One of our clients contacted us last week asking if we were familiar with an FHA loan offering with a super low interest rate of 4 7/8 %. He had received a letter in the mail with government-type headings/logos, using the pretext of the government's stimulus bill as the reason behind the low interest rate.
The closing costs seemed super high so he wondered if we had heard of this program. We had not and told him to proceed with caution but only after checking with several other mortgage professionals the team had experience with and trusted.
When he called the number on the letter for more information, they finally admitted that this was not an FHA loan, and the very low rate of 4 7/8% had a point included in the closing costs.
He asked that we let other clients know there are still unscrupulous loan folks out there trying to take advantage so remember….
If it sounds too good to be true, it probably is! Be careful out there.
Questions? Concerns? Contact us and we’ll help. That’s what we are here for.
Tuesday, August 25, 2009
Saturday, August 8, 2009
How to Get the First-Time Home Buyer Tax Credit
This article is from the Realtor.org Essentials for August, 2009:
You've decided to purchase a home and take advantage of the 2009 First-Time Home Buyer Tax Credit. Here's what you have to do to get your benefit:
Close on your home purchase by November 30, 2009,
Ensure that you are a qualified first-time buyer under IRS guidelines,
Decide which year to file under, 2008 or 2009,
File an amended 2008 return or choose to apply the credit to your 2009 tax return.
Deciding When to Apply the Credit
If you want the benefits of your credit as soon as possible:
You might choose to file under your 2008 tax year. Since April 15 has already passed, you would have to file an amendment to your return. However, if you've already filed for an extension of your 2008 return, then you can simply claim the credit when you submit your return.
If you anticipate a drop in income next year:
You can wait to claim the credit as part of your 2009 filing. In some cases the value of the credit might be higher, particularly if in 2008 you qualify for only a partial credit because your income is over $75,000 (single) or $150,000 (joint).
Your Next Steps
Once you have determined which year to apply the tax credit, you will need to do two things to claim the credit:
1. Fill out Form 5405 to determine the amount of your available credit, and
2. File an amended return for your 2008 taxes, or wait and apply to credit when you file your 2009 tax return.
You've decided to purchase a home and take advantage of the 2009 First-Time Home Buyer Tax Credit. Here's what you have to do to get your benefit:
Close on your home purchase by November 30, 2009,
Ensure that you are a qualified first-time buyer under IRS guidelines,
Decide which year to file under, 2008 or 2009,
File an amended 2008 return or choose to apply the credit to your 2009 tax return.
Deciding When to Apply the Credit
If you want the benefits of your credit as soon as possible:
You might choose to file under your 2008 tax year. Since April 15 has already passed, you would have to file an amendment to your return. However, if you've already filed for an extension of your 2008 return, then you can simply claim the credit when you submit your return.
If you anticipate a drop in income next year:
You can wait to claim the credit as part of your 2009 filing. In some cases the value of the credit might be higher, particularly if in 2008 you qualify for only a partial credit because your income is over $75,000 (single) or $150,000 (joint).
Your Next Steps
Once you have determined which year to apply the tax credit, you will need to do two things to claim the credit:
1. Fill out Form 5405 to determine the amount of your available credit, and
2. File an amended return for your 2008 taxes, or wait and apply to credit when you file your 2009 tax return.
Saturday, August 1, 2009
San Francisco Real Estate Market is Stable and Improving!
This just in from the SF MLS:
As reported earlier, the nationally recognized real estate economic consulting firm of Rosen Consulting Group has been retained by the Association to prepare monthly reports on the condition of the San Francisco economy and the residential real estate market and to issue them to the press with accompanying press releases. The monthly reports will include the following:
Analyses of various for-sale housing statistics, utilizing housing data provided by Terradatum:
Median home price and change in home prices;
Average days on the market;
Month’s supply of inventory; and
The number of homes for sale on the market.
Rosen Consulting Group’s view of the current housing and mortgage markets.
