Last year’s So Long to Summer Festival drew about 6,000 people who paid a $4 admission to listen to a live band, play carnival games, ride a kiddies train and participate in other activities in a festive atmosphere.

This comes on the heals of the controversy surrounding the Gilbert days parade. The event was all but cancelled until a few big name private sponsors kicked in money to save the event.

But Community Services Director Jim Norman said his department must begin to “reinvent” how festivities are organized in the face of reduced funding and staff.

“We’ll try not to be too dramatic with some of the events we’ve been involved in for the first year,” he said, noting the change would occur gradually.

Town Council at a special meeting May 1 directed Norman and his staff to work toward a 100 percent cost recovery for festivities over the next three to four years.

Council also eliminated $38,500 for special events in the coming fiscal year.

Norman said funds for Gilbert Days and Fourth of July, both organized by the Gilbert Promotional Corp., came out of this allocation.

But he noted that for the last two years, the Town Council has approved additional funding for both events.

“I would imagine the Council will do that again in the future but funding will then have to come from contingency instead of the Community Services budget,” he said.

The special events unit had three staffers coordinating events until one member was transferred recently to coordinate the sports coalition groups.

Although the transferred staff member did “double duty” for a while, Norman said he was able to test whether a two-member team could offer the same support as before.

“The two people had to work hard, but still we were able to do it,” he said.

With So Long to Summer Fest eliminated, it would be one less activity to work on for two staff members next year.

Gail Disch, a member of the Citizens Budget Committee, said Constitution Week also took place in September during the same time frame as the summer fest. A private group funds and organizes Constitution Week.

Although the summer fest is not the most popular town-organized festival – the Halloween carnival drew 8,000 last year – “it was a very popular event,” Disch said.

“Perhaps it was an event that a private group or promoter is interested in taking over and doing,” she added.

It’s a toss-up, say pro-tax credit-leaning advocates. But the program will continue through the end of this year, or at the least, for another six months, they maintain.

Yet some seem confident the program will be terminated at the end of April.

Unfortunately President Barack Obama and his administration have not given any tea leaves that can be read for future outcomes.

One industry professional, however, is going out on a limb with the pro-tax credit extension group.

Mitchell C. Hochberg, a principal at Madden Real Estate Ventures, LLC in New York City, tells Real Estate Channel:

“Congress will extend the credits to mitigate the impact of two recent events: The Federal Reserve ending its program of buying mortgage backed securities and the recent rise in mortgage rates (30 year fixed rate mortgages climbed to 5.31% from 5.04%) both of which will have a negative impact on home sales.”

Termination date is April 30. The eight-month program, first announced in February 2009 and scheduled to end Dec. 1, 2009, was extended in November 2009 to April 30, 2010.

The positive effect of the program has been record-shaking.  All  agree that one million homes have been sold to date, largely due to the tax program.

Yet U.S. Central Bank ended its $1.4 trillion investment into purchasing mortgage-backed securities on April 1 of this year.

But proponents of the program, including all of the Washington, DC-based trade lobbyists, brush that argument aside.

Instead, they maintain the program will be extended because it could prove to be a smart political move in this election year.

Sen. Bill Nelson (D-FL)

So far, however, the rumblings haven’t been loud on Capitol Hill. But they will be as the April 30 deadline approaches, industry watchers say.

In the past 18 months, the big guns for the initial and extended programs have been Sen. Bill Nelson (D-FL), Senate Majority Leader Harry Reid of Nevada, Senate Finance Committee Chairman Max Baucus of Montana and Sen. Johnny Isakson (R-GA).

Isakson especially was in the forefront of the last program extension. He wanted the program to be extended through Dec. 30, 2010; double the credit to $15,000; and remove restrictions that prohibit individuals who already homes or earn $75,000 to $150,000 for couples, from getting the tax break.

Isakson’s bill was shot down in a close Senate vote, 50 to 47 in August 2009.

Sen. Harry Reid

The two biggest housing grade groups, the 1.2-million-member National Associations of Realtors and the 800-association member National Association of Home Builders, had also favored expanding the credit to $15,000 at that time.

Failure to extend what may be one of the most effective pieces of the Obama administration’s 3009 stimulus legislation would cost jobs, economic growth and tax revenue, the housing groups argue.

There has been no official comment from Obama. However, when the current program extension was being debated in November 2009, the President’s press secretary, Robert Gibbs, told the media Obama was “evaluating the impact” on new home sales.

Lawmakers are under pressure from real estate agents, mortgage brokers, title settlement offices and home builders to extend the program.

Sen. Max baucus

However, lawmakers are also facing pressure from governance groups and recent IRS reports claiming widespread fraud around claims for the $8,000 and $6,500 tax credits.

According to published reports, the IRS has identified about 75,000 claims totaling almost $600 million that may not be from first-time homebuyers.

They also found that about 600 taxpayers under 18 years old and ineligible to buy a home claimed almost $5 million in credits.

Two key related questions are also part of the program extension debate. They are: Will mortgage rates rise and will the housing market thrive or fall after the program ends?

