling and waste removal Snow removal Free Estimates!
We don’t mean to make your neighbors jealous
...It Just Happens
www.etcos.com
Empire Title of Colorado Springs5755 Mark Dabling Blvd. Ste 110 | Colorado Springs, CO 80919
Phone: (719) 884-5300 Fax: (719) 884-5304
Empire Title of Woodland Park509 Scott Avenue | Woodland Park, CO 80863Phone: (719) 686-9888 Fax: (719) 686-8208
Our business is growing;
Let us help you grow yours
Introducing our Escrow Team:
Even during economic hardship, Empire Title has expanded its business and staff to assist our clients. Since opening our doors in 2003, we have remained one of the top 3 Title Companies in Colorado Springs. We try to cater your needs by offering a variety of Escrow Offi cers with Experience, Expertise, & Knowledge. As a local provider, we have much to contribute to the communities in which we do business and have no intention of moving in and out of markets as economic conditions change. We are well rooted.
Rebecca has been in the Title Industry as a closer for 12 years working Commercial, Builder, Refi nance & Residential transactions. She also has experience in the commercial real estate industry as an agent assistant. Her strengths as a closer are; follow through, consistency and a positive attitude. Regardless of the situation in a transaction, Rebecca maintains an even temperament. In our current industry, it is important for the agent and/or the lender to be the focal point to help cultivate your client relations.Rebecca Gossage
Escrow Offi cer
Karen has been in the Title Industry for 9 years and in the Real Estate Industry for over 15 years. She has experience in closing Residential, Commercial, Builder and Short Sale Closings. Customer Service is Karen’s # 1 priority and she is the best at catering to all her clients needs. She believes in working as a team with the agents and lenders to get the closing done in a timely, professional manner. With the continuing changes in Real Estate, Karen is proactive in staying in front of the change.Karen Weller
Escrow Offi cer
Part 3
August 10, 2009 www.csrej.com Colorado Springs Real Estate Journal 5
NATION
SINCE 1969
SINCE 1969
FOCUSED ON OUR VISION FOR SUCCESS!
Who is Merit Company—Real Estate?•
Answer: A full service Real Estate Company celebrating 40 years of Real Estate service to Colorado Springs.
Is Merit Company primarily Property Management?•
Answer: No. Although Merit Company is the largest Property Management Company in the Pikes Peak Region, we also have four residential Sales Offices, five managing brokers and our own mortgage company. Have you ever had a Listing that wouldn’t sell? Let Merit Property Management rent it for you, and it is yours when it is time to sell again.
Why should I join Merit Company?•
Answer: The only way to sell more houses is to be in front of more people. Merit puts people in front of our Associates. Also:
“CELEBRATING 40 YEARS OF REAL ESTATE SERVICE”
RESERVE YOUR PLACE AT MERIT !For a confidential interview call Allan at (719) 598-4884
Free Merit signs•
Four prime sales offices •(You have a key to each)
Five Managing Brokers •(Open door policy)
Free long distance•
Ongoing skill development •(What value is training if you don’t have customers?)
Free copies•
Unparalled leads program •(40% of closings in 2008 were generated by the company)
In house Mortgage Company•
Office space and cubicles •available
Property Management•
legacy l title l group group group Empowering Our Associates To Make A Difference
(719) 442-1900LegacyTitle-LLC.com2 North Cascade, Suite 215
Great Tools for Realtors®
Postcard/Flyer Design & Printing• Great Lead Sources/FARM Lists• Property Profi le Books•
BIGGER DOESN’T MEANSTRONGER.
to 89.9 and is 11.6 percent above June 2008. The index in the South jumped 7.1 per-cent to 100.7 in June and is 8.9 percent higher than a year ago. In the West the index rose 2.9 percent to 100.4 but is 0.2 percent below June 2008.
NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, is hopeful that a recently elevated level of contract cancellations will ease. “Last month, Freddie Mac and Fannie Mae clarified that appraisals should be done by profes-sionals with clear local expertise,” he said. “This should mitigate the situation of many valuations done by out-of-area appraisers coming in below the price negotiated between buyers and sellers. Hopefully, in the months ahead, we’ll see an even closer relationship between contract activity and closed transactions.”
McMillan said NAR is continuing to press the appraisal issue. “We have asked Con-gress and the Federal Housing Finance Agency to immediately implement an 18-month moratorium on the new appraisal rules to further address unintended consequences of the new guidelines,” he said.
