Palm Springs Area December Closings

CLOSINGS FOR DECEMBER 2007

PALM SPRINGS/CATHEDRAL CITY

2007 Resales 189 New 21 2006 Resales 207 New 25

DESERT HOT SPRINGS/NO PALM SPRINGS/THOUSAND PALMS

2007 Resales 44 New 16 2006 Resales 75 New 32

RANCHO MIRAGE/PALM DESERT/INDIAN WELLS/LA QUINTA

207 Resales 235 New 52 2006 Resales 292 New 79

INDIO/COACHELLA/EAST TO THE COLORADO RIVER

2007 Resales 95 New 52 2006 Resales 141 New170

Mortgage Rates Fall To Lowest Level in Four Weeks

Primary Mortgage Market Survey showed the 30-year fixed-rate mortgage with an average of 6.07%. The 15-year fixed-rate mortgage averaged 5.68%. The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 5.78%. The 1-year Treasury-indexed ARMS averaged 5.74%.

Frank Nothaft, Freddie Mac Vice President and Chief Economist, described this week's events. "The new year has begun with mixed signals on the direction of the economy and mortgage market. On the downside, the Institute for Supply Management's index of manufacturing activity showed significant contraction in this sector, perhaps a harbinger of a more substantial economic slowdown to begin this year. On the upside, the Conference Board reported that consumer confidence rose in December for the first time in five months, with more positive expectations for the next six months. Furthermore, interest rates have moved lower with average 30-year fixed-rate mortgage rates down about a tenth of a percentage point, the lowest in four weeks."

The 30-year loan started at 5.91% and finished at 5.66%. The 15-year loan began at 5.45% and finished at 5.17%. The money market fund began at 3.43% and finished at 3.40%. The $10,000 money market fund started at 3.68% and finished at 3.66%. The one-year CD started at 4.35% and finished at 4.32%.

Tax Law Changes for 2007

Tax Law Changes for 2007 ReturnsIn letter FS-2008-1 on Jan. 2, 2008, the IRS explained a number of changes that affect 2007 tax returns.At the end of December, Congress increased the AMT exemption to $66,250 for a married couple filing jointly and $44,350 for single persons and heads of households. For the approximately 13.5 million taxpayers who file the forms affected by the AMT change, they should delay filing until February 11, 2008. After that date, the IRS computers will be updated and able to process AMT calculations for tax returns.Other changes for 2007 affect the tax extenders such as the educator expense deduction and tuition and fees deduction. These are now in their normal places on the IRS forms.

Previously, the tax extenders were passed so late in the year by Congress that they were not on the regular form.Finally, the IRA contribution limits and many other items are increased. 401(k) elective contributions increase to $15,500. These limits and the additional $5,000 "catch up" amount for persons age 50 to 70½ also apply to 403(b) plans maintained by most nonprofits.

Any gift to charity of cash now requires a written confirmation. This can be a bank record or a written receipt from the charity showing the date and amount of the gift. Receipts are also required for gifts over $250 to charity or for a "quid pro quo" gift. This is a gift over $75 with benefit received from a charity. A typical example of this "benefit received" gift is a donor who pays $100 for a seat at the annual charity gala dinner. The value of the dinner will reduce his or her charitable deduction.Mileage rates were also adjusted in 2007.

The business use rate is 48.5 cents, the medical travel rate is 20 cents per mile and charitable mileage rate 14 cents per mile.Savings with Tax CreditsIn FS-2008-2 the IRS encouraged all taxpayers to take available credits. The credits are particularly valuable, since they reduce taxes dollar-for-dollar.

The earned income tax credit (EITC) is available for working families with incomes under $39,783 or childless workers with incomes under $14,590. Dependent children under age 17 will qualify for a credit of up to $1,000 per child. This is in addition to the $3,400 exemption.If your child is a dependent and under age 13, then you may qualify for the child and dependent care credit. For parents with students in college, there is a Hope credit for the first two years for students enrolled at least half-time. There also is a lifetime learning credit. Education credits are explained in IRS Publication 970.

The Saver's credit is available for single persons with incomes under $26,000 and married couples with incomes under $39,000. By contributing to an IRA before April 15, 2008, the Saver's credit may be claimed.

