December 2009:

Housing market showing signs of improvement.

The National Association of Realtors (NAR) reports that pending home sales have risen for nine months in a row in 2009. Lawrence Yun, NAR chief economist, said home sales are experiencing a pendulum swing. "Keep in mind that housing had been underperforming over most of the past year. Based on the demographics of our growing poopulation, existing-home sales should be in the range of 5.5 million to 6.0 million annually, but we were well below the 5-million mark before the home buyer tax credit stimulus," he said. "This means the tax credit is helping unleash a pent-up demand from a large pool of financially qualified renters, much more than borrowing sales from the future."

First-time home buyer tax credit extended and expanded.

The U.S. Congress and administration recently extended the popular and successful $8,000 first-time home buyers tax credit through April 30, 2010. The government both extended the credit and expanded it to include a $6,500 tax credit for current homebuyers who qualify. The legislation also raised income eligibility. Single buyers making up to $125,000 and married couples making up to $225,000 can now qualify.                                                                                                                                                                                           Economists suggest the tax credit contributed significantly to the scores of first-time home buyers who entered the market this year. According to NAR research, 47 percent of all home sales were entry-level buyers, compared to 41 percent a year ago.

Interestingly, NAR data shows that the tax credit has contributed approximately $22 billion to the general economy. Each home purchase generates about $63,000, the equivalent of about one new job.

The Federal Housing Authority (FHA) is trying to help. FHA is a major source of funding for residential purchases, especially for first-time home buyers.

New Settlment Statement forms.

Your settlement statement has changed. The Department of Housing and Urban Development (HUD) is requiring that loan originators provide borrowers with a standard Good Faith Estimate that clearly discloses key loan terms and closing costs, and also that closing agents provide borrowers with a new HUD-1 settlement statement. New RESPA regulations were published November 17, 2008 and are scheduled to take full effect on January 1, 2010. Among other things, the new form will allow borrowers to quickly review the most important components of their deal: rate, term and closing costs.