CALIFORNIA TAX CREDIT UPDATE

March 25 2010, California Governor Arnold Schwarzenegger signed Assembly Bill 183, the Homebuyer Tax Credit legislation, into law.

“The positive impact of the home buyer tax credit at the federal level is clear,” Goddard said. “Nearly 40 percent of first-time home buyers said they would not have purchased a home if the federal tax credit for first-time home buyers was not offered, according to C.A.R. research conducted last year. We expect the state tax credit for home buyers to have the same impact.”

AB 183 will provide $200 million for home buyer tax credits, allocating $100 million for qualified first-time home buyers of existing homes and $100 million for purchasers of new, or previously unoccupied, homes.

The eligible taxpayer who purchases a qualified personal residence on and after May 1, 2010, and on or before Dec. 31, 2010, or who purchases a qualified principal residence on and after Dec. 31, 2010, and before Aug. 1, 2011, pursuant to an enforceable contract executed on or before Dec. 31, 2010, will be able to take the allowed tax credit. (Any home under contract by the December 31, 2010 deadline has until August 1, 2011 to close escrow.)

The credit is equal to the lesser of 5 percent of the purchase price or $10,000, in equal installments over three consecutive years. Under AB 183, purchasers will be required to live in the home for at least two years or forfeit the credit (i.e., repay it to the state).

In a written statement, California Association of Realtors President Steve Goddard said, "His actions today are the result of our efforts in Sacramento over the last several weeks as members and our team in the capital worked for the bill's passage before it landed on the governor's desk."

The state's previous home buyer tax credit program was so successful that it ran out of tax credits by the end of June 2009. Unlike last year’s legislation, AB 183 adds a tax credit for the purchase of an existing home by a first-time home buyer.

Experts feel that AB 183 will significantly contribute to the effort to stimulate jobs-creation within California's housing market by helping to incentivize the purchase of distressed properties such as foreclosed homes or short-sales. Often these homes are abandoned or have been sitting on the market for a while.

According to Goddard, "It is these homes that will require substantial rehabilitation by the new owners, which will in turn generate a tremendous increase in jobs and accessory purchases connected to home improvement activities."

The signing into law comes on the heel of news that home sales slowed in the first quarter of 2010

South Coast Botanic Garden 50th Anniversary

The South Coast Botanic Garden will commemorate its first 50 Years with an Anniversary Celebration and Open House on Saturday, April 17, 2010 from 9 A.M. to 5 P.M. Entry is free for the whole family. Residents are invited to visit the garden an they open the garden doors for an all day family event. The day will include the spring plant sale, garden community booths, children's activities, lectures, food court, music and art in the garden, guided tram and walking tours and a golfing green.

Bank of America To Cut Mortgage Debts

Bank of America Corp. released it's plans to erase as much as $3 Billion in "principal" owed by thousands of severely delinquent borrowers who owe more than their homes are worth. BofA which states will take priority, however California will be the largest block. These deliquent loans came from Bank of America's acquisition of Countrywide Financial Corp. Bank of America said it will be contact those borrowers they deem eligible for the program. The program is aimed to reduce first mortgage payments to 31% of gross household income and targeted to holders of troublesome loans, such as Option ARMs, which are adjustable rate mortgages for which borrowers had the option of making payments that did not cover the interest costs for 5 to 10 years. Here are some of the key factors of the program:

• Borrowers must demonstrate a hardship in making current payments, be at least 60 days delinquent on the loans and owe at least 120% of the current home value
• Borrowers with second mortgages or home equity lines of credit will not qualify in certain instances
• Bank looks first to reduce principal by cutting unpaid interest tacked on as principal in calculating affordable payments
• Bank will convert certain option adjustable-rate mortgages to fixed-rate loans
• Bank aims to reduce the first mortgage to 31% of gross household income
  

Historical Tidbit About The City Of Rolling Hills

The City of Rolling Hills shares its geological history with that of neighboring Palos Verdes Peninsula communities. The rocky ridge of the Peninsula lay twice beneath the sea. When it first emerged, deep canyons were eroded. One of these is Agua Negra Canyon which Crenshaw Boulevard follows between Crest Road and Pacific Coast Highway. After the Peninsula had submerged again, the ocean seemed reluctant to give up its prize. There are thirteen marine terraces carved by the grinding of the ocean waves. Sandstone imbedded with marine fossils is frequently turned up when sites for new homes a bulldozed. Indians roamed the hills of this area searching for seeds and small game to supplement the fish they brought in from the Pacific. Bowls of arrowheads left by these Indians have been unearthed at the Gordon Shultz property on Johns Canyon Road. It was the camp fires of these Indians that Juan Rodriguez Cabrillo sighted in 1542 as he sailed into what we now call San Pedro Bay.

Treasury Department Steps In To Help Homeowners

In an article published in the current March/April 2010 issue of California Real Estate Magazine, the Treasury Department announced that through their Home Affordable Foreclosure Alternatives Program (HAFA), it has issued modified rules of the short sale process to help homeowners. The process will be standardized nationwide with uniform documentation and costs and due to go into effect in April. Below are some important aspects of the process:

1. Lenders are required to answer a request for a short sale within 10 business days of receiving the purchase offer.

2. Homeowners also get $1500 in cash as a "relocation incentive" to cover moving costs, deducted from the sale price.

3. Mortgage lenders, in turn, receive $1000 to help cover and speed up the process of the sale.

Reference:
This blog was paraphrase from an original article written by David Tremont, a freelance real estate writer.

Source:
You can read more of the original article at the link below:

http://www.car.org/newsstand/crem/current-issue/