Real Estate News and Commentary

May 18, 2010October 5, 2019

Home buyer incentives in post tax credit era

Did you miss the first time home buyer tax credit?

by Dan Krell © 2010

So, you want to buy a home but you’re disappointed that you missed out on the first time home buyer tax credit. Don’t worry, what I’m about to tell you about available down payment and closing cost assistance programs may be enlightening. In some cases, the total down payment and/or closing cost assistance you obtain from all sources may exceed the $8,000 offered as the first time home buyer tax credit.

Although some of these programs sound too good to be true, they’re not meant to be kept secret. In fact, they are meant to assist as many first time home buyers as possible. Sources that offer first time home buyer assistance programs include mortgage lenders, local home ownership programs; and governmental sources.

Did you know that some mortgage lenders are offering first time home buyer assistance programs? Of course, lenders want your business; but as an incentive, they are offering first time home buyer downpayment and closing cost programs. One such program is extended through the Federal Home Loan Bank of Atlanta (fhlbatl.com). Local affiliated lenders offer FHLB’s first time home buyer program by providing matching funds up to $7,500 for down-payment and closing-cost assistance to low- and moderate-income homebuyers. FHLB should be contacted for availability, guidelines, as well as local affiliates participating in their program.

Locally, the Housing Opportunities Commission (hocmc.org) administers Montgomery County’s home ownership program. Besides making available special rates for an FHA mortgage, the HOC offers the “5 for 5” program; which extends down payment and closing cost assistance as a ten year second mortgage. The program provides the home buyer up to 5% of the purchase price (up to $10,000) at a 5% interest rate.

Maryland’s home buyer program, the Maryland Mortgage Program (mmprogram.net), is administered through the Maryland Department of Housing and Community Development. The MMP is actually comprised of three programs. Besides making available the widely used CDA mortgage program, which offers low interest rate mortgages, the MMP also provides a down payment and closing cost program as well as partner matching contribution programs.

In addition to the Downpayment and Settlement Expense Loan Program (DSELP), which is a 0% interest loan up to $3,500, the MMP also includes partner match programs (The “Builder/developer Incentive,” the “House Keys 4 Employees” and the “Community Partner Incentive Program ”) that will match contributions up to $5,000. The matching contribution is a deferred loan to be repaid at 0% interest and is provided in addition to any DSELP funds.

Although the home buyer tax credit is now history, other opportunities exist for down payment and closing cost assistance. In addition to the programs mentioned above, you should remember to have your real estate agent negotiate a seller closing cost contribution ; most mortgages allow for up to a 3% seller contribution. However, you should check with your lender to see if such a contribution is allowed or if there are other limitations.

As you would imagine, taking part in lender and governmental programs require you to meet specific guidelines that typically include (but not limited to) the use of participating lenders, attending home ownership counseling, and meeting income requirements. For more information about these programs and qualifying requirements, you should contact their corresponding offices as program funding can be limited as well as subject to change without notice.

This article is not intended to provide nor should it be relied upon for legal and financial advice. This article was originally published in the Montgomery County Sentinel the week of May 17, 2010. Using this article without permission is a violation of copyright laws. Copyright © 2010 Dan Krell.

May 14, 2010May 24, 2014

Notable Homes – Bethesda, MD

What do Edward R Murrow, Close Encounters of the Third Kind, and a Bethesda Mansion have in common? …Howard K. Smith

Howard K. Smith, for those of you who don’t know, was one of the original “Murrow Boys,” as well as being a famous journalist, commentator, and later- a movie actor. As one of the original Murrow Boys, Mr. Smith was one of the journalists who were closely associated with Edward R. Murrow at CBS during the years prior to and during World War II. As an associate of Murrow, Smith covered Pre-war Europe and Pearl Harbor. He later moved to commentator and anchor, most notably when he made a move to ABC. Besides having cameos on various TV shows, Smith also had roles in several films, most notably The Candidate, Close Encounters of the Third Kind, and The Best Little Whorehouse in Texas (http://en.wikipedia.org/wiki/Howard_K._Smith).