Sen. Johnny Isakson (R-GA)

Industry experts say the answer to the first question is easy – mortgage rates already are rising from the 5 percent level they have been at for the past 18 months.

The answer to the second question continues to remains debatable and will vary from market to market.

For example, a quicker recovery than in most of the nation is being forecast for the Philadelphia-Baltimore-Washington, DC corridor. That’s largely because of the heavy presence of a government-employee and military population, according to several brokers.

The Minneapolis-St. Paul market is also healthy but only because of the tax credit programs, points out Tony Maurer. President, St. Paul Area Realtors Association.

Tony Maurer

“The programs helped prop up a sagging housing market,” Maurer says in published reports. “There is no question that the First Time Homebuyer Tax Credit, as well as the federal government’s purchase of bank securities has stabilized the marketplace.

However, Maurer says, “It is an unknown that at the conclusion of the tax credit program, what we will see from the marketplace standing on its own.”

Maurer’s counterpart across town, Brad Fisher, president, Minneapolis Area Association of Realtors, speculates interest rates could continue rising, once the tax credit program ends.

“I think we will have to get through the April 30 deadline for people to buy homes and then we will have to see the demand after that, because that will have a bearing on where our interest rates go,” Fisher says.

Bode Miller Skis For RE/MAX

As a RE/MAX Agent who specializes in Phoenix Real Estate it is always a pleasure to see the powerful RE/MAX brand at work. To be a part of RE/MAX Alliance is truly a joy! Check out this Wall Street Journal Article where a photo of U.S. skier Bode Miller accompanied a story about tape delays for 2010 Winter Olympics in Vancouver on the front of the Marketplace section. CLICK HERE to read the full article.

The photo was snapped January 25, 2010 when Miller competed during the slalom of the FIS Alpine Skiing World Cup in Wengen, Switzerland. For the second year in a row, RE/MAX sponsored the event in Wengen and in Kransjka Gora, Slovenia.

RE/MAX will get even more exposure during the Olympics.

Thank you RE/MAX The power of the brand is always at work!

“As bad as the 2009 numbers are, they probably would have been worse if not for legislative and industry-related delays in processing delinquent loans,” said James Saccacio, chief executive officer of RealtyTrac.

Saccacio said that monthly foreclosure filings hit their peak in July, then declined for four months before rebounding at years end. He said trial loan modifications, state legislation extending the foreclosure process and an overwhelming volume of inventory clogging the foreclosure pipeline were the main factors contributing to the second-half declines.

But “in the long term, a massive supply of delinquent loans continues to loom over the housing market, and many of those delinquencies will end up in the foreclosure process in 2010 and beyond, as lenders gradually work their way through the backlog,” he said.

There were a record 41,000 single-family home foreclosures in the Phoenix area last year. A new Realty Studies report from the Arizona State University’s W.P. Carey School of Business and ASU economist Jay Butler also said there were 4,000 foreclosures in Phoenix in December and 3,000 in November.

Median home price in the area was $140,000 in December compared to $148,600 in December 2008.

There were also 600 condos that were foreclosed on in December versus 285 such defaults in 2008.

Butler said the rebound of Phoenix’s housing market remains elusive to many.

“Recovery is a perception issue,” said Butler. “Some people believe they will see recovery when their home values are back where they were, and that’s going to take a long time. As for the economic recovery, Phoenix-area layoffs are still coming, and there’s an expectation interest rates may get higher, so the housing market will probably bounce around for a while longer.”

The Pending Home Sales Index, a forward-looking indicator based on contracts signed in October, increased 3.7 percent to 114.1 from 110.0 in September, and is 31.8 percent above October 2008 when it was 86.6. The rise from a year ago is the biggest annual increase ever recorded for the index, which is at the highest level since March 2006 when it was 115.2.

“Home sales are experiencing a pendulum swing.” said Lawrence Yun, NAR chief economist “Keep in mind that housing had been underperforming over most of the past year. Based on the demographics of our growing population, 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.

“Still, as inventories continue to decline and balance is gradually restored between buyers and sellers, we should reach self-sustaining housing conditions and firming home prices in most areas around the middle of 2010. That would mean broad wealth stabilization for the vast number of middle-class families,” Lawrence Yun said.

The good news continues to pile up this year for Gilbert. In the annual heads of households survey 97 percent expressed satisfaction with the town of Gilbert.  Also, 2009 showed a great deal of community involvement.  The Gilbert days parade was revived by its citizens after being canceled due to a lack of funding, also there was an uptick in participation at community events such as block parties and watch programs.

If you would like to learn more about Gilbert AZ please visit GilbertAZ.com

For questions concerning relocating to Gilbert please contact the Reeves Team.

A short sale is the final step a homeowner may take before giving up on a house and letting it slide into foreclosure.  However, in the past the foreclosure process has been time consuming and has not delivered the desired results.  Currently 3 out of 4 houses that start the short sale process end up failing and falling into foreclosure.  If the process does close it takes on average 8 months before the transaction is complete, this makes if frustrating not only for the seller but for the buyer as well.