A brief description of the employment situation in San Francisco, using employment data from the Bureau of Economic Analysis.
The July report is imbedded within this blog.
As reported earlier, the nationally recognized real estate economic consulting firm of Rosen Consulting Group has been retained by the Association to prepare monthly reports on the condition of the San Francisco economy and the residential real estate market and to issue them to the press with accompanying press releases. The monthly reports will include the following:
Analyses of various for-sale housing statistics, utilizing housing data provided by Terradatum:
Median home price and change in home prices;
Average days on the market;
Month’s supply of inventory; and
The number of homes for sale on the market.
Rosen Consulting Group’s view of the current housing and mortgage markets.
A brief description of the employment situation in San Francisco, using employment data from the Bureau of Economic Analysis.
The July report is imbedded within this blog.
Saturday, June 6, 2009
HUD provides more details on how the $8,000 tax credit can be used.
May 29, 2009
MORTGAGEE LETTER 2009-15
TO: ALL APPROVED MORTGAGEES
SUBJECT: Using First-Time Homebuyer Tax Credits
The American Recovery and Reinvestment Act of 2009 (Recovery Act) provides for as much as an $8000 tax credit to qualified first-time homebuyers. FHA supports this important initiative to promote homeownership. This mortgagee letter provides:
· Basic information on the first-time homebuyer credit obtained from the Internal Revenue Service (IRS) website. Complete information on how the first time homebuyer tax credit works, including the eligibility requirements for the tax credit, the amount of the tax credit that a first-time homebuyer may be eligible to receive, and how a homebuyer may claim the tax credit is available on the IRS website at http://www.irs.gov/newsroom/article/0,,id=204671,00.html?portlet7.
· Guidance on how FHA-approved mortgagees and FHA-approved nonprofit organizations as well as Federal, state, and local government agencies or instrumentalities may assist homebuyers that are eligible for the tax credit.
I. About the First-Time Homebuyer Tax Credit
Please check the IRS website to ensure you have up-to-date information. A brief overview of the tax credit from the IRS website and a copy of IRS Form 5405 (including instructions) are attached for reference.
Pursuant to 31 U.S.C. 3727 and 26 U.S.C. 6402, a refund of the first-time homebuyer credit will be made by the IRS only to the taxpayer, not to a third party. In other words, any refund issued in response to a claim for this credit cannot be assigned by a taxpayer to a third party.
II. FHA Tax Credit Guidance
Secondary Financing
Consistent with existing FHA policy, FHA will permit entities covered by Section 528 of the National Housing Act to use the current authority to offer tax credit advances with second liens in a manner consistent with the requirements in 12 U.S.C. 1709(b)(9). Eligible government agencies and instrumentalities of government are described in handbook HUD-4155.1 5.C3 and 5.C4.
Conditions:
· The tax credit advance, when combined with the FHA-insured first mortgage may not result in cash back to the borrower.
· The second lien may not exceed the total amount needed for the down payment, closing costs, and prepaid expenses.
· Secondary financing may be “soft” (silent) or require a monthly repayment.
· If payments are required, they must be included within the qualifying ratios and, when combined with the first mortgage, cannot exceed the borrower’s reasonable ability to pay.
· Payments must be deferred for at least 36 months to not be included in the qualifying ratios.
· If the tax credit advance loan has a short term for repayment, it must also provide that if the borrower fails to repay by the designated deadline, principal and interest payments begin automatically or the loan converts to a “soft” second.
· The secondary financing may not require a balloon payment before ten years.
Purchase of Tax Credit
FHA-approved mortgagees and FHA-approved nonprofit organizations as well as Federal, state, and local governmental agencies and instrumentalities thereof may purchase the tax credit anticipated by the homebuyer.
Conditions:
· The proceeds of the sale of the tax credit may not exceed the anticipated tax credit due the homebuyer based on the computations of form IRS 5405;
· The borrower must submit a signed certification that the tax credit is not subject to offset due to other indebtedness.