The Smith’s lived on this remarkable estate from 1958 until his death in 2002. The estate has fantastic spaces inside and out and is situated on over four acres of plush greenery overlooking the Potomac River.

Information is believed to be accurate, but should not be relied upon without verification. This article is not intended to provide nor should it be relied upon for legal and financial advice. Using this article without permission is a violation of copyright laws. Copyright © 2010 Dan Krell.

May 11, 2010October 5, 2019

Foreclosure mediation

The 2010 regular session of the Maryland Legislature passed measures to assist and clarify issues regarding foreclosure. In addition to legislation that adds procedures to protect renters who live in homes in foreclosure, and clarifying that an individual must exercise the “power of sale” stated in a deed of trust – the requirement to provide a home owner the opportunity for mediation prior to a foreclosure sale will take effect July 1st, 2010.

Maryland H.B. 472: “Residential Property Foreclosure Procedures – Foreclosure Mediation” was the outcome of Governor O’Malley’s workgroup to explore the option of implementing a foreclosure mediation program to assist home owners stay in their homes while attempting to reduce the number of Maryland foreclosures. The bill was passed and recently signed into law.

The new law establishes additional rules for foreclosure filings as well as requirements to exhaust efforts assisting the home owner to retain their home, including mediation. As of July 1st, the new law requires any lender filing a notice of intent to foreclose (NOI), to provide the home owner an opportunity for loss mitigation (including mediation), as well as including additional foreclosure information.

To comply with the law, the NOI must either be accompanied by a preliminary or final affidavit for loss mitigation. The lender’s NOI will now include a statement recommending housing counseling; information on governmental foreclosure assistance; and an explanation of the Maryland foreclosure process (including time lines). Additionally, the NOI will be accompanied by a loss mitigation application; instructions for completing the loss mitigation application; a telephone number to call to confirm receipt of the application; a description of the eligibility requirements for the lender’s loss mitigation programs that may be applicable; and a preprinted envelope indicating the address of the person responsible for conducting loss mitigation on the lender’s behalf. Fees that are collected for the NOI will assist in funding mediation, housing counseling, and other foreclosure resources.

If the home in foreclosure is owner occupied, then the home owner can file a petition for mediation before the foreclosure sale date is scheduled. The request for mediation must be made within fifteen days of service or mailing of the final loss mitigation affidavit. The mediation will be conducted by the Office of Administrative Hearings (OAH), which has sixty days to schedule the mediation; the OAH has authority to extend mediation by no more than thirty days if needed. The OAH must report the outcome of the mediation either when the sixty days expires or after the expiration of any extension period that is granted. If no agreement is reached during mediation, the lender may schedule a sale date (which can be as early as fifteen days after the mediation hearing).

If mediation is requested by the home owner, the lender must be engaged in the process. The lender’s representatives who are present in mediation must have the authority to settle the matter or be able to readily contact someone who can. The home owner, when entering into mediation, may be accompanied by a housing counselor and/or an attorney.

Information regarding the new Maryland foreclosure mediation law will be available to home owners through approved housing counselors as well as the MDHope Hotline (1-877-462-7555). Additional assistance and additional foreclosure resources are available from the Maryland Office of the Commissioner of Financial Regulation (www.dllr.state.md.us/finance/consumers/mortforeinfo.shtml).

This article is not intended to provide nor should it be relied upon for legal and financial advice. This article was originally published in the Montgomery County Sentinel the week of May 10, 2010. Using this article without permission is a violation of copyright laws. Copyright © 2010 Dan Krell

May 7, 2010October 5, 2019

With all due respect, Mr. Trump…

Dear Mr. Trump,

I enjoy watching your interviews and often listen intently to what you have to say. And although, you’ll have to forgive me because I do not follow your hit TV show, “The Apprentice,” I always find your appearances entertaining and sometimes educational. I even caught your recent interview by Joan Rivers (on her TV Land show, “How’d You Get So Rich?”); I’m always intrigued about real estate.