The new plan A lender must give a yes or a no answer to an offer within 10 days.  It will also offer incentives to sellers buyers and lenders to complete the transaction.  The incentives include:

• Borrowers would receive $1,500 from the government in relocation expenses.
  
• Servicers receive $1,000 from the government per transaction.
  
• Second liens holders can receive up to $3,000 of the sales proceeds for releasing their liens.
  
• First lien investors can receive $1,000 from the government for signing off on payments to subordinate lien holders.
  
• Borrowers must be fully released from any further liability.

More information will be released shortly.

If you have any questions on the new program please contact Remax Alliance.

What is an FHA 203k Loan?

The FHA 203k renovation loan program provides the funds for both the purchase and renovation of a home packaged into one mortgage loan. Once the home purchase is closed, the funds are held in escrow to pay for pre-determined renovation work done by approved renovation contractors.

The purchase of a house that needs repair is often a catch-22 situation, because the bank won’t lend the money to buy the house until the repairs are complete, and the repairs can’t be done until the house has been purchased.

HUD’s 203(k) program can help you overcome this obstacle by enabling you to borrow funds for the purchase or refinance of a property plus the cost of making the repairs and improvements in one mortgage. The FHA-insured 203(k) loan is provided through approved lenders nationwide and is available to owners who will occupy the home themselves.

Down payment, credit qualification, loan limits and other requirements are the same as standard FHA loans. Additional guidelines are set forth specific to 203k loans to provide for renovation of the home.

How many types of 203k loans exist?

1. The Standard 203k is intended for more complicated projects that involve structural changes, such as room additions, exterior grading and landscaping, or renovation that would prohibit you from occupying the residence. A Standard 203k is also used if your project requires engineering or architectural drawings and inspections.
2. The Streamlined 203k is designed for less extensive improvements and for projects that will not exceed a total of $35,000 in renovation and related expenses. This version does not require the use of a consultant, architect, and engineer or as many inspections as the Standard 203k. As a result, when applicable, the Streamlined 203k generally becomes the simpler, less costly option.

Does the 203k program work for Single-family homes?

No. This program is eligible for use on 1 to 4 unit buildings only.

How does the appraisal work?
The appraiser is given a copy of the contractors bid documents to identify the repairs and remodeling to be done along with their costs. The appraiser then determines the value of the home after completion, “subject to” the improvements to be made. Up to 110% of this value may be used for loan approval purposes.

Can Investors Use a 203k?

A 203k loan is for use by owner occupants, local governments or  non-profits. However, an owner occupant can use a 203k loan to purchase and renovate up to a 4-unit building as well as multi-use building in some situations.

Is there a time limit for renovation of the property?

The renovation must begin within 30 days of the closing of the loan and must be completed within the time frame established in the loan agreement. The total time for renovation must not exceed six months.

“The Deed for Lease Program provides an additional option for qualifying homeowners who are facing foreclosure and are not eligible for modifications,” said Jay Ryan, Vice President of Fannie Mae. “This new program helps eliminate some of the uncertainty of foreclosure, keeps families and tenants in their homes during a transitional period, and helps to stabilize neighborhoods and communities.”

Many see this as a calculated bet from Fannie Mae, that home prices will be higher another year into the economic recovery.  The question that remains is, will it work?  Big banks got into this crisis by over leveraging themselves during the subprime mortgage days.  This move sees them once again putting all their eggs in one basket and betting on a rise in home values.

Fannie Mae will not have to list the homes as “for sale” so on their books they will show a revenue increase and will not have to write off the loss.  This will also make the ever growing shadow inventory even more complicated to dissect.  Many economists guess the number of homes that are currently foreclosed on but have not yet been listed on the market at over 7 million.  The move by Fannie Mae will significantly increase the shadow inventory, but it will be difficult to know by how much, given that the house will not technically be foreclosed on until the lease runs out.

If the bet pays off, it could be a win/win.  The homeowner will have cheap rent for at least one year, while Fannie Mae will take less of a loss when they do finally sell the house.  If however the shadow inventory starts making news and home prices decline even further, tax payers will be left with the bill. Again.

Besides the extension their are other major changes that should not be overlooked.

Expansion of the tax credit – The homebuyer credit is no longer limited to first-time homebuyers. Homebuyers who have owned a home for 5 of the last 8 years will qualify for a tax credit of as much $6,500. The 5 years of ownership must be consecutive years and the home must be the buyer’s principal residence. The credit is available for purchases made after Nov. 6, 2009 and before May 1, 2010.

Higher Income Limits – Prior to these changes the tax credit phase-out range was a Modified Adjusted Gross Income (MAGI) of $75,000 – $95,000 (for single taxpayers) and $150,000 – $170,000 (for married taxpayers). Under the new legislation, the MAGI ranges change to $125,000 – $145,000 (for single taxpayers) and $225,000 – $245,000 (for married taxpayers).

Home purchased for more than $800,000 after Nov. 6, 2009 do not qualify for either the $8,000 or the $6,500 tax credits. Also, homes purchased from in-laws after Nov. 6, 2009 do not qualify for either credit.

Dependents of taxpayers under the age of 18 do not qualify for the tax credits.