· A copy of the borrower’s tax refund and/or the IRS 5405 must be collected and retained in the FHA case binder.
· Any costs attendant to the purchase of the tax credit are to be nominal and discounting the anticipated credit to cover the costs and expenses of the transaction must be reasonable and disclosed to the homebuyer. In FHA’s view, fees and costs that total more than 2.5% of the anticipated credit are considered excessive. (Example: $6000 to be refunded, with all fees and costs discounted, borrower should receive not less than $5850.00 for sale of tax credit.)
· Pursuant to 12 U.S.C. 1709(b)(9), the homebuyer’s downpayment required for eligibility for FHA insurance may not consist of any funds (including funds derived from a sale of the homebuyer tax credit) provided by the mortgagee, the seller, or any other person or entity that financially benefits from the transaction (or by any third party or entity that is reimbursed, directly or indirectly, by the financially benefiting person or entity). Accordingly, the proceeds of the sale of the tax credit to FHA approved mortgagees, the seller, or any other person or entity that financially benefits from the transaction (or any third party or entity that is reimbursed, directly or indirectly, by the financing benefiting person or entity), may not be used to meet the 3.5% minimum downpayment, but may be used as additional downpayment, buying down of interest rate, or other closing costs.
Due Diligence
FHA expects that entities purchasing tax credit assets will employ appropriate due diligence measures including, but not limited to:
· Require the homebuyer to draft and provide the IRS form 5405 “First-Time Homebuyer Credit.”
· Contact the borrower’s employer and review pay stubs to confirm there are no outstanding garnishments.
· Review the homebuyer’s credit report to ensure there are no unpaid student loans, or other obligations that could be offset against the credit.
· Validate that all of the eligibility requirements for the tax credit are fulfilled
· Review previous tax returns and IRS tax assessment letters, if any, to determine that the borrower does not have unsettled obligations to the IRS
III. Monitoring
In order to track the tax credit monetization activities, FHA will require FHA-approved mortgagees to input into FHA Connection the following data:
· Name and EIN of the party who purchased the tax credit,
· The amount of the anticipated credit, and
· The amount the homebuyer paid for the monetization services.
The lender must also collect and maintain in the FHA case file the documentation that validates all of the tax credit monetization data submitted via FHA Connection.
FHA will monitor the purchase of tax credit transactions closely. Charging of excessive fees or costs in the purchase of the tax credit or increasing other fees or charges in the transaction without FHA approval may result in referral to the Mortgagee Review Board, and particularly with respect to entities that are not FHA-approved mortgagees, referral to the Federal Trade Commission, or referral to the appropriate State Attorney General office, as may be applicable.
If you have any questions regarding this mortgagee letter, please call FHA’s Resource Center at 1-800-CALL-FHA (1-800-225-5342). Persons with hearing or speech impairments may access this number via TDD/TTY by calling 1-877-TDD-2HUD (1-877-833-2483).
Sincerely,
Brian D. Montgomery
Assistant Secretary for Housing-
Federal Housing Commissioner
Attachments
IRS Form 5405
IRS Tax Credit Summary
MORTGAGEE LETTER 2009-15
TO: ALL APPROVED MORTGAGEES
SUBJECT: Using First-Time Homebuyer Tax Credits
The American Recovery and Reinvestment Act of 2009 (Recovery Act) provides for as much as an $8000 tax credit to qualified first-time homebuyers. FHA supports this important initiative to promote homeownership. This mortgagee letter provides:
· Basic information on the first-time homebuyer credit obtained from the Internal Revenue Service (IRS) website. Complete information on how the first time homebuyer tax credit works, including the eligibility requirements for the tax credit, the amount of the tax credit that a first-time homebuyer may be eligible to receive, and how a homebuyer may claim the tax credit is available on the IRS website at http://www.irs.gov/newsroom/article/0,,id=204671,00.html?portlet7.