NAR’s Housing Affordability Index remains very favorable. The affordability index stood at 159.2 in June, down from record peaks in recent months but it remains 36.6 percentage points above a year ago. Under these conditions the typical family would devote 15.7 percent of gross income to mortgage principal and interest, well below the standard allowance of 25 percent.
The HAI is a broad measure of housing affordability using consistent values and as-sumptions over time, which examines the relationship between home prices, mortgage interest rates and family income.
“A monthly rise in home prices and somewhat higher mortgage interest rates led to a modest decline in affordability in June, but it was still the sixth highest index on record dating back to 1970,” Yun said. “Because housing is so affordable in today’s market, job security and the first-time buyer tax credit are bigger factors in influencing home sales.”
A median-income family, earning $60,700, could afford a home costing $289,100 in June with a 20 percent downpayment, assuming 25 percent of gross income is devoted to mortgage principal and interest. Affordability conditions for first-time buyers with the same income and small downpayments are roughly 80 percent of what a median-income family can afford. The affordable price was much higher than the median exist-ing single-family home price in June, which was $181,600.
Yun expects existing-home sales to gradually rise over the balance of the year, with conditions varying around the country. “It appears home sales are on a sounder foot-ing and inventory is gradually being absorbed.”
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries. © Copyright National Association of REAlTORS. Reprinted with permission.
McMillan
The following is a statement by National Association of Realtors® President Charles McMillan:
“NAR and our 1.2 million members are pleased that the Federal Housing Finance Agency has instructed Fannie Mae and Freddie Mac to take action to clarify confusion over the new Home Valuation Code of Conduct for home appraisers implemented this past May.
“Our members were experiencing delayed and lost sales because of poor appraisals conducted often by inexperienced appraisers who were not familiar with the area. The ramifications were so great to our members and to the housing industry that I person-ally met with the New York Attorney General’s office and with the head of the FHFA to share our concerns.
“In those meetings I shared an NAR survey that found 76 percent of our members, representing both buyers and sellers, had experienced an increase in appraisal time since the new HVCC rules were enacted. Similarly, 71 percent of Realtors® noted an increase in the use of appraisers who were not from the local area. These factors often adversely affected the sale or the sales process, which occasionally resulted in the loss of a sale or a homeowner’s inability to refinance into today’s lower rates. I expressed our serious concern in the meetings.
“We took this information, and our concerns, to those organizations responsible for the changes and we are pleased that they listened. Today Fannie Mae and Freddie Mac issued clear guidance on two very important points that we raised in our meetings. First, the guidance states that lenders should use appraisers who have clear experience in the geographic area. Second, it clarifies that appraisers are not prohibited from talk-ing to real estate agents.
“NAR has asked Congress and the FHFA to immediately implement an 18-month moratorium on the new HVCC rules to further address unintended consequences of this new rule. We will continue to push for this, but are pleased that this first step was taken today.”
© Copyright National Association of REAlTORS. Reprinted with permission.
Realtors applaud appraisal clarification as good first step
Pending Home Sales from page 1
6 Colorado Springs Real Estate Journal www.csrej.com August 10, 2009
LOCAL & STATE
CHFA awarded $45.1 million in stimulus funds Coldwell Banker Residential Brokerage’s Night at the Rockies
MOVE IN TODAY
HOMES READY NOW!!!
FOREST MEADOWSWoodmen Rd & Black Forest Rd
(719) 266-3763
FREEDOM HEIGHTSC and S Rd & Fountain Mesa Rd
(719) 382-1256
www.aspenviewhomes.net
$170’sHomes from the170
CountrysideNorth
from the
North
from the
$160’s
The U.S. Department of Housing and Urban Devel-opment and the U.S. De-partment of Treasury have awarded Colorado Hous-ing and Finance Authority (CHFA) a combined total of $45.1 million in stimulus funds which CHFA estimates will help finance the construction of 1,800 affordable rental units and create nearly 750 new jobs. The funds are part of the Tax Credit Assistance Program (TCAP) and Tax Credit Exchange Program (TCEP), both established in the American Recovery and Rein-vestment Act to ensure housing for the nation’s lowest income residents.