With the increase in oil prices and energy costs, many home improvements could qualify you for the energy-saving tax credit. Insulation, windows and doors, water heaters, heat pumps and other components may qualify for the $500 credit. In addition, there is a 30% credit for the cost of photovoltaic or solar water-heating units.

eFiling and Free FileDuring the last filing season, over 77 million taxpayers used the eFile system to send in their returns. Many CPA's and other tax professionals are now encouraging their clients to use electronic filing. In addition, taxpayers who complete their returns with software from a commercial provider may also use the eFile system. The eFile returns generally benefit from the error checking in the tax preparation software and are likely to have fewer mistakes.

Approximately 95 million taxpayers will also be eligible for IRS FreeFile. The FreeFile online tax program is a joint venture between the IRS and a number of commercial software tax software providers. Individuals with adjusted gross incomes of $54,000 or less are eligible. The FreeFile program is available on www.irs.gov.Editor's Note: To access any of the extensive information on the IRS site or to use FreeFile, a person should visit www.irs.gov. There have been millions of email messages to individuals claiming to represent the IRS that are fraudulent. The IRS does not use a .com, .org, .tv, .cc or any other address for its official site. The safe and sure way to access the site is to type in www.irs.gov.

Palm Springs Palermo

For a very limited time, your new home buyers at PALERMO will live nearly FREE for one year!

Palermo will pay your Palermo buyer's first year Mortage including principle & interest, real estate taxes and Home Owners Association Dues! This is an incredible new program in place & effective immediately, valued at approximately $40,000!!!

Palermo's 4 Town Home plans are 1275 - 1375 square feet of contemporary living...$389,900 - $399,900.

Palermo's 3 one-story Villa plans are 831 - 1131 square feet...$279,900 - $395,900 (2 bedroom/2 bath).

Call Mike McCoy or Ken Simpson at 760-333-1834

FHA Moderization Act

RISMEDIA, Dec. 18, 2007-The FHA Modernization Act of 2007, passed Friday by the U.S. Senate, would help protect the interest of America’s current and future homeowners by giving borrowers a safer alternative to riskier mortgage products while also helping many homeowners who may be facing foreclosure, according to the National Association of Realtors(R).

“A reformed FHA is positioned to help homeowners who face unaffordable mortgage payments as a result of resetting adjustable subprime loans and help bring stability to local markets and economies,” said NAR President Richard Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif. “NAR commends the leadership of Majority Leader Harry Reid, D-Nev.; Senate Banking Chairman Christopher Dodd, D-Conn.; and Sens. Mel Martinez, R-Fla., and Richard Shelby, R-Ala., for passing the Federal Housing Administration reform bill, S. 2338.”

NAR has long supported FHA modernization legislation that would increase loan limits, reduce or eliminate the statutory 3% minimum cash down payment, and give FHA increased flexibility and the ability to streamline certain programs, in addition to strengthening the loss mitigation program.

“FHA can once again be a leader in providing safe loan products and preventing foreclosures by authorizing lenders to help borrowers who are in default. That assistance will make a substantial difference for many families that may otherwise face foreclosure,” Gaylord said.
In addition, the increase in FHA mortgage loan limits would help first-time home buyers, minority buyers, and people who do not qualify for conventional mortgages. Increased loan limits would also help people living in high-cost areas; current FHA limits make the program unusable in these areas,” said Gaylord.

Gaylord noted that FHA has made mortgage insurance widely available to individuals regardless of race, ethnicity or social status during periods of prosperity and economic depression. The FHA program makes it possible for higher risk yet creditworthy borrowers to obtain prime financing.

“NAR recognizes and appreciates the Senate’s bipartisan effort. We hope this bill is sent quickly to the President and that he signs it into law swiftly,” said Gaylord. “As the leading advocate for homeownership and housing issues, NAR believes that FHA reform not only helps home buyers, but also is a good catalyst for the nation’s economy.”

In addition to NAR, HUD Secretary Alphonso Jackson, the National Association of Home Builders (NAHB), and the Mortgage Bankers Association feel this is a step in the right direction for homeowners.

“I applaud the Senate’s overwhelming passage of an FHA Modernization bill that will provide hundreds of thousands of hard working American families a safer mortgage option — whether they’re looking to purchase a home or refinance an existing mortgage,” said Jackson. “HUD’s Federal Housing Administration can provide many homeowners with a fairer, more affordable, and more sustainable alternative to costly subprime loans. I especially appreciate the bipartisan leadership of Senators Chris Dodd and Mel Martinez in our effort to reform FHA.
I strongly urge the House and Senate to send the President a bill he can sign before the end of the year. Keeping a roof over the heads of families is the best gift Congress could give the American public this year.”