· Guidance on how FHA-approved mortgagees and FHA-approved nonprofit organizations as well as Federal, state, and local government agencies or instrumentalities may assist homebuyers that are eligible for the tax credit.
I. About the First-Time Homebuyer Tax Credit
Please check the IRS website to ensure you have up-to-date information. A brief overview of the tax credit from the IRS website and a copy of IRS Form 5405 (including instructions) are attached for reference.
Pursuant to 31 U.S.C. 3727 and 26 U.S.C. 6402, a refund of the first-time homebuyer credit will be made by the IRS only to the taxpayer, not to a third party. In other words, any refund issued in response to a claim for this credit cannot be assigned by a taxpayer to a third party.
II. FHA Tax Credit Guidance
Secondary Financing
Consistent with existing FHA policy, FHA will permit entities covered by Section 528 of the National Housing Act to use the current authority to offer tax credit advances with second liens in a manner consistent with the requirements in 12 U.S.C. 1709(b)(9). Eligible government agencies and instrumentalities of government are described in handbook HUD-4155.1 5.C3 and 5.C4.
Conditions:
· The tax credit advance, when combined with the FHA-insured first mortgage may not result in cash back to the borrower.
· The second lien may not exceed the total amount needed for the down payment, closing costs, and prepaid expenses.
· Secondary financing may be “soft” (silent) or require a monthly repayment.
· If payments are required, they must be included within the qualifying ratios and, when combined with the first mortgage, cannot exceed the borrower’s reasonable ability to pay.
· Payments must be deferred for at least 36 months to not be included in the qualifying ratios.
· If the tax credit advance loan has a short term for repayment, it must also provide that if the borrower fails to repay by the designated deadline, principal and interest payments begin automatically or the loan converts to a “soft” second.
· The secondary financing may not require a balloon payment before ten years.
Purchase of Tax Credit
FHA-approved mortgagees and FHA-approved nonprofit organizations as well as Federal, state, and local governmental agencies and instrumentalities thereof may purchase the tax credit anticipated by the homebuyer.
Conditions:
· The proceeds of the sale of the tax credit may not exceed the anticipated tax credit due the homebuyer based on the computations of form IRS 5405;
· The borrower must submit a signed certification that the tax credit is not subject to offset due to other indebtedness.
· A copy of the borrower’s tax refund and/or the IRS 5405 must be collected and retained in the FHA case binder.
· Any costs attendant to the purchase of the tax credit are to be nominal and discounting the anticipated credit to cover the costs and expenses of the transaction must be reasonable and disclosed to the homebuyer. In FHA’s view, fees and costs that total more than 2.5% of the anticipated credit are considered excessive. (Example: $6000 to be refunded, with all fees and costs discounted, borrower should receive not less than $5850.00 for sale of tax credit.)
· Pursuant to 12 U.S.C. 1709(b)(9), the homebuyer’s downpayment required for eligibility for FHA insurance may not consist of any funds (including funds derived from a sale of the homebuyer tax credit) provided by the mortgagee, the seller, or any other person or entity that financially benefits from the transaction (or by any third party or entity that is reimbursed, directly or indirectly, by the financially benefiting person or entity). Accordingly, the proceeds of the sale of the tax credit to FHA approved mortgagees, the seller, or any other person or entity that financially benefits from the transaction (or any third party or entity that is reimbursed, directly or indirectly, by the financing benefiting person or entity), may not be used to meet the 3.5% minimum downpayment, but may be used as additional downpayment, buying down of interest rate, or other closing costs.
Due Diligence
FHA expects that entities purchasing tax credit assets will employ appropriate due diligence measures including, but not limited to:
· Require the homebuyer to draft and provide the IRS form 5405 “First-Time Homebuyer Credit.”
· Contact the borrower’s employer and review pay stubs to confirm there are no outstanding garnishments.
· Review the homebuyer’s credit report to ensure there are no unpaid student loans, or other obligations that could be offset against the credit.
