Off the Radar

Contrary to the news yesterday regarding resurrecting the first time home buyer credit, the White House said that there is no serious talk of reinstating the homebuyer tax credit.

The Obama Administration is rolling out a new FHA refinancing program targeted at underwater borrowers, the Keep Your Home California Program, and of course the Unemployment Loan Program.

Feel free to look through the FHA refinancing program, the one qualification that jumps out at me is that the loan to value of your home has to be 115%.  I’m not sure if this helps homeowners in other parts of the US.  For San Diego real estate, this likely won’t do anything unless you can first do the Keep Your Home California program and get the full 100K  and then depending on how much you owe versus how much your home is worth, you can get an FHA refinance.

Something else that worries me is that the lender participation is not compulsory and there doesn’t seem to be an incentive for the banks to make this program work.

New programs keep rolling out but starting these programs and departments appear to be difficult for some due to the amount of reorganization that it entails.

The administration is also watching the numbers carefully to see how much they will change now that the first timehomebuyer credit is gone.

So we don’t know if this strategy is coming back into play or not.

According to Deutsche Bank there may be as many as 20 million homeowners underwater by 2011 assuming that there is a 10% decline in prices.

Will these programs help?

We’ll have to see, although I have a hunch that the first time homebuyer credit may ultimately need to be resurrected.

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