How many people remember this video while watching movies in the theater? Have a wonderful Labor day weekend and see you next week!

As stated before about FHA mortgage costs going up in September, looks like HUD pushed back the increase in mortgage costs to October 4th. Still need to wait for the mortgagee letter to come out and make it official. Find out more at www.hud.gov.

When markets are on very shaky ground, everyone hangs on the way sentences and wording come out of Fed Chairman Ben Bernanke’s mouth. So of coarse since he is talking later on this Friday, all eyes are on his mouth, well at least the words coming out of it. Here is what CNBC has to say about what might take place, hope you enjoy

http://www.cnbc.com/id/38872170

Bernanke Speech to Set Market Course Friday and Beyond

Published: Thursday, 26 Aug 2010 | 9:30 PM ET

By: Patti Domm
CNBC Executive Editor

Fed Chairman Ben Bernanke speaks on the economy and policy, at a time when both are shaky in the eyes of the markets.

Bernanke’s Friday morning address in Jackson Hole, Wyo. has become one of the most discussed, debated and dissected of his career, even before he’s given it.

“He’s going to need a miracle to satisfy all these multiple expectations that are all over the place,” said Art Cashin, director of floor operations at UBS. It is hoped that Bernanke will clarify two things – how bad the Fed believes the economy is getting and what it might do about it.

Friday’s markets will also get a look at the revisions made to second quarter GDP at 8:30 a.m. That could put the growth rate for the quarter ended June 30 at just 1.3 percent, compared to the previously reported 2.4 percent. That would also be the starting point for the current quarter, which by all signs is showing a continuing drop off in activity.

“Friday is going to bring a meaningful downward revision to GDP…Does the average person in the market know that? I don’t know,” said Dan Greenhaus, chief economic strategist at Miller Tabak. Consumer sentiment data is released at 9:55 a.m. and could also be a market mover.

Bernanke speaks at 10 a.m. before the Kansas City Fed’s annual symposium, which is attended by central bankers, economists and academics, plus an entourage of journalists. He will make his comments behind closed doors, away from television cameras, but on the other side of the country, Wall Street will be hanging on every word.

“The problem the Fed has is their forecast hasn’t changed very much, but the probability of a downside event has gone up, and they don’t think there’s much probability of an upside surprise. The problem they are having is how do they communicate that to people,” said Barry Knapp, head of equities portfolio strategy at Barclay’s Capital.  “It’s not a normal distribution. The downside risks are growing, but we can’t get more aggressive policy until their forecast moves, and they’re not there yet.”

“I think people expecting him to say something that’s going to be beneficial to the market are fooling themselves,” Knapp said.

Communication is what turned the heat up on Bernanke in the first place. When the Fed released the statement after its Aug. 10 meeting, it surprised and confused many in the markets by both downgrading its view of the economy and then immediately moving to a new easing program. Just three weeks before, Bernanke told a different story in Congressional testimony.

“I can’t remember a time when there was so much anticipation for a speech..How did he get here? I

don’t think it’s his fault. It’s the economy,” said J.P. Morgan economist Michael Feroli. But Feroli said the events leading up the last Fed meeting didn’t help, nor did the Fed’s communication after the meeting.

“The statement itself didn’t execute well in conveying a clear message,” he said.

The so-called quantitative easing announced in August involves the Fed replacing its maturing mortgage securities with Treasury securities, which in essence keeps the Fed balance sheet stable. In theory, it also could prevents a passive tightening.

The Fed also left the door open to further easing, which some in the market believe could ultimately be multiple trillions in Treasury purchases. The expected outcome would be that the Fed’s purchases would help force down rates, helping to spur lending. Traders have been gaming how and when the Fed might act.

Many in the market point to the communications that have come from the newspaper, rather than Fed officials. There was a Wall Street Journal article just before the August meeting that suggested the Fed would adopt a program to replace maturing mortgages on its balance sheet by purchasing more securities. Many in the  markets did not believe it would be an imminent action because of Bernanke’s July comments.

Then this week, ahead of Bernanke’s speech, another highly-detailed Wall Street Journal story described a split of opinion within the Fed, and noted that at least seven of 17 members disagreed or were concerned about quantitative easing.

“He does have a committee to respect, but he can push the agenda forward. If he lays out the framework and the conditions under which they would act, and kind of lays out the forecast, I think it’s possible to infer the likelihood of quantitative easing,” said Feroli.

There has also been criticism of Bernanke for not showing stronger leadership, and Fed watchers expect him to use the speech as a way to restore confidence in the Fed’s processes and in himself.

“Maybe people were used to a leader from (former Fed Chairman Alan) Greenspan, but there’s nothing that necessarily says that’s the proper way for a central bank to be governed,” Feroli said.

The Dow Thursday fell 74 to 9985, and the S&P 500 slid 8 to 1047, below a key support level. Bonds saw buying, and the yield on the 10-year moved down to 2.50 percent. Thursday’s weekly jobless claims improved slightly to 473,000, but the number of emergency claims rose sharply, worrying investors. The Kansas City Fed’s survey, released in the late morning, also painted a gloomy picture. New orders fell sharply, not unlike the Philadelphia Fed survey last week.

