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H.R.3548, Short title Worker, Homeownership, and Business Assistance Act of 2009 sponsored by Democrat James McDermott of Washington was passed by the House of Representatives late this afternoon (11/5/09) and is expected to receive the approval of President Obama possibly as early as tomorrow.

While the bill's focus is the 13 week extension of unemployment benefits it became the obvious vehicle to carry an extension of the Home Buyer's Tax Credit. Highlights of this last minute amendment which were sent by IMMAAG earlier this week are repeated below.

>  A purchase transaction will qualify for those entering a binding contract before May 1, 2010 with a closing date before July 1, 2010.

>  The credit is up to $8,000 for a married couple. ($4,000 individual)

>  The original tax credit provision is expanded to include purchasers who have resided for 5 consecutive years (out of the past eight years) in their primary residence to qualify for a tax credit of up to $6,500 ($3,250 individual) on the purchase of a new primary residence.

>  Income levels have increased to $125,000 (single [was $75,000]) and $225,000 (couple [was $150,000]).

>  If the purchase price is greater than $800,000 no credit is allowed. 

>  Persons stationed outside the United States on official duty for 90 days during the period after 12/31/2008 and before 5/1/2010 will have eligibility extended for binding contracts signed before 5/1/2011  and closed before July 1, 2011.

The National Association of Realtors expects this extension to allow another 2 million purchases to occur before it terminates on 4/30/10.   

For more information on this or any other real estate finance issue contact:
JIM ASKINS 731-3100 (ofc) 970-946-7466 (cell) 800-326-2100 (toll free)  jaskins@colmortgage.com

Oct. 23 (Bloomberg) -- Sales of existing U.S. homes climbed in September to the highest level in more than two years as homebuyers rushed to take advantage of a tax credit before it runs out.

Purchases jumped 9.4 percent to a 5.57 million annual rate, more than forecast and following a 5.09 rate in August, the National Association of Realtors said today in Washington. The median price fell at the slowest pace in a year as the number of houses on the market shrank.

The $8,000 credit for first-time buyers, due to expire Nov. 30, has probably pulled sales and construction forward, signaling housing may cool in coming months. While Congress is considering extending the incentive, lower prices and mortgage rates have also contributed to steadying a market that endured the worst slump since the Great Depression.

“The rush to take advantage of the tax credit is obviously pushing up sales,” said Michael Gregory, a senior economist at BMO Capital Markets in Toronto, who forecast sales would rise to a 5.5 million pace. “Although this is going to be temporary, it does absorb some excess supply and helps bring the market into balance going forward.”

Stocks fluctuated between gains and losses as better-than- anticipated earnings reports at Microsoft Corp. and Amazon.com Inc. offset concerns shares have rallied too much. The Standard & Poor’s 500 Index was down 0.5 percent at 1,087.41 at 10:15 a.m. in New York.

Exceeds Forecast

Existing home sales were forecast to rise to a 5.35 million annual rate, according to the median forecast of 76 economists in a Bloomberg News survey. Estimates ranged from 5 million to 5.6 million, after an initially reported 5.1 million rate in August. Resales reached a 4.49 million pace in January, their lowest level since comparable records began in 1999.

Purchases of existing homes were up 9.2 percent compared with a year earlier. The median price fell to $174,900, down 8.5 percent from a year ago. It was the smallest decrease in 13 months.

The number of previously owned homes on the market dropped 7.5 percent to 3.63 million in September. At the current sales pace, it would take 7.8 months to sell those houses, the lowest level since March 2007. A seven months’ supply is usually consistent with stabilization in prices, NAR chief economist Lawrence Yun said in recent months.

Distressed Sales

The share of homes sold as foreclosures or otherwise distressed properties was 29 percent in September from 31 percent in August, Yun said.

Today’s report showed sales of existing single-family homes climbed 9.4 percent to an annual rate of 4.89 million. Sales of condominiums and co-operatives increased 9.7 percent to a 680,000 rate.

Purchases increased in all four regions, led by a 13 percent surge in the West. Purchases climbed 9.6 percent in the Midwest, 9 percent in the South and 4.4 percent in the Northeast.

Purchases of previously owned homes, which make up more than 90 percent of the market, are tabulated when sales close and therefore reflect contracts signed a month or two earlier. Sales of newly built residences, which make up the rest, are counted when a contract is signed, and may therefore cool months before the tax credit expires. Buyers must close before the Nov. 30 deadline to be eligible for the tax credit.