CHFA will award the funds in the form of loans or grants to eligible affordable housing de-velopers beginning in Aug. 2009. A complete list of eligible projects, program eligibility require-ments and application forms may be downloaded at www.chfainfo.com.
CHFA will triage developments requesting assistance to ensure the projects most prepared to move forward immediately are able to secure their assistance as soon as practical. According to the program’s guidelines, CHFA must award 75 percent of the TCAP funds by Feb. 2010, and 100 percent of the TCEP funds by Dec. 2010.
Both programs were designed to assist devel-opers participating in the Low Income Housing Tax Credit program, which has been negatively impacted from the overall economic decline. Originally created by Congress in 1986, the Low
Income Housing Tax Credit program is consid-ered one of the most successful affordable hous-ing programs in the country, generating equity to support nearly 1.7 million affordable rental hous-ing units nationwide and almost 37,000 units in Colo. The average in-state Low Income Hous-ing Tax Credit development serves households earning 33 percent Area Median Income (AMI), which for a family of four equates to approximate-ly $21,540 annually in the Denver Metro area, or $16,500 annually in Western Colorado.
The Low Income Housing Tax Credit program has struggled over the last two years, as fewer in-vestors are in need of tax credits to mitigate feder-al tax liabilities and developers who were expect-ing to earn $0.85 cents for each $1 tax credit sold are now earning $0.70 or less.
CHFA Director of Commercial Lending, Jaime Gomez said, "The sharp decline in equity pricing has created significant gaps for developers recently awarded the credits; putting completion of their housing projects at risk. Funding from the stimulus bill is intended to restore financial feasi-bility to these projects resulting in much needed housing for the state’s residents, along with cre-ating new jobs generated from the construction and management of the units."
For more information about Tax Credit Assistant Program (TCAP) or the low Income Housing Tax Credit program, visit www.chfainfo.com or call CHFA’s Denver office at 1.800.877.2432, ext. 429 or West Slope office at 970.241.2341.
• CHFA will award the funds in the form of loans or grants to eligible affordable housing developers beginning this month. Coldwell Banker Residential Brokerage’s annual Night at the
Rockies client appreciation event was an overwhelming success with a total of 9,300 clients, friends and broker associates in attendance. The huge Coldwell Banker Residential Brokerage contingent enjoyed watching the Colorado Rockies take on the Arizona Diamondbacks at Coors Field during the July 20th event. It was the third consecu-tive year that Coldwell Banker Residential Brokerage hosted the sin-gle largest company attendance during a Colorado Rockies baseball game.
Special recognition was given to broker associates Chuck and Rhonda Gadway of Coldwell Banker Residential Brokerage’s North Metro office, and broker associate Justin Knoll of the com-pany’s Denver Central office, who hosted more than 340 and 275 guests, respectively, at the special client appreciation night. Todd Moir, director of marketing for Coldwell Banker Residential Broker-age in Colorado, was also recognized for his efforts in organizing the annual Night at the Rockies. A “homerun salute” was given over the field’s jumbo-tron scoreboard to each Coldwell Banker Residential Brokerage office represented at the event. The local musical group Face sang the national anthem.
“The Night at the Rockies and other client appreciation events are about building relationships with clients and their families,” said Chuck Gadway. “The event allows us to focus on the customer and it shows them that we genuinely value them as friends and clients.”
“The Night at the Rockies creates synergy,” said Knoll. “The social networking was exceptional from our initial phone calls prior to the event to the final pitch at Coors Field. Our business has expanded considerably over the years thanks to these types of events, and we always get several listings as a result of Night at the Rockies.”
The annual client appreciation Night at the Rockies is part of the Coldwell Banker Residential Brokerage Agent Value Package (AVP), the only program of its kind in the real estate business. The AVP in-cludes a wealth of high profile marketing mailers promoting special giveaways and numerous events that reward both agents and their clients.
Effective July 1st, 2009Lawyers Title Company will begin a partnership with
Heritage Title Company and be known as:
Visit our new website at www.heritagetco.comto discover the many ways we can partner in your success.
www.heritagetco.com
104 S. Cascade Ave., Suite #102Colorado Springs, CO 80903
ph 719.475.8800 fx 719.471.3413
Effective July 1st, 2009Lawyers Title Company will begin a partnership with
Heritage Title Company and be known as:
Visit our new website at www.heritagetco.comto discover the many ways we can partner in your success.
www.heritagetco.com
104 S. Cascade Ave., Suite #102Colorado Springs, CO 80903
ph 719.475.8800 fx 719.471.3413
August 10, 2009 www.csrej.com Colorado Springs Real Estate Journal 7
LOCAL & STATE
Former Managing Broker returns to full-time sales
Contract issues gain attention and some solutions
got
let usnews?