· Validate that all of the eligibility requirements for the tax credit are fulfilled
· Review previous tax returns and IRS tax assessment letters, if any, to determine that the borrower does not have unsettled obligations to the IRS
III. Monitoring
In order to track the tax credit monetization activities, FHA will require FHA-approved mortgagees to input into FHA Connection the following data:
· Name and EIN of the party who purchased the tax credit,
· The amount of the anticipated credit, and
· The amount the homebuyer paid for the monetization services.
The lender must also collect and maintain in the FHA case file the documentation that validates all of the tax credit monetization data submitted via FHA Connection.
FHA will monitor the purchase of tax credit transactions closely. Charging of excessive fees or costs in the purchase of the tax credit or increasing other fees or charges in the transaction without FHA approval may result in referral to the Mortgagee Review Board, and particularly with respect to entities that are not FHA-approved mortgagees, referral to the Federal Trade Commission, or referral to the appropriate State Attorney General office, as may be applicable.
If you have any questions regarding this mortgagee letter, please call FHA’s Resource Center at 1-800-CALL-FHA (1-800-225-5342). Persons with hearing or speech impairments may access this number via TDD/TTY by calling 1-877-TDD-2HUD (1-877-833-2483).
Sincerely,
Brian D. Montgomery
Assistant Secretary for Housing-
Federal Housing Commissioner
Attachments
IRS Form 5405
IRS Tax Credit Summary
Friday, May 29, 2009
HUD reverses plan to allow use of $8000 tax credit for downpayment
On May 14th, HUD announced that first-time homebuyers would soon be able to access their $8,000 federal tax credit when closing on a home through a short-term bridge loan that will cover their down payment on FHA-backed loans.
HUD officials on Monday, May 18th reversed this earlier decision and details backing the 5/14 announcement were withdrawn from the HUD website.
Despite favorable reaction from the real estate industry to the bridge-loan proposal, not everyone was in favor of using the tax credit as collateral on a down-payment loan.
The loans also could have potentially created income-tax issues, according to the IRS officials who derailed HUD's plan.
This doesn't mean that HUD and lawmakers will not allow this in the future. Stay tuned - we'll keep you posted!
HUD officials on Monday, May 18th reversed this earlier decision and details backing the 5/14 announcement were withdrawn from the HUD website.
Despite favorable reaction from the real estate industry to the bridge-loan proposal, not everyone was in favor of using the tax credit as collateral on a down-payment loan.
The loans also could have potentially created income-tax issues, according to the IRS officials who derailed HUD's plan.
This doesn't mean that HUD and lawmakers will not allow this in the future. Stay tuned - we'll keep you posted!
Saturday, May 23, 2009
NEW FEDERAL LAW AFFECTING DISTRESSED PROPERTIES
This week, President Barack Obama signed into law the Helping Families Save Their Homes Act of 2009 to help homeowners and lenders avoid foreclosure. Previously included in this bill was a measure to allow bankruptcy judges to modify mortgage loans for principal residences, but the U.S. Senate did not pass this "cram-down" legislation.
The Helping Families Save Their Homes Act of 2009 contains various new laws to address the national foreclosure crisis. Major provisions that may affect you include the following:
HOPE FOR HOMEOWNERS (H4H) REVAMPED: The new law loosens the H4H program requirements to help homeowners refinance out of their troubled mortgages and into more affordable, fixed-rate FHA-insured loans. Originally launched in October 2008, the H4H program intended to help 400,000 distressed homeowners, but in the program's first seven months, it only helped one family stay in its home. The maximum loan-to-value ratio for an FHA refinance is 96.5% of the appraised value. If refinance proceeds are insufficient to pay off existing liens, the existing lienholders must voluntarily agree to a short payoff, but a new inducement is an opportunity for them to share in the homeowner's equity. Other changes to the H4H program include monetary incentives for both the participating servicers of the existing loans and originators of the FHA refinance. Millionaire borrowers (with net worth over $1 million) are now excluded from the program. HUD will establish the requirements and standards to implement the H4H program as revised.