Of course, I can appreciate the point you made during the interview (which is the point you have been making for some time now) – it is a great time to buy real estate.

Mr. Trump, you do have a magic touch, there’s no doubt. So, naturally you caught my attention when you disclosed on national TV that your company purchased land along the Potomac River (mentioning a golf course). So of course, I wondered if the project was in MD, DC, or VA.

Lo and behold- I found that the public records indeed indicated that there was a purchase by your company. What a beautiful piece of land. There is a golf club, of course, and it is right on the on the Potomac River… in Sterling, VA!?

…Really?

With all due respect, Mr. Trump, if you want the opportunity to buy some great real estate and make some deals- why not here in Maryland? After all, there are plenty of deals and development opportunities– some even along the Potomac River, just minutes from DC!

So, Mr. Trump…I’m waiting for your call to see if we can do business (my contact information is on my website: www.dankrell.com). However, if it turns out we can’t- it’s all good! I’ll just catch your next interview.

All the best…

May 4, 2010October 5, 2019

Ethics, Wall Street, and Real Estate

Watching the recent Congressional hearings on the financial crisis makes you wonder about ethical leadership in Corporate America. The hearings can be characterized by Senator Carl Levin (D- MI) trying to explain to a seemingly confounded Goldman Sachs CEO Lloyd Blankfein about an alleged conflict of interest. Senator Levin made a salient point when he said, “…you want people to trust you…I wouldn’t trust you…”

My purpose is not to pass judgment on anyone; however, I feel there is a parallel to real estate practice. These hearings remind me why the National Association of Realtors has maintained a code of ethics since 1913 (Realtor.org). Much like security traders who take their code of ethics seriously, as well as Goldman employees (yes, Goldman posts their code of ethics that on their website under corporate governance); Realtors comply with the NAR code of ethics communicates to ensure there is integrity in all dealings.

Unfortunately, having a code of ethics does not guarantee that all members adhere to it; adherence is up to individuals and enforcement is based on the general milieu. Fortunately, in some states such as Maryland, aspects of the NAR code of ethics are incorporated into the real estate licensing law protecting consumers from rogue agents.

The preamble to the NAR code of ethics states, “In recognition and appreciation of their obligations to clients, customers, the public, and each other…” So, if you’re involved in a transaction with a Realtor, you can expect ethical conduct that includes (but not limited to) honesty, disclosure, commitment, and truthful communication.

Article 1 of the NAR code of ethics states that even though a Realtor’s “primary interest is to promote and protect the interests of their client”, they are obligated to treat all parties in the transaction honestly. An example that is given by the NAR is to present a client’s ability to purchase honestly even when they have issues that may interfere with a home purchase (such as credit issues). Another example is that a seller should not be mislead in an attempt to obtain a listing (standard of practice 1-3).

Article 2 indicates that Realtors are obligated to disclose any material facts they know of without exaggeration or misrepresentation. For example, a Realtor must disclose all property condition facts they are aware of, as well as a true picture of the nature of the problems if known.

Article 11 states that Realtors are committed to provide professional services for which they are trained and to ask assistance in situations where they lack training, while disclosing that fact. If the transaction exceeds a Realtor’s competence, the agent must seek competent assistance and disclose that fact to their client.

And finally, article 12 states that Realtors are required to be truthful in all communications including advertising. Besides identifying themselves as real estate professionals, Realtors are obligated to accurately depict all information communicated to the public. A contemporary example is the use of photo editing software- room photos should not be distorted such that rooms appear larger.

The point that is brought home is that ethics and business (including real estate) are not diametrically opposed, but rather coincide with each other. Ethics is not only good business, but as Senator Levin pointed out, it’s ultimately a matter of trust.

This article is not intended to provide nor should it be relied upon for legal and financial advice. This article was originally published in the Montgomery County Sentinel the week of May 3, 2010. Using this article without permission is a violation of copyright laws. Copyright © 2010 Dan Krell