“The nation’s home builders applaud the Senate action to modernize the FHA to allow the agency to carry out its mission to spur housing opportunities for America’s working families,” said Brian Catalde, president of the National Association of Home Builders (NAHB) and a home builder from El Segundo, Calif. “The measure would offer borrowers a safe and fair mortgage alternative to the volatile subprime market. We urge the House and Senate to move quickly to iron out differences between their bills and bring this legislation to the President’s desk before year-end.”

“We applaud Banking Committee Chairman Dodd and Ranking Member Shelby, as well as other members of the Committee, for their efforts on this very important piece of legislation,” said David G. Kittle, CMB, Chairman-elect of the Mortgage Bankers Association (MBA). “Given the current housing market environment, modernizing FHA is something that the government can do that will have an immediate impact helping some distressed borrowers who are having trouble paying their current mortgages avoid foreclosure…This legislation will allow FHA to be more efficient and timely in meeting the needs of borrowers - which is especially important during this time of market turmoil. A revitalized FHA is crucial to helping low- and moderate-income and first-time home buyers realize the American dream of homeownership. We look forward to getting a meaningful FHA modernization bill to the President as soon as possible.”

7 tips for selling your home

Daily Real Estate News December 14, 20077

Tips for Selling a Home Faster

The seven tips come from an analysis of academic research, multiple listings service data, and from information posted on Redfin’s various Web sites.

1. Don't overprice your property. According to a 2002 academic study of 3,490 California listings, homes without a price reduction sold for 97 percent of the initial list price, whereas homes with a price reduction sold for 88 percent of the initial list price.

At McCoy-Simpson we will never tell you to over price your property just to get the listing like other agents. We want you to sell your home as quickly as possible by having your property listed for the best price.

2. Set your price to show up in Web searches. A September 2007 Redfin study analyzed how online search filters affect traffic to a listing. Because real estate sites filter on price in $25,000 or $50,000 increments, listings priced at or below these thresholds — $250,000 rather than $251,000, or $325,000 rather than $326,000 — get as much as 7.1 percent more online visits.

3. Debut on Friday. A December 2007 Redfin analysis of its online traffic for 119,079 listings across seven markets found that listings that debut on Friday get on average 7.7 percent more visitors in their first seven days than those that debut on the worst day, Thursday. For the majority of the US market.

Because we live in a second home and seasonal / vacation area we have found that the Debut of new listings are best on Saturday and Sunday.

4. Get sellers engaged with your agent. According to several academic studies, motivated, active sellers are able to sell their property as much as 30 percent faster.

At McCoy-Simpson, we always have our sellers engaged in the business of selling their home. It is a trusted and honest partnership!

5. Market the property online. Promoting a listing on Web sites beyond the local Multiple Listing Service can drive a significant number of new online visits to a property. A December 2007 analysis of 121 Redfin listings found that promoting the listings on Craigslist resulted in an average of 6.8 online visits to the property for each Craigslist promotion.

At McCoy-Simpson we list all properties on line, LA Times, Multiple Listing Service, Graigslist, Realtor.com (#1 website), Yahoo, McCoySimpsonProperties.com, Prudential Ca. Realty and many more.

6. Have sellers stay put. The study of 3,490 California listings, cited earlier, found that vacant homes were 9.5 percent more likely to undergo a price reduction. If you no longer live in the home the best alternative is that you stage the home.

7. If you have a number of neighboring foreclosures don't put your home on the market, wait for them to be taken off the market or sold. According to a November 2007 report from the Center for Responsible Lending, a foreclosure costs neighboring home owners an average of $5,000 when listing their property.

Contact Mike McCoy & Ken Simpson today for your free comparative market report, 760-861-6895.

HOPE NOW - Helping up to 1.2 million homeowners who could be eligible for assistance.

In August, President Bush announced measures to help many struggling homeowners, including directing Treasury Secretary Henry Paulson and Housing and Urban Development (HUD) Secretary Alphonso Jackson to work with lenders, loan servicers, mortgage counselors, and investors on an initiative to help struggling homeowners.