Extend Credit

Last month’s sales were “heavily dependent” on the tax credit, the NAR’s Yun said in a press conference.

The Realtors’ group and the National Association of Home Builders are lobbying to extend the first-time homebuyers credit on concern demand will wane after it lapses. Lawmakers this week took up the call.

“The work of stabilizing the housing market won’t be done” when the credit expires next month, Senate Banking Committee Chairman Christopher Dodd said during a panel hearing. “We still need to use every tool at our disposal to fix this problem.”

Dodd, a Democrat from Connecticut, and Republican Senator Johnny Isakson of Georgia, a former real estate agent, urged their colleagues to extend the credit through next June.

The Federal Reserve this week said its 12 district banks saw “stabilization or modest improvements” in many areas of the economy, led by housing and manufacturing. “Most districts reported that housing market conditions improved in recent weeks, primarily from a pickup in sales of low-to middle-priced houses,” the Fed said in its Beige Book of economic conditions in September and early October.

Housing-related companies are still trying to recover. USG Corp., North America’s largest maker of gypsum wallboard, posted its eighth straight net loss last quarter as sales dropped 32 percent from the same time last year.

“The residential housing market appears to have stabilized, but it has done so at a very low level,” Chief Executive Officer William Foote said Oct. 21 on a conference call with analysts.

For more information on this or any other real estate finance issue contact:
JIM ASKINS 731-3100 (ofc) 970-946-7466 (cell) 800-326-2100 (toll free)  jaskins@colmortgage.com

The American Recovery & Reinvestment Act of 2009

1. Who is eligible to claim the tax credit?
First-time home buyers purchasing any kind of home, new or resale, are eligible for the tax credit. To qualify for the tax credit, a home purchase must occur on or after January 1, 2009 and before December 1, 2009. For the purposes of the tax credit, the purchase date is the date when closing occurs and the title to the property transfers to the home owner. A limited exception exists for certain contract for deed purchases and installment sale purchases. See the IRS website for more detail.

2. What is the definition of a first-time home buyer?
The law defines "first-time home buyer" as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse.

For example, if you have not owned a home in the past three years but your spouse has owned a principal residence, neither you nor your spouse qualifies for the first-time home buyer tax credit. However, unmarried joint purchasers may allocate the credit amount to any buyer who qualifies as a first-time buyer, such as may occur if a parent jointly purchases a home with a son or daughter. Ownership of a vacation home or rental property not used as a principal residence does not disqualify a buyer as a first-time home buyer.

3. How is the amount of the tax credit determined?
The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.

4. Are there any income limits for claiming the tax credit?
Yes. The income limit for single taxpayers is $75,000; the limit is $150,000 for married taxpayers filing a joint return. The tax credit amount is reduced for buyers with a modified adjusted gross income (MAGI) of more than $75,000 for single taxpayers and $150,000 for married taxpayers filing a joint return. The phase-out range for the tax credit program is equal to $20,000. That is, the tax credit amount is reduced to zero for taxpayers with MAGI of more than $95,000 (single) or $170,000 (married) and is reduced proportionally for taxpayers with MAGIs between these amounts.

5. What is "modified adjusted gross income"?
Modified adjusted gross income or MAGI is defined by the IRS. To find it, a taxpayer must first determine "adjusted gross income" or AGI. AGI is total income for a year minus certain deductions (known as "adjustments" or "above-the-line deductions"), but before itemized deductions from Schedule A or personal exemptions are subtracted. On Forms 1040 and 1040A, AGI is the last number on page 1 and first number on page 2 of the form. For Form 1040-EZ, AGI appears on line 4 (as of 2007). Note that AGI includes all forms of income including wages, salaries, interest income, dividends and capital gains.

To determine modified adjusted gross income (MAGI), add to AGI certain amounts of foreign-earned income. See IRS Form 5405 for more details.

6. If my modified adjusted gross income (MAGI) is above the limit, do I qualify for any tax credit?
Possibly. It depends on your income. Partial credits of less than $8,000 are available for some taxpayers whose MAGI exceeds the phase-out limits.