Is this your Managing
Broker?
Not asRESPONSIVEas you like?
Re-Launch your Career with Colorado Springs’ #1 New Home Sales Team!
Sometimes the grass is Greener on the other side!
CALL TODAY 719-550-4277
And set up your 100% Confi dential
interview!
www.CoNewHome.com
No desk fees! • No copy fees!• Free e-contracts! • Extensive hands-on training! • Ride-with programs!• Specializing in new construction! • Earn those big new home • commissions and bonuses!Company provided leads! •
21 ▫ st century marketing program! 3 mall kiosks! ▫Extensive internet lead generation ▫
On call management team to answer • any question! Easiest, safest, and cheapest way • to re-start your career!
Foreclosure Protection Act, Contract Section 30
At their July meeting, the Colorado Real Estate Commission directed the Forms Committee to prepare forms to provide to licensees that allow them to sell properties where the act applies. On July 22nd, at an emergency rule mak-ing hearing, the Commission approved those forms for our use. The new forms are;
Contract to Buy and Sell Real Estate (Colorado Foreclosure •Protection Act)(CBSF1-7-09)•Inspection Notice (Colorado Foreclosure Protection Act)•Notice of Cancellation (Colorado Foreclosure Protection Act)•Seller Warning (Colorado Foreclosure Protection Act)•Counterproposal (Colorado Foreclosure Protection Act)•Agreement to Amend/Extend (Colorado Foreclosure •Protection Act)
These forms are now on the Commission website for use by Real Estate licensees. These new forms will allow us to write a contract when working with an investor
(when the act applies). The remaining issue is determining when the act actually applies. Talk with your Employing Broker and watch for classes on this topic.
Carbon Monoxide Section 10.8
Lots of questions have come up on this issue. The problem we face is the act states, 38-45-102. Carbon monoxide alarms in sin-
gle-family dwelling – rules. (1) (a) Notwithstanding any other provision of law, the seller of each existing single family dwelling offered for sale or transfer on or after July 1, 2009, that has a fuel-fired heater or appliance, a fireplace, or an attached garage shall assure that an op-erational carbon monoxide alarm is installed within fifteen feet of the entrance to each room lawfully used for sleeping purposes or in a location as specified in any building code adopted by the state or any local govern-ment entity.
Our problem is that the act says the seller assures that an operational carbon monoxide alarm is in place when offered for sale. We need to state that to
the seller. What we should not do is to indicate that anything else is acceptable. Some Realtors have said they are going to give the buyer an alarm at closing. Some have said to make it an inspection item. While we need to use common sense in this issue, we must be very careful not to indicate in any way to a seller that it is acceptable to do anything but just what the law says and that is that the seller shall assure that it is in place while offering the property for sale. Again, talk with your Employing Broker. If you are the Em-ploying Broker, talk with your E&O attorney.
The Form of Funds, Time of Payment, Funds Available Section 43
This section of the Contract to Buy and Sell re-mains unchanged at this time. This section will like-ly have some changes the next time that the CBS1 has other changes, which may be January 2010.
Paul Goldenbogen holds a Certified Residential Broker (CRB) designa-tion from the National Association of Realtors and a Graduate Realtor Institute designation (GRI) from the Colorado Association of Realtors. Paul is Employing Broker of Keller Williams, Partners Realty in Colo-rado Springs, a large full service real estate company.
By Paul goldenbogenKeller Williams Partners—
Ron Gate, former managing broker for Coldwell Banker Residential Brokerage in Colorado Springs, has returned to full-time real estate sales after serving in his management position for more than a year. Gate has been a licensed real estate professional since 1968 and has also served as a managing broker for Coldwell Bank-er Residential Brokerage in California.
Gate is a former Manager of the Year with Merrill Lynch Real Estate Division and Prudential Real Estate. He is a Certified EcoBroker, a Certified Negotiation Specialist and holds the Graduate Real-tor Institute designation recognizing the successful completion of stringent con-tinuing education courses in real estate.
