Homebuyer’s tax credit update
There was some encouraging news on the extension of the $8000 tax credit for first time buyers. The Senate reached an agreement to extend the tax credit and added a $6500 tax credit for other primary home buyers. They also raised the qualifying income limits, in a meaningful way, increasing single taxpayer’s income from $75,000 to $125,000 and joint taxpayer’s income from $150,000 to $250,000. Buyers must have an executed purchase agreement by April 30, 2010 and will have to close by June 30, 2010. More details are likely to come. Changes may occur in the reconciliation of the bill with the House and when voting takes place. The White House is strongly in favor of an extension of the tax credit especially for first time buyers.
Appraisal Reforms My Be Terminated
According to Ken Harney of The Washington Post in his recent column, the Home Valuation Code of Conduct (HVCC) could be on its way out. A bi-partisan amendment was approved October 22 by the House Financial Services Committee. The “Home Valuation Code of Conduct” would be terminated early in the existence of a proposed new Consumer Financial Protection Agency. The agency’s director would replace the code with a new procedure. The code was implemented last May as a firewall between lenders and appraisers to remove any collusion and inflated value. HVCC has created appraisal management companies which in some cases, collects fees from borrowers, pays appraisers reduced fees for their appraisals and pockets the difference. This practice has resulted in inferior quality appraisals. Some management companies hire inexperienced personal willing to work for lower fees and appraisers unfamiliar with the areas they are assigned to appraise. There have been many complaints since HVCC’s inception. In Michigan, The National Association of Home Builders contends the code is impeding new construction as well. More than half of the 500 builders who responded to a recent survey said at least one of their new homes was appraised at less than the cost of construction. On the other hand, Freddie Mac stated on October 20th the quality of appraisals has improved.
Personally, I think the system could use some tweaking. I have recently received low value appraisals. It has been a difficult and arduous process to get the appraisers to reconsider the values. You would think a buyer and seller agreeing to a sales price would also influence home values! I am certain we can come up with a better system that will allow independence between appraisers, Realtors, borrowers and lenders.
PHH Corporation names Jerome Selitto CEO
An issue close me, David Wolsky. My company, PHH Mortgage hires a new CEO. Veteran Industry Leader Brings to PHH Successful Track Record of Innovation, Transformation and Value Creation in Mortgage Business
MT. LAUREL, N.J. – October 26, 2009 – The Board of Directors of PHH Corporation (NYSE: PHH) today announced that Jerome J. Selitto has been named President and Chief Executive Officer and appointed to the Board of Directors, effective immediately. George Kilroy, who in June had stepped in on an interim basis as Acting President and CEO of PHH, will continue to lead the company’s fleet management business and serve as a member of the company’s Board of Directors.
Mr. Selitto brings to PHH nearly forty years of experience in the mortgage industry and in capital markets, as well as a long and successful track record of building companies that have created value by transforming key sectors of the home lending market. Mr. Selitto served most recently as a senior consultant and then member of the senior management team of mortgage industry software provider Ellie Mae and, before that, as Chief Executive Officer of DeepGreen Financial, the groundbreaking online home equity lender that he helped found. Earlier, he launched and helped lead mortgage insurance company Amerin Guaranty Corporation (now Radian Guaranty) and held senior leadership positions at First Chicago Corporation, PaineWebber and Kidder, Peabody & Co.
Jim Egan, Chairman of the PHH Corporation Board of Directors said, “Jerry Selitto is an innovative leader with a proven ability to drive change in an organization and execute transformational strategies that create value for its stakeholders. Jerry was the architect of two companies in the mortgage industry that created distinctive competitive advantages, found innovative and cost-efficient ways to serve their customers and created new opportunities to generate revenue. We are confident that his strategic vision, leadership ability and experience re-designing corporate processes will drive increased value across our mortgage and fleet management businesses and help take PHH to a new level of success.”
Mr. Selitto said, “I am thrilled to have the opportunity to join PHH. This is a great company with valuable assets, talented employees, world-class clients, and significant opportunities for growth. PHH’s mortgage and fleet management businesses are well-positioned in the marketplace, and I look forward to working closely with my colleagues across the company to create new opportunities and significant value for our shareholders, customers and employees.”
Economic Update For The Week of November 2nd
This is a big week for economic information. The Federal Reserve Open Market Committee meets on Tuesday and their monetary policy statement is released on Wednesday. On Friday, we have the jobs report which is an important report especially with unemployment hovering around 10%. Some good news in our industry, the house and senate voted on Friday for a one year extension of higher loan limits for FHA, Fannie Mae and Freddie Mac. The limit in Pima County is $316,250 for FHA and $417,00 for Fannie and Freddie. Expect a vote this week for an extension of the $8000 tax credit which should stimulate housing for the first quarter of 2010. Pending home sales were up 6.1% in October. It’s the eight straight month with an increase thanks in large part to the $8000 tax credit. It is a great time to be a home buyer!
