Short Sales and Doc Stamps

Department of Revenue Releases Rules for Doc Stamps owed on Short Sales.
The Department of Revenue released an opinion on this issue Tuesday, Sept 23, 2008.
In essence the rule states that Documentary Stamps will be paid on the lower amount, NOT the amount plus the forgiven amount by the lender in an arm's length transaction between three parties.
The Department of Revenue stated " The amount paid by the purchaser, or paid or given by anyone on behalf of the purchaser, for an interest in Florida real property is consideration and subject to tax. However, when the lender cancels indebtedness of the seller, that cancellation is not included in determining the amount of consideration subject to tax under Section 201.02 Florida Statutes.

First time house buyer tax credit

For those who do not know, a tax credit is being offered to first time house buyers.
These links, which explaine the credit, are from the National association of Realtors.


http://www.realtor.org/GAPublic.nsf/files/chart_homebuyer_tax_credit_.pdf/$FILE/chart_homebuyer_tax_credit_.pdf

http://www.realtor.org/gapublic.nsf/files/hbtaxcreditqa2008.pdf/$FILE/hbtaxcreditqa2008.pdf

Mortgage Rates Declined Today

Mortgage rates have declined substantially today for the following reasons:
Investors of Mortgage Backed Securities have been reluctant to purchase FNMA and Freddie Mac securities over the past several months because of reported financial issues with both agencies.
There has always been an implied guaranty by the US Government, however foreign countries, the primary purchases of theses securities, have basically stopped purchasing because they did not feel comfortable with the "implied" guaranty for two agencies that were definitely in financial trouble.
As you know the Federal Reserve lowered their discount rate several times in the hope that mortgage rates would decline. This did not happen because investors were concerned about the credit quality and financial strength of both agencies. Therefore the spread or difference between the ten year treasury and mortgage backed securities widened to historical highs. Without this fear mortgage rates may have been up to a full point lower.
The actions by the Treasury have provided confidence in the agencies and buyers of the agency securities have stepped in dramatically today. As this is written prices have improved, it has brought interest rates below 6% today.
Please be aware there may be an increased level of volatility, ie rapid movements in rates, which typically occur when this types of dramatic changes occur in markets