Yes, the cost of an FHA mortgage is going up for any new case id numbers ordered past September 7th, 2010. The mortgagee letter has not come out yet but it was passed through congress (HR 5981) for this to take place. Here is the break down:

Old:

2.25% Upfront mortgage insurance premium

.55% Monthly payments

NEW:

1.00% Upfront mortgage insurance premiums

.85 to .90% monthly and HUD could raise to 1.55% max when needed.

Well, you might be thinking this is a good deal  because the UFMIP went down a lot and monthly barely went up…….well think again. Here is a video showing how this is just increasing the costs a lot more for homebuyers.

http://www.thinkbigworksmall.com/mypage/archive/1/52542/

And for those of you who just want the math, here you go:

Examples  OLD WAY:

$200,000 mortgage

$204,500 with UFMIP (2.25%)

$1,098 per month P&I (5% rate)plus $94 monthly MI(.55%)

Equals: $1192 a month

NEW WAY after September 7th, 2010:

$200,000 mortgage

$202,000 with UFMIP (1.00%)

$1084 per month P&I (5% rate)plus $152 monthly MI (.90%)

Equals: $1236 a month

Sooooooooooo………$1236 – $1192 = $44 increase per month.

This is a good reason of why anyone who is getting an FHA mortgage should get it done before September 7th, 2010 or they will be paying more for their financing. Hope this helps and would like to hear what you think.

Attended National Night out in Tinley Park, Illinois and a lot of people got to see Thor the police K9 take on a bad guy.

Word to our government;

Please before making laws and regulations, consult with a panel of experts from the industry and listen to the actual feed back before making laws and regulations. I know our representatives have tons of people telling them what to do……..but please seek out experts first……and not just a few, have a panel of them. Perfect example is the new GFE that went from 1 page to 3 pages. The GOOD thing is this form makes the fees stay within reason from the time of application to closing so no surprise fees for borrowers. The BAD thing is you forgot to check how different states collect certain fees and the buyers actually get a credit for lets say taxes for the time the seller was living in the property. Also don’t forget FHA collects an upfront mortgage insurance fee up front that gets financed back into the mortgage amount if borrower chooses that option. Last thing, what if the seller was giving a credit on the sales contract? These credits do not show up on the GFE, so please fix it!

Well, here is a video the great guys at Thinkbigworksmall did about HR 600 House bill that is taking us right back to where we were doing loans before. Please make up your mind……seller to help the buyer out for down payment and closing costs or not help the buyer……..let us know please Mr. Government.

Reinstating Seller Paid Down Payment Assitance

Finally, after the long journey, home buyers that had a sales contract signed by April 30th now have until September 30th to close on their transaction. It came down to the wire as this was an amendment on HR 4213 “The Unemployment Bill”, then after a couple of political maneuvers had separate bills created for just unemployment benefits extension and tax credit extension. Last night looks like the Senate did a unanimous vote to send this bill to the presidents desk for signing into law before going on break until July 12th. The unemployment bill however got tabled and nothing will happen on that until the Senate comes back.

So, now everyone who still has a signed sales contract before April 30th, I would suggest getting your deals closed before September 30th! Hope this helps, and below is another article from the Wall Street Journal.

http://online.wsj.com/article/BT-CO-20100701-705302.html

Since the Homebuyer Tax Credit Extension is attached to bill HR 4213 which is the unemployment bill, there are several hurdles along the way. Currently one of the hurdles is coming from Sen. Tom Coburn (R, OK) and he is using a procedure known as a “Clay Pigeon” which would split the amendments of the bill into 20 separate pieces and would cause voting to take place 20 different times. This slows down the process for approval and could open the door for losing supporting votes. Here is a good website to see updated status of this bill. Hope this helps

http://www.opencongress.org/articles/view/1924-Coburn-Now-Using-Arcane-Procedure-to-Stall-Unemployment-Bill

Yes, the Senate has moved the tax credit extension on to the next steps allowing borrowers until September 30th to get financing on their sales contracts they got before the April 30th date. If anyone has already closed though, they can go to the direct links at Tax Forms to print them out and follow the instructions to get your tax credit. Below is a good article explaining what is taking place, hope this helps!

Just wanted to highlight this part of the article though:

“Reid, D-Nev., added the proposal to a bill extending jobless benefits through the end of November. Nevada has the nation’s highest foreclosure rate, and Reid is facing a tough re-election campaign.