LONGER STAY FOR TENANTS OF FORECLOSED HOMES: Effective immediately, an REO lender or buyer who acquires title through a foreclosure sale must give at least a 90-day notice to terminate a bona fide tenant as defined. A 90-day notice to terminate is sufficient for a month-to-month tenant or if a new owner will occupy the property as a primary residence at the end of the 90 days. Otherwise, a tenant with a one year or other fixed-term lease with a remaining lease term exceeding 90 days can stay in the premises until the remaining lease term ends. This new 90-day notice requirement applies to foreclosures of a federally-related mortgage loan or residential real property, except for properties under rent control, rent-subsidized programs (such as Section 8), or other state laws that provide additional protections for tenants. This law expires on December 31, 2012.
NOTIFICATION OF TRANSFER OF MORTGAGE LOANS: The Truth in Lending Act now requires a lender to whom a mortgage loan is sold or otherwise transferred to notify the borrower in writing of such transfer within 30 days. The notice must include the new lender's identity, address, telephone number, authorized representative's contact information, and other relevant information. This measure should help alleviate the problem borrowers often face in determining who owns their mortgage loans.
Other provisions of the Helping Families Save Their Homes Act include a 4-year extension of the $250,000 FDIC deposit insurance to December 31, 2013, protection for loan servicers who establish qualified loss mitigation plans from liability for an alleged breach of duty to maximize mortgage values for their investors, $130 million for foreclosure prevention counseling and education, and $2.2 billion to strengthen homeless programs.
President Obama has also signed into law the Fraud Enforcement and Recovery Act (FERA) which authorizes the Department of Justice to prosecute mortgage fraud crimes against private mortgage brokers and companies that previously were not regulated by the federal government. FERA also earmarks almost $500 million for federal enforcement agencies to investigate and prosecute mortgage fraud and other fraud crimes.
The Helping Families Save Their Homes Act of 2009 contains various new laws to address the national foreclosure crisis. Major provisions that may affect you include the following:
HOPE FOR HOMEOWNERS (H4H) REVAMPED: The new law loosens the H4H program requirements to help homeowners refinance out of their troubled mortgages and into more affordable, fixed-rate FHA-insured loans. Originally launched in October 2008, the H4H program intended to help 400,000 distressed homeowners, but in the program's first seven months, it only helped one family stay in its home. The maximum loan-to-value ratio for an FHA refinance is 96.5% of the appraised value. If refinance proceeds are insufficient to pay off existing liens, the existing lienholders must voluntarily agree to a short payoff, but a new inducement is an opportunity for them to share in the homeowner's equity. Other changes to the H4H program include monetary incentives for both the participating servicers of the existing loans and originators of the FHA refinance. Millionaire borrowers (with net worth over $1 million) are now excluded from the program. HUD will establish the requirements and standards to implement the H4H program as revised.
LONGER STAY FOR TENANTS OF FORECLOSED HOMES: Effective immediately, an REO lender or buyer who acquires title through a foreclosure sale must give at least a 90-day notice to terminate a bona fide tenant as defined. A 90-day notice to terminate is sufficient for a month-to-month tenant or if a new owner will occupy the property as a primary residence at the end of the 90 days. Otherwise, a tenant with a one year or other fixed-term lease with a remaining lease term exceeding 90 days can stay in the premises until the remaining lease term ends. This new 90-day notice requirement applies to foreclosures of a federally-related mortgage loan or residential real property, except for properties under rent control, rent-subsidized programs (such as Section 8), or other state laws that provide additional protections for tenants. This law expires on December 31, 2012.
NOTIFICATION OF TRANSFER OF MORTGAGE LOANS: The Truth in Lending Act now requires a lender to whom a mortgage loan is sold or otherwise transferred to notify the borrower in writing of such transfer within 30 days. The notice must include the new lender's identity, address, telephone number, authorized representative's contact information, and other relevant information. This measure should help alleviate the problem borrowers often face in determining who owns their mortgage loans.