Secretaries Paulson and Jackson responded by assembling a private-sector group called the HOPE NOW Alliance. HOPE NOW is an example of government bringing together members of the private sector to voluntarily address a national challenge - without taxpayer subsidies or government mandates. Today, the President announced that these efforts have yielded a promising new source of relief for American homeowners.

President Bush announced that representatives of HOPE NOW have developed a plan under which up to 1.2 million homeowners could be eligible for assistance.

Many individual homeowners feeling financial stress have adjustable rate mortgages, which typically start with a lower interest rate and then reset to a higher rate after a few years. The HOPE NOW plan is designed to help subprime borrowers who can at least afford the current, starter rate on a subprime loan, but will not be able to make the higher payments once the interest rate goes up.

HOPE NOW members have agreed on a set of new industry-wide standards to provide systematic relief to these borrowers in one of three ways:

1. Refinancing an existing loan into a new private mortgage;
2. Moving them into an FHASecure loan;
or3. Freezing their current interest rates for five years.

Since the President’s announcement in August of actions to assist homeowners, the Administration has moved forward with the following:

1. A new initiative at the Federal Housing Administration (FHA) called FHASecure. FHASecure expands the FHA’s ability to offer refinancing by giving it the flexibility to work with homeowners who have good credit histories but cannot afford their current payments. In just three months, the FHA has received over 120,000 refinancing applications and has already helped more than 35,000 people refinance. By the end of 2008, the FHA expects this program to help more than 300,000 families.

The FHA is also on track to start charging mortgage insurance premiums based on the individual risk of each loan, using traditional underwriting standards. Risk-based pricing will expand access and enable FHA to help even more low-to-moderate income families who could not otherwise qualify for prime-rate financing.

2. Secretaries Paulson and Jackson have assembled the private-sector HOPE NOW alliance. In addition: HOPE NOW recently mailed hundreds of thousands of letters to borrowers falling behind on their payments. In the past, some lenders and mortgage servicers may not have contacted borrowers until after their loans were delinquent. The Alliance is trying to reach families early, before their mortgage problem becomes overwhelming. HOPE NOW has supported a toll-free hotline, 1-888-995-HOPE, which is available 24-hours a day to provide mortgage counseling in multiple languages.

3. The Federal government is taking several regulatory actions to make the mortgage industry more transparent, reliable, and fair. Later this month, the Federal Reserve intends to announce stronger lending standards that will help protect borrowers. In addition, HUD and the Federal banking regulators are each taking steps to improve disclosure requirements so that homeowners can be confident they are receiving complete, accurate, and understandable information about their mortgages.

To aid in this initiative, according to the Announcement, members Of Congress would need to:

1. Pass legislation to modernize the FHA. In April 2006, President Bush first sent Congress an FHA modernization bill that would increase access to FHA-insured loans by lowering downpayment requirements, allowing the FHA to insure bigger mortgages in high-cost states, and expanding FHA’s authority to price insurance fairly, with risk based premiums. The House passed the bill with more than 400 votes last year. This year, the House passed it again, yet the Senate has not acted.

The liquidity and stability that FHA provides the market are needed now more than ever, and the President urges the Senate to move as quickly as possible. This bill could allow the FHA to help 250,000 additional families by the end of 2008.

2. Congress needs to temporarily reform the tax code to help homeowners refinance during this time of housing market stress. Under current law, if the value of your house declines and your bank forgives a portion of your mortgage, the tax code treats the amount forgiven as taxable income. The House recently passed this tax relief with bipartisan support, and the Senate should pass relief as soon as possible.

The Administration has also proposed allowing cities and States to issue tax-exempt mortgage bonds to refinance existing loans, and the President calls on Congress to approve this temporary measure quickly. Under current law, cities and states can issue tax-exempt bonds to finance new mortgages for first-time homebuyers, and this measure would make it easier for State housing authorities to help troubled borrowers.

3. Congress needs to pass funding to support mortgage counseling. Non-profit groups like NeighborWorks provide an essential service by helping homeowners find affordable mortgage solutions and prevent foreclosures. The President’s FY 2008 Budget requests $120 million for NeighborWorks and another $50 million for HUD’s mortgage counseling program. Congress has had these requests since early February, and it needs to stop delaying and get this funding to the President’s desk.