That’s right, their was a bill introduced Thursday that could extend out the cut off date for the loan to close from June 30th to September 30th 2010. Also from this Wall Street Journal article you can see why the extension would be needed for making sure the closing date is met. The caution I put on this is still treat your closing as it MUST get closed by June 30th because this option proposed to extend the date is attached to a bill that is getting a lot of push back for getting the votes to move through congress. The article below is a good one from WSJ and here is another link to CNNMoney about the same subject. Hope you Enjoy   Don’t forget to print out those IRS forms……just head over to TAX CREDIT FORMS with direct links to the forms on the IRS website.  

http://money.cnn.com/2010/06/10/real_estate/housing_credit_extension/index.htm

Congress Considers Tax-Credit Extension for Some Home Buyers

The Wall Street Journal

By NICK TIMIRAOS 

http://online.wsj.com/article/SB10001424052748703627704575298610215024500.html?mod=WSJ_latestheadlines

Congress is considering an extension for would-be home buyers who are racing to close home sales in order to receive a federal tax credit.

The real-estate industry has warned that tens of thousands of buyers who rushed to buy homes to qualify might not close before the deadline imposed by Congress, meaning they could miss out on receiving credits worth thousands of dollars without action from Congress.

Congress last fall extended an $8,000 tax credit for first-time home buyers and added a smaller $6,500 credit for current homeowners who were buying a primary residence. To qualify for the credit, buyers had to sign purchase contracts by April 30 and must close on the transaction by June 30.

But there are so many transactions in the pipeline that the companies responsible for handling the sales, including mortgage lenders, appraisers and title insurers and real-estate brokers, say the last-minute home-buying rush in April has created bottlenecks.

On Thursday, Senate Majority Leader Harry Reid (D., Nev.) said he would back a measure to extend the June 30 closing date to Sept. 30 for buyers who had met the April contract deadline.

The National Association of Realtors estimates that between 55,000 and 75,000 home buyers who are under contract won’t be able to close in time to claim the tax credit. The trade group is lobbying Congress to extend the June 30 deadline only for those buyers who met the April deadline.

“Everybody who got under contract at the end of April deserves to get the tax credit,” says Stephen Adamo, president of Weichert Financial Services, a division of real-estate brokerage Weichert Realtors. “For reasons out of their control, they’re in jeopardy of losing it.”

That is causing heartburn for buyers like Alan Nickelson, a first-time home buyer who went into contract on a three-bedroom home in Kent, Wash., days before the tax-credit deadline in April. While he was pre-approved for a loan and will make a 20% down payment on the $275,000 home, he says the transaction has been held up because of home inspections and work repairs required by the appraiser.

Mr. Nickelson says it is “entirely possible” that he will miss out on the tax credit. He says he would have bought the home anyway but that he planned to use the $8,000 credit to offset repair costs. “It was icing on the cake, but it was really sweet icing,” says the 52-year-old machinist.

One particular worry is that short sales, where a lender allows a home to sell for less than the amount owed, won’t receive requisite approvals in time to meet the closing deadline. Unlike normal sales where only two parties—the buyer and the seller—negotiate the price, short sales are more time-consuming affairs because they require note-holders to agree on price.

“From February on, I told people, you have no chance” of finishing a short sale by June 30, says Steve Capen, a real-estate agent in St. Petersburg, Fla. But he says clients who have been pursuing deals before that could miss the deadline.

Real-estate agents say that even “plain-vanilla” transactions are increasingly at risk. Response times from loan officers and appraisers have doubled over the past month, says Kailee Rainey, who works for a Seattle-based real-estate brokerage.

Lee Barrett, president of Century 21 Barrett, a real-estate firm in Las Vegas, spent part of the week in Washington meeting with his congressional delegation about the need to extend the closing deadline. “The lenders are overwhelmed. The title companies are overwhelmed,” he says. “It’s just a mad surge of everybody trying to close deals.”

At Wells Fargo& Co., employees from other sales divisions are being brought in to handle mortgages, and staffs are working weekends and nights to process higher volumes. “It’s all hands on deck,” says Greg Gwizdz, an executive vice president at Wells Fargo Home Mortgage. He says the bank has prioritized “every customer who qualified for the tax credit.”

A spokeswoman for Bank of America Corp. says the lender is also placing “increased priority” on loan applications submitted before the April 30 deadline. Luke Hayden, president of PHH Mortgage, a lender based in Mount Laurel, N.J., says consumers can help speed the process along by being “very responsive to requests for documentation” from lenders.

Some of the delay reflects new rules related to disclosure and appraisal requirements enacted to correct the excesses of the bubble years. The new regulations have prompted lenders to take extra caution at every step, stretching closing timelines.

The tax incentive was credited with boosting existing-home sales in April by 23% from year-earlier levels, according to the NAR, while new-home sales gained by 47.8% from one year ago, according to government figures.

It is unclear how many sales would fall through for those who miss out on the tax credit. Buyers could be hard-pressed to void sales contracts unless they have made their closing contingent on receiving the tax credit or are willing to forgo any deposits.

An extension would benefit Kalliopi Michalopoulou, a first-time home buyer who went into contract in February and agreed to put 25% down on a $580,000 three-bedroom cooperative apartment in Upper Manhattan. Her pre-approval for the loan expired last month after renovations took longer than expected to complete.

“I’m so close to canceling now the contract because I’m so upset,” she says. “If I knew I was going to get the tax credit, I wouldn’t mind that much. But this feels like a punishment.”