“It has been very rewarding to serve as managing broker for Coldwell Banker Residential Brokerage the past year and a half, but I am now looking forward to returning to full-time real estate sales,” said Gate. “I am currently serv-ing the diverse real estate needs of clients throughout the greater Colorado Springs area, including Fountain, Manitou Springs, Monument, Palmer Lake, Woodland Park and other southern Colorado cities. Coldwell Banker Residential Brokerage is the very best name in real estate worldwide and I’m happy to return to full-time sales with this highly respected company.”
Gate is a member of the Pikes Peak Association of Realtors and Metrolist. He holds an associates degree from Fullerton City College and also attended Califor-nia State University, Fullerton. Gate is active with the Make-A-Wish Foundation and is an avid golfer.
Gate
8 Colorado Springs Real Estate Journal www.csrej.com August 10, 2009
Stability, Integrity, Professionalism.
“I was lucky enough to be brought up in a military family, so I had the opportunity to see the world and meet a lot of new people. I bought and flipped my first property at age 21 earning 1100% ROI, and that was the beginning of my love affair with real estate! Several successful flips later in Florida, California and Colorado, I obtained my license and haven’t looked back. I especially enjoy working as a buyer’s agent, closing an average of 50 homes per year. My favorites are first-time homebuyers; I still remember how happy I was after my first purchase, and enjoy being a part of that experience for others. Most recently active in Florida as a Sales Associate for builder DR Horton, I’m now back in the resilient Colorado Springs market and joining Heritage Realty as they endeavor to become the leader for top-producing agents desiring all the benefits and support of a modern, technologically advanced brokerage.”
“I have been with Heritage Realty for about 10 years. The reason that I have been here so long is because Heritage Realty has always had a good name and an excellent working relationship with clients and staff. I have been in real estate for 30 years and enjoy making people happy by finding that “just right” home for them.”
Cathy Davidson(719) 351-0206
Mary Hagen(719) 291-5467
Why Heritage Realty?
ASK FOR ROCKY MANNING
Heritage Realty is dedicated to providing our Realtors the finest basic services at the lowest cost to maximize their income and freedom, allowing us to prosper as a business for the benefit of our Realtors, employees, clients, and customers.
We are 100% local and not a franchise.
(719) 548-0400 | www.heritagecsp.com
Call us today!
5265 N. Academy Blvd., Ste 3300Colorado Springs, CO 80918
100% Commission$100mo.*
* does not include hard costs or private office.
VANguARD HOMES REALtOR BRuNCHJuLy 28, 2009
Above: Virginia Zenner with The Signature CO, Ann Brown and tammy Hauck with Land Title and Arleyne glasser with Bank of America.
Above: Marlene Weaver with Avalar Real Estate Solutions, glenda Miller with Keller Williams Partners, Jon Paukovich and Diane Danner with Ent.
Right: JoAnne and John LaSage with Salzman Real Estate Services, LTD.
Right: Bob Magas with The Signature CO.
Left: Craig Clum with The Signature CO.
August 10, 2009 www.csrej.com Colorado Springs Real Estate Journal 9
ON ThE MOvE
Rhonda BlainMerit Real Estate
Rhonda Blain has joined Merit Real Estate, southern Colorado’s oldest full service Real Estate Company. Rhonda will be the Managing Broker in the Merit West Office at 1150 Elkton Drive, Colorado Springs. Rhonda holds management responsibilities which include over-seeing management of the office and recruiting, moti-vating and training of agents.
Rhonda has over 12 years experience in the real estate industry and comes from a family that has been in the real estate industry since the late 1970s. She had her own real estate company in Texas and has closed many trans-actions and has had oversight on hundreds more. She believes that buying or selling a home involves making decisions that are the most important investment deci-sions clients will ever make. Clients are #1 with her.
When Rhonda is not working, she enjoys networking and spending time with family.
terry LopezMerit Real Estate
Terry Lopez has joined Merit Real Estate, southern Colorado’s oldest Independent Real Estate Company. Terry will be a Broker Associate at the Merit East Office, 6120 Tutt Blvd., Colorado Springs.
Terry is a second generation realtor and loves help-ing people realize their dreams of homeownership. Her clients appreciate her willingness to “go the extra mile” from beginning negotiations to closing. Terry has 13 years experience in residential sales and has been a top relocation agent.