7. Can you give me an example of how the partial tax credit is determined?
Just as an example, assume that a married couple has a modified adjusted gross income of $160,000. The applicable phase-out to qualify for the tax credit is $150,000, and the couple is $10,000 over this amount. Dividing $10,000 by the phase-out range of $20,000 yields 0.5. When you subtract 0.5 from 1.0, the result is 0.5. To determine the amount of the partial first-time home buyer tax credit that is available to this couple, multiply $8,000 by 0.5. The result is $4,000.

Here’s another example: assume that an individual home buyer has a modified adjusted gross income of $88,000. The buyer’s income exceeds $75,000 by $13,000. Dividing $13,000 by the phaseout range of $20,000 yields 0.65. When you subtract 0.65 from 1.0, the result is 0.35. Multiplying $8,000 by 0.35 shows that the buyer is eligible for a partial tax credit of $2,800.

Please remember that these examples are intended to provide a general idea of how the tax credit might be applied in different circumstances. You should always consult your tax advisor for information relating to your specific circumstances.

8. How is this home buyer tax credit different from the tax credit that Congress enacted in July of 2008?
The most significant difference is that this tax credit does not have to be repaid. Because it had to be repaid, the previous "credit" was essentially an interest-free loan. This tax incentive is a true tax credit. However, home buyers must use the residence as a principal residence for at least three years or face recapture of the tax credit amount. Certain exceptions apply.

9. How do I claim the tax credit? Do I need to complete a form or application?
Participating in the tax credit program is easy. You claim the tax credit on your federal income tax return. Specifically, home buyers should complete IRS Form 5405 to determine their tax credit amount, and then claim this amount on line 67 of the 1040 income tax form for 2009 returns (line 69 of the 1040 income tax form for 2008 returns). No other applications or forms are required, and no pre-approval is necessary. However, you will want to be sure that you qualify for the credit under the income limits and first-time home buyer tests. Note that you cannot claim the credit on Form 5405 for an intended purchase for some future date; it must be a completed purchase.

10. What types of homes will qualify for the tax credit?
Any home that will be used as a principal residence will qualify for the credit. This includes single-family detached homes, attached homes like townhouses and condominiums, manufactured homes (also known as mobile homes) and houseboats. The definition of principal residence is identical to the one used to determine whether you may qualify for the $250,000 / $500,000 capital gain tax exclusion for principal residences.

It is important to note that you cannot purchase a home from your ancestors (parents, grandparents, etc.), your lineal descendants (children, grandchildren, etc.) or your spouse. Please consult with your tax advisor for more information. Also see IRS Form 5405.

11. I read that the tax credit is "refundable." What does that mean?
The fact that the credit is refundable means that the home buyer credit can be claimed even if the taxpayer has little or no federal income tax liability to offset. Typically this involves the government sending the taxpayer a check for a portion or even all of the amount of the refundable tax credit.

For example, if a qualified home buyer expected, notwithstanding the tax credit, federal income tax liability of $5,000 and had tax withholding of $4,000 for the year, then without the tax credit the taxpayer would owe the IRS $1,000 on April 15th. Suppose now that the taxpayer qualified for the $8,000 home buyer tax credit. As a result, the taxpayer would receive a check for $7,000 ($8,000 minus the $1,000 owed).

12. I purchased a home in early 2009 and have already filed to receive the $7,500 tax credit on my 2008 tax returns. How can I claim the new $8,000 tax credit instead?
Home buyers in this situation may file an amended 2008 tax return with a 1040X form. You should consult with a tax advisor to ensure you file this return properly.

13. Instead of buying a new home from a home builder, I hired a contractor to construct a home on a lot that I already own. Do I still qualify for the tax credit?
Yes. For the purposes of the home buyer tax credit, a principal residence that is constructed by the home owner is treated by the tax code as having been "purchased" on the date the owner first occupies the house. In this situation, the date of first occupancy must be on or after January 1, 2009 and before December 1, 2009.

In contrast, for newly-constructed homes bought from a home builder, eligibility for the tax credit is determined by the settlement date.

14. Can I claim the tax credit if I finance the purchase of my home under a mortgage revenue bond (MRB) program?
Yes. The tax credit can be combined with the MRB home buyer program. Note that first-time home buyers who purchased a home in 2008 may not claim the tax credit if they are participating in an MRB program.

15. I live in the District of Columbia. Can I claim both the Washington, D.C. first-time home buyer credit and this new credit?
No. You can claim only one.