Other provisions of the Helping Families Save Their Homes Act include a 4-year extension of the $250,000 FDIC deposit insurance to December 31, 2013, protection for loan servicers who establish qualified loss mitigation plans from liability for an alleged breach of duty to maximize mortgage values for their investors, $130 million for foreclosure prevention counseling and education, and $2.2 billion to strengthen homeless programs.
President Obama has also signed into law the Fraud Enforcement and Recovery Act (FERA) which authorizes the Department of Justice to prosecute mortgage fraud crimes against private mortgage brokers and companies that previously were not regulated by the federal government. FERA also earmarks almost $500 million for federal enforcement agencies to investigate and prosecute mortgage fraud and other fraud crimes.
Sunday, May 17, 2009
Santa Clara County Flood Insurance Rate Maps Released
The Federal Emergency Management Agency (FEMA) has issued revised Flood Insurance Rate Maps (FIRMs) for all of Santa Clara County that become effective on Monday, May 18, 2009. These maps show areas that are considered to be in a floodplain, and therefore may require homeowners to obtain flood insurance. Flood zone disclosure is a statutory requirement in California real estate transactions.
The revised FEMA maps will expand the 100-year flood zone and affect residential parcels in Palo Alto near Foothill Expressway, in Cupertino near Heney Creek Place, and in San Jose near Zanker Road and Component Drive, and Kingston Way and Manitoba Drive. In some areas, the 100-year flood zone will be reduced in size and parcels will be removed.
Prospective home buyers may wish to check with their insurance agent to see if the property's flood zone, and insurance requirements, will be affected by the map changes. To comply with federal law and to obtain the lowest available rate, owners drawn into a higher-risk zone must purchase flood insurance before the new maps become effective on May 18, 2009.
NOTE TO AGENTS: Where escrows are currently open in the affected areas, agents may wish to consider the impact that added flood insurance costs may have on the borrower's loan qualifications. In addition, where properties are drawn into a high-risk flood zone, building permits for future construction may require design standards that minimize flood risk, which could increase project cost. This development impact, and the insurance requirement triggered by the new flood zones, are material facts in real estate disclosure where properties are affected.
More information about...
- the flood map changes and how they may affect your clients
- insurance requirements which these changes may trigger
- opportunities that may benefit your clients with lowered flood insurance costs
- disclosure compliance
- how to view the new FEMA maps online
...is at the link below:
http://www.fanhd.com/Portals/0/fanhd/pdf/SantaClara_FEMAmaps_May2009.pdf
The revised FEMA maps will expand the 100-year flood zone and affect residential parcels in Palo Alto near Foothill Expressway, in Cupertino near Heney Creek Place, and in San Jose near Zanker Road and Component Drive, and Kingston Way and Manitoba Drive. In some areas, the 100-year flood zone will be reduced in size and parcels will be removed.
Prospective home buyers may wish to check with their insurance agent to see if the property's flood zone, and insurance requirements, will be affected by the map changes. To comply with federal law and to obtain the lowest available rate, owners drawn into a higher-risk zone must purchase flood insurance before the new maps become effective on May 18, 2009.
NOTE TO AGENTS: Where escrows are currently open in the affected areas, agents may wish to consider the impact that added flood insurance costs may have on the borrower's loan qualifications. In addition, where properties are drawn into a high-risk flood zone, building permits for future construction may require design standards that minimize flood risk, which could increase project cost. This development impact, and the insurance requirement triggered by the new flood zones, are material facts in real estate disclosure where properties are affected.
More information about...
- the flood map changes and how they may affect your clients
- insurance requirements which these changes may trigger
- opportunities that may benefit your clients with lowered flood insurance costs
- disclosure compliance
- how to view the new FEMA maps online
...is at the link below:
http://www.fanhd.com/Portals/0/fanhd/pdf/SantaClara_FEMAmaps_May2009.pdf
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