Terry enjoys volunteering her time and talents. In ad-dition to being involved at church she also volunteers for Crisis Pregnancy Center and the Salvation Army. In her spare time she enjoys knitting hats for newborns that are donated to local hospitals.
Terry is married with three children.
Charlie & Nancy SheaC.R. Shea Homes
Charlie and Nancy Shea of C.R. Shea Homes, Inc. recently completed the “Certified Green Professional” training course developed by the National Association of Homebuilders (NAHB).
C.R. Shea Homes has been proactive for years discov-ering and implementing energy conservation practices and prudent resource utilization in the homes they are privileged to build.
Their new CGP designation will help keep them on the leading edge of Green Building as they prepare for the next building cycle. For more info go to www.crshea.com
New team MembersLand Title Guarantee Company
Dixie Powers has joined Land Title Guarantee Company as a senior com-mercial escrow officer. She has more than 30 years’ experience in title insur-ance and escrow. Dixie is experienced in all areas of commercial settlement, including defeasance, 1031 tax-deferred exchanges, multi state and SBA transac-tions. She is a member of RCIS. A native of Indiana, Dixie earned her Bachelor of Science degree at Ball State University.
Don Whitmore joined Land Title
Guarantee Company as chief title officer, with respon-sibilities including high liability underwriting, commer-cial transaction consulting and escrow/underwriting coordination. His title insurance career spans 32 years, during which time he has handled transactions through-out the US. Don designed and implemented training programs in title insurance examination and participates in ongoing training programs for clients and internal staff. He is a graduate of the University of Colorado at Boulder.
Craig Parker, who has 12 years’ expe-rience in all facets of title insurance and escrow, has joined Land Title Guaran-tee Company to handle residential and commercial escrow transactions. His first eight years in the industry were in Kansas with an independent insurer, where he gained particular expertise in agricultural transactions in addi-tion to residential and commercial set-tlement experience. Craig is a member of RCIS and attended Hutchison Com-munity College.
Sara Martin has joined Land Title Guarantee Company as a sales represen-
tative. Her 29 year background in the industry includes sales and training experience as well as commercial and residential escrow work in local/national transactions and title research. She is a member of RCIS, and has served on many Realtor committees and boards. A long-time Colorado resident, Sara received her BA degree at Colorado Women’s College in Denver.
Ent.com
Ent is a community-chartered credit union • Equal Opportunity Lender • Federally insured by NCUA © Ent Federal Credit Union, 2009 • Ent is a registered trademark of Ent Federal Credit Union.
FREEDOM IShaving a partner you can trust.
Tom Bechtel(719) 550-6486
Marcus Brown(719) 550-6408
Josh Callens (Denver)(720) 833-3324
Diane Danner(719) 550-6441
Tony Sloan(719) 550-6439
Suzi Gradisar (Pueblo)(719) 296-2107
Brad Shaw(719) 550-6995
Lisa Shoblo(719) 550-6480
ENT - A REALTOR’S LENDING PARTNERAs a realtor, it’s important to help your buyers �nd the home they’re most comfortable in. At Ent, we’re here to make it easy for them to �nd the �nancing they’re comfortable with! Ent o�ers a wide variety of mortgage loan options* to �t any homebuyer. Plus, all of Ent’s loan decisions are made locally and we service most loans in house. Ask about our $300 Mortgage Guarantee, too!
For more information, call one of our Mortgage Loan O�cers or visit Ent.com/Mortgage
*Standard credit quali�cations apply. Loans are subject to �nal credit approval. Property insurance is required. Financing available on homes throughout Colorado.
Alex Deboer(719) 550-6482
Stephanie Dombrowski(719) 550-6485
Carol Flynn(719) 550-6470
Cathy Gonzalez(719) 550-6431
Realtornewoffice?in the
Let us know!See Page 3 for details
Powers
Whitmore
Parker
Martin
10 Colorado Springs Real Estate Journal www.csrej.com August 10, 2009
share your expertise.
Email: [email protected]
LOCAL EXPERT
Direct: (719) 785-7109
Cell: (719) 930-9530
Direct: (719) 785-7110
Cell: (719) 229-5003
Building Lifelong Relationships Through an Environment ofPersonal Integrity and Professional Excellence
One South Nevada Avenue, Suite 230 . Colorado Springs, CO 80903 . CentralBancorp.com
Wally RoyLoan Advisor
Sharon RegierBusiness Development
CB-0160 RealEstateJournal Ad-V3:Layout 1 7/16/09 11:54 AM Page 1
Open daily 10 am to 6 pm, except Sunday and Monday, 12 pm to 6 pm.
