Until further notice, we are going to be more restrictive with our residential (SFR) property underwriting guidelines. Maximum LTVs for single family homes will be in the ~65% range with exceptions made on a case-by-case basis…and rare. Property values are in a state of decline in just about every market right now and has forced us to be more selective with the deals that are selected. Commercial and income producing real estate maximum LTVs are still at 75%.

[tags]Underwriting, Hard Money Lending, Loans, Mortgages, SFR, Residential[/tags]

Congress has finally made it around to passing legislation making PMI tax deductable in some cases. Here are a few of the main points:

Why is PMI insurance now tax-deductible?
Congress recently passed legislation that allows mortgage insurance premiums to be tax-deductible on loans originated for transactions beginning Jan. 1, 2007.

Who is eligible for the PMI deduction?
Borrowers with household adjusted gross income of $100,000 or less purchasing a home in 2007 will able to deduct the full cost of the mortgage insurance they pay during the 2007 tax year.

How does the PMI tax deduction work?
Just as your interest payments on your mortgage are tax-deductible, reducing your overall taxable income, you will now be able to deduct the mortgage insurance portion of your payment as well.

What is the lender’s responsibility?
To provide the borrowers with a year-end statement reflecting total mortgage insurance premium paid.

How much of the PMI premium can be deducted?
Borrowers with household adjusted gross income of $100,000 or less will able to deduct the full cost of the mortgage insurance they pay during the 2007 tax year.

[tags]PMI, Mortgage Insurance, Taxes, Tax Deductable[/tags]

A new statistic out this morning by the US Census Bureau and HUD; US homes actively being marketed was at an 11 year high this past July. According to the Department of Housing and Urban Development, the number of homes for sale was 568,000, a 22.4 per cent increase over the year and the biggest number since early 1995. However, interest rates on conventional home loans dipped a bit this morning indicating that this is probably a very good time to lock some fixed rate financing if you are planning on holding onto a particular piece of property for another 3+ years.

[tags]Housing, Inventory, Home Sales, Interest Rates, HUD[/tags]

Bloomberg.com is reporting today that US home sales dropped in July, over 11 percent from a year earlier according to the National Association of REALTORS (NAR). This report comes on the heels of a statement made by Chicago Fed President Michael Moskow said a sharp decline in housing, which by some estimates accounted for more than half of growth over the last three years. According to Moskow a sharp decline in the national housing market would be a risk to the economy.

Of course this should come as no surprise to anyone with half of a functioning brain. The FOMC is walking a very fine line right now trying to balance a measured slow down in the national housing market and still keep inflationary pressures in check.

[tags]Fed, FOMC, Interest Rates, Housing, NAR, Real Estate, Inflation[/tags]