16. I am not a U.S. citizen. Can I claim the tax credit?
Maybe. Anyone who is not a nonresident alien (as defined by the IRS), who has not owned a principal residence in the previous three years and who meets the income limits test may claim the tax credit for a qualified home purchase. The IRS provides a definition of "nonresident alien" in IRS Publication 519.

17. Is a tax credit the same as a tax deduction?
No. A tax credit is a dollar-for-dollar reduction in what the taxpayer owes. That means that a taxpayer who owes $8,000 in income taxes and who receives an $8,000 tax credit would owe nothing to the IRS.

A tax deduction is subtracted from the amount of income that is taxed. Using the same example, assume the taxpayer is in the 15 percent tax bracket and owes $8,000 in income taxes. If the taxpayer receives an $8,000 deduction, the taxpayer’s tax liability would be reduced by $1,200 (15 percent of $8,000), or lowered from $8,000 to $6,800.

18. I bought a home in 2008. Do I qualify for this credit?
No, but if you purchased your first home between April 9, 2008 and January 1, 2009, you may qualify for a different tax credit. Please consult with your tax advisor for more information.

19. Is there any way for a home buyer to access the money allocable to the credit sooner than waiting to file their 2009 tax return?
Yes. Prospective home buyers who believe they qualify for the tax credit are permitted to reduce their income tax withholding. Reducing tax withholding (up to the amount of the credit) will enable the buyer to accumulate cash by raising his/her take home pay. This money can then be applied to the down payment.

Buyers should adjust their withholding amount on their W-4 via their employer or through their quarterly estimated tax payment. IRS Publication 919 contains rules and guidelines for income tax withholding. Prospective home buyers should note that if income tax withholding is reduced and the tax credit qualified purchase does not occur, then the individual would be liable for repayment to the IRS of income tax and possible interest charges and penalties.

In addition, rule changes made as part of the economic stimulus legislation allow home buyers to claim the tax credit and participate in a program financed by tax-exempt bonds. As a result, some state housing finance agencies have introduced programs that provide short-term second mortgage loans that may be used to fund a down payment. Prospective home buyers should check with their state housing finance agency to see if such a program is available in their community. To date, 14 state agencies have announced tax credit assistance programs, and more are expected to follow suit. The National Council of State Housing Agencies (NCSHA) has compiled a list of such programs, which can be found here.

20. The Secretary of Housing and Urban Development has announced that HUD will allow "monetization" of the tax credit. What does that mean?
It means that HUD will allow buyers using FHA-insured mortgages to apply their anticipated tax credit toward their home purchase immediately rather than waiting until they file their 2009 income taxes to receive a refund. These funds may be used for certain down payment and closing cost expenses.

Under the guidelines announced by HUD, non-profits and FHA-approved lenders will be allowed to give home buyers short-term loans of up to $8,000.

The guidelines also allow government agencies, such as state housing finance agencies, to facilitate home sales by providing longer term loans secured by second mortgages.

Housing finance agencies and other government entities may also issue tax credit loans, which home buyers may use to satisfy the FHA 3.5 percent down payment requirement.

In addition, approved FHA lenders will also be able to purchase a home buyer’s anticipated tax credit to pay closing costs and down payment costs above the 3.5 percent down payment that is required for FHA-insured homes.

21. If I’m qualified for the tax credit and buy a home in 2009, can I apply the tax credit against my 2008 tax return?
Yes. The law allows taxpayers to choose ("elect") to treat qualified home purchases in 2009 as if the purchase occurred on December 31, 2008. This means that the 2008 income limit (MAGI) applies and the election accelerates when the credit can be claimed (tax filing for 2008 returns instead of for 2009 returns). A benefit of this election is that a home buyer in 2009 will know their 2008 MAGI with certainty, thereby helping the buyer know whether the income limit will reduce their credit amount.

Taxpayers buying a home who wish to claim it on their 2008 tax return, but who have already submitted their 2008 return to the IRS, may file an amended 2008 return claiming the tax credit. You should consult with a tax professional to determine how to arrange this.

22. For a home purchase in 2009, can I choose whether to treat the purchase as occurring In 2008 or 2009, depending on in which year my credit amount is the largest?
Yes. If the applicable income phase-out would reduce your home buyer tax credit amount in 2009 and a
larger credit would be available using the 2008 MAGI amounts, then you can choose the year that yields
the largest credit amount.

For more information on this or any other real estate finance issue contact:
JIM ASKINS 731-3100 (ofc) 970-946-