DRHortonColorado.com
Homebuyers Wanted!With a great central location, affordable pricing from $230’s and immediate availability, Claremont Ranch makes so much sense for new homebuyers!
*Prices, included features, availability and delivery dates are subject to change without notice or obligation. Square footages are approximate. Exterior elevations are an artists conception and may vary from elevation built. Buyers are not required to finance through DHI Mortgage as a condition of purchase or access to settlement services, however, incentives described above are only available by financing and closing through DHI Mortgage. Terms and conditions subject to credit approval, market changes and availability ©2009 DR Horton
Visit Claremont Ranch by taking I-25 to Constitution, exit east to Marksheffel, south to Colorado Tech, north on Velliguette or call 719.591.0233 today!
• 5 minutes from Peterson and Shriever AFB• 15 minutes from Ft. Carson Army Base• Military and Government employee discount incentives!• First-time buyers may qualify for $8000 tax credit
In a delayed exchange trans-action structured to satisfy the requirements of §1031, an exchanger has up to 180 calendar days to acquire like-kind replacement property measured from the day the relinquished property is sold. Once initiated, the delayed exchange may be successfully completed (resulting in complete tax de-ferral), partially completed (resulting in
recognition of some capi-tal gain) or it may fail if no like-kind replacement property is acquired (re-sulting in the recognition of all capital gain gener-ated by the sale). If the ex-change begins in one tax year and extends into the subsequent tax year, the
question arises whether the gain real-ized on the sale is recognized in the year
in which the relinquished property was sold or in the subsequent year in which the exchanger received the cash sale proceeds from the qualified intermedi-ary. In a perfect world, gain would be recognized in the subsequent year when the proceeds were actually received by the exchanger. In many cases, this turns out to be wholly or partially true.
The Regulations under §1031 treat a tax deferred exchange as an installment sale to the extent that the exchanger re-ceives cash or other non-like-kind prop-erty (known as “boot”) in a subsequent tax year. See Treas. Reg §1.1031(k)-1(j)(2). This can happen if the exchanger buys replacement property with a value lower than the relinquished property, obtains excess financing in connection with the purchase of replacement prop-erty or fails to acquire any replacement property leaving cash boot in the hands of the qualified intermediary. In all cas-es, the cash received from the qualified intermediary at the end of the exchange is treated as a payment in the year it is actually received by the exchanger for purposes of the §453 installment sale reporting rules rather than in the year the relinquished property was sold. On the other hand, any mortgage debt that is paid off on the sale of the relinquished property is treated as a payment in the year of the sale to the extent the ex-changer does not incur an offsetting li-ability in its acquisition of replacement property. Nevertheless, the tax deferral afforded by the coordination of §1031 and the installment reporting rules un-der §453 can produce a significant ad-vantage where gain must be recognized as the result of a wholly or partially failed exchange; sort of a heads I win, tails you lose tax benefit in favor of the exchanger.
An illustration straddling 2009/2010 tax years
For example, suppose an exchanger initiates a tax deferred exchange with a qualified intermediary by transferring investment property worth $900,000 with no mortgage debt. Pursuant to a valid exchange agreement, the exchang-er's qualified intermediary completes the relinquished property sale on July 28, 2009. On January 5, 2010, the quali-fied intermediary acquires a like-kind replacement property with a fair mar-ket value of $600,000 and transfers the replacement property to the exchanger together with the remaining $300,000
in cash boot. In this example, the ex-changer has completed a partial §1031 exchange and will recognize gain to the extent of the $300,000 payment re-ceived at the end of the exchange. Un-der the installment sale reporting rules, gain is recognized in the year of the pay-ment, 2010. Consequently, the capital gain is reported on the exchanger's tax return for 2010 (filed in 2011) and not on the 2009 return for the year in which the gain was realized.