4. Congress needs to pass legislation to reform Government Sponsored Enterprises (GSEs) like Freddie Mac and Fannie Mae. GSEs provide liquidity to the mortgage market that benefits millions of homeowners, and it is vital that they operate safely and soundly. The President has called on Congress to pass legislation that strengthens independent regulation of the GSEs and ensures they focus on their important housing mission. The GSE reform bill passed by the House earlier this year is a good start, and the Senate needs to pass legislation soon.
While these initiatives were clearly lined up, reactions have been mixed those working with homeowners in distress.

NAR released an official announcement, citing their support for the Administration’s efforts.
“The dream of homeownership should not turn into a family’s worst nightmare,” said NAR President Richard Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, California. “As the leading advocate for housing issues, NAR has been working with Congress and the administration to protect homeowners who may be facing foreclosure as the result of predatory lending practices and as the interest rates on many subprime loans reset. The loan modification program introduced by President Bush and U.S. Treasury Secretary Henry Paulson is a good first step in helping deserving families keep their homes.”

NAR has been working with Congress throughout 2007 to modernize Federal Housing Administration programs that will once again make the FHA a viable mortgage product and help protect many current and future homeowners by offering a secure alternative to subprime loans. NAR has also been pushing Congress to reform Fannie Mae and Freddie Mac and increase their conforming loan limits, which will not only help home buyers but also will help improve liquidity in the lending industry.

“We are pleased that the administration has taken action today and are hopeful that Congress will now move quickly to approve FHA modernization and GSE reform,” Gaylord said.
Colleen Hernandez, president and executive director, of the Homeownership Preservation Foundation, a national non-profit organization that operates (888) 995-HOPE to assist troubled homeowners, also issued a statement in response to President Bush’s announcement on housing issues.

“Today’s developments underscore the importance of using trained mortgage counselors to understand how President Bush’s announcement impacts individual homeowners…Our counselors remain focused on today’s announcement as details of the plan continue to emerge…We encourage Americans, whether or not they believe that they qualify for the program introduced today, to contact their mortgage company or to take advantage of our trained counselors, reachable at (888) 995-HOPE, who can help them to understand these developments.

The National Association of Home Builders (NAHB) also expressed their support for the new plan.

“The Administration’s plan to help struggling borrowers stay in their homes is one of several steps that can help stabilize the housing market and reassure consumers and investors in the mortgage market,” said NAHB President Brian Catalde, a home builder from El Segundo, California. “We applaud this action and urge Congress to follow up quickly on pending legislation that would provide additional help in easing the credit crunch and restoring confidence in the marketplace.”

Specifically, Catalde called on Congress to:

- Enact FHA reform legislation to allow the agency to insure more home loans and help subprime borrowers.
- Strengthen regulatory oversight of Fannie Mae and Freddie Mac and allow them to purchase mortgages in high-cost markets.
- Enact legislation that eliminates taxes on mortgage debt that is forgiven as part of a loan workout.

More specifically, NeighborWorks® America applauds this important step support, as these efforts will help homeowners stay in their homes and preserve the nation’s communities.
The organization notes that there are many ways to assist homeowners facing financial difficulties. Loan modifications and interest rate freezes for homeowners who are current on their mortgages and will need help once their mortgage interest rates reset is just one way to help reduce the number of foreclosures.

Apprehension also followed this news, with sixty-one economists, signing a letter in conjunction with the non-profit advocacy group FreedomWorks opposing the “bail out.”

The letter warns that:

“Legislation to create new underwriting standards will reduce competition and restrict consumer access to credit. Additionally, efforts to bail out or shore up lending institutions create a moral hazard that would slow the adjustments required in the marketplace…. These [bail out] proposals would fundamentally alter the workings of the mortgage market, leaving consumers with fewer choices when seeking to buy a home and potentially increasing taxpayer exposure for bad loans.”

Former U.S. House Majority Leader Dick Armey, a former economics professor who now serves as Chairman of FreedomWorks, commented: “This letter should give policymakers pause in their rush to pass bailout schemes for the real estate market. Most of the policy proposals before Congress would arbitrarily rewrite private contracts, reward speculative lending and borrowing, and expose taxpayers to additional risks. Though it’s understandable that legislators might want to respond to homeowner difficulties, the proposed regulations only serve to decrease credit availability for the poor and disadvantaged. Today’s letter adds an important new voice to the debate, that of many of the nation’s professional economists, who are calling on Congress to act responsibly and allow the subprime market to work through the current repricing of mortgage-backed securities.”