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Friday, September 26, 2008

DAILY BRIEFING: Wednesday, September 24, 2008

Wednesday, September 24, 2008


The Florida Department of Revenue (DOR) issued a ruling late yesterday stating that doc stamp taxes owed on a short sale should be based on the sale price paid by the purchaser and not on the sale price PLUS any amount forgiven by the home seller's lender. DOR's ruling is effective immediately. A problem arose because Florida law does not clearly explain doc stamp fees on a short sale; consequently, local governments were making their own decisions and charging different amounts. FAR stepped in to officially request a Technical Assistance Advisory (TAA) from DOR, which would give Realtors a specific document that explains the short sale doc stamp procedure. "Just like Florida Realtors, DOR officials were concerned about how this issue could affect Florida homebuyers and sellers and its potential impact on the real estate market's recovery," says FAR Public Policy Representative Trey Price. "Advisories can sometimes take months or even a year before a conclusion is made, however, so DOR's quick decision illustrates their understanding of the importance of this issue."


For the second month in a row, several of Florida's metropolitan statistical areas (MSAs) reported increased sales of both existing single-family homes and existing condos, according to the FAR's August housing statistics. A total of 10,847 existing homes sold statewide last month, a decrease of 4 percent in the year-to-year comparison. Nationally, NAR reports that sales of existing homes declined 2.2 percent to a seasonally adjusted annual rate of 4.91 million units.


According to Fitch Ratings, Florida can expect a bit more turbulence before landing safely. Nearly $100 billion in loans are at risk for foreclosure nationwide over the next two years, with Florida's risk second only to California. According to Fitch, some option-ARMs could increase as much as 100 percent, with the average increase 65 percent.


Homeowner advocates weighed in Tuesday on the Wall Street bailout bill, pressing Congress to include bankruptcy court relief for people unable to keep up with their mortgage payments. Investors' advocates also demanded relief.


Mortgage fraud may be a problem for both homeowners and huge corporations. Two law enforcement officials said Tuesday the FBI is looking at potential fraud by mortgage finance giants Fannie Mae and Freddie Mac, insurer American International Group Inc. and other companies.


According to the Federal Housing Finance Agency, nationwide home prices in July fell a record 5.3 percent compared with a year ago and have now receded to October 2005 levels.


NAR'S political action committee (PAC) donated almost $4 million to congressional candidates this year, with over $1.3 million doled out during the week that ended Sept. 19, according to the Center for Responsive Politics. The PAC gave $530,000 to Rep. Joe Knollenberg (R-Mich.), $510,000 to Rep. Christopher Shays (R-Conn.), and a total of $890,000 to Rep. Paul Kanjorski (D-Pa.). NAR had the second-highest independent expenditures during the 2006 election cycle, totaling $3.7 million.

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