Bona fide intent
Despite the tax deferral opportunity discussed above, an exchanger should not engage a qualified intermediary for the principal purpose of deferring tax under §453. In the case of a delayed ex-change, §1031 is inapplicable unless the exchanger has a “bona fide intent” to complete the exchange. An exchanger has a bona fide intent if, based upon all the fact and circumstances at the begin-ning of the exchange, it is reasonable to believe that like-kind replacement property will be acquired during the ex-change period. The exchanger's intent, however, need not be pure and there is no requirement that the exchange be wholly or partially successful. For ex-ample, in Smalley v. Commissioner 116 TC 29, 2001, a case involving a failed exchange that straddled two tax years, the Tax Court upheld the IRS’s deter-mination that the replacement property acquired by the exchanger was not like-kind. On that basis, the IRS argued that the exchanger’s gain on the sale of the relinquished property should be rec-ognized in the year of the sale. The Tax Court held, however, that the exchanger was entitled to installment sale treat-ment because he engaged in the transac-tion with the requisite intent notwith-standing his failure to acquire like-kind property. In this case, the exchanger's bona fide intent made the difference, at least as to the deferral afforded under §453.
An investor contemplating an ex-change in which there may be some cash boot should review their situation with competent tax and/or legal advisors.
For more information on §1031 tax deferred exchanges, call 1-800-282-1031 or email: [email protected]. This information is not intended to replace qualified legal and/or tax advisors. Every taxpayer should review their specific transaction with their own legal and/or tax counsel. © 2008 Asset Preservation, Inc. All rights reserved.
By kennen CohanAsset Preservation Inc.—
To defer or postpone, that is the question “Exchange over two tax years may be treated as an installment sale”
August 10, 2009 www.csrej.com Colorado Springs Real Estate Journal 11
AROuNd ThE CORNER
AugustWednesday, August 12Hard Hat Tour at Flying Horse8:45am @ Empire Title 719-884-5300 | [email protected]
NAHREP Luncheon11:30am @ East Librarywww.nahrepcos.org
Concert: Redraw the Farm6pm @ Wolf Ranch Gateway Parkwww.wolf-ranch.com
Jazz in the Park 6pm @ Cordera Grand Lawn719-260-7477 [email protected]
Thursday, August 131031 Exchanges Class9am @ 1277 Kelly Jounson Blvd #101719-268-2452 | [email protected]
WCR Luncheon11am @ Embassy [email protected]
Wednesday, August 19The Estimator9am @ Empire Title 719-884-5300 | [email protected]
Short Sale Class9am @ 1277 Kelly Jounson Blvd #101719-268-2452 | [email protected]
Thursday, August 20Annual Commission Update8:30am @ Empire Title 719-884-5300 | [email protected]
Wednesday, August 26Concert: Days Gone By6pm @ Wolf Ranch Gateway Parkwww.wolf-ranch.com
septemberWednesday, September 2“A Day With FHA” - 7.5 CE8am @ Crown Plaza [email protected] - Must Registerhttp://www.hud.gov/emarc/index.cfm?fuseaction=emar.registerEvent&eventId=158&update=N
Parade of Homes Awards Banquet5:30pm @ USOC719-592-1800 | [email protected]
Wednesday, September 9Basic Mold Info for Realtors9am @ CB Title719-228-1143 [email protected]
Thursday, September 10Advanced 1031 Class9am @ 1277 Kelly Jounson Blvd #101719-268-2452 | [email protected]
Wednesday, September 16HBA Chili Wing Ding Brew Fest719-592-1800 | [email protected]
Wednesday, September 23Mandatory Update Class9am @ 1277 Kelly Jounson Blvd #101719-268-2452 | [email protected]
Saturday, September 26HBA Rally Ride & Poker RunDetails Coming Soon719-592-1800 | [email protected]
NovemberWednesday, November 11Impact of Meth When Selling9am @ CB Title719-228-1143 [email protected]
turn
call
for details
friends
rachelle
719.205.1299
cash!your
into
send
eventus your
Pikes Peak Region Real Estate Industry Talent Show/ Battle of the BandsI know we have lots of musical talent in our industry (including a former Metallica band member, an Elvis impersonator and a stand up comedian) and I'm SURE we have oodles of other hidden talents to awe and amaze our cohorts.
If you have an unusual natural ability to share (or if you are willing to snitch on someone you know) please contact Carla Starkie with Stewart Title of Colorado, right away at 393-3532 or [email protected]
We're looking at a couple of dates in November for the show.
Interested in sponsoring the event? Contact Michele Van Metre with PPAR at 633-7718 x 114
refreshrestructure
respondWe're listening to your requests
and change is coming.
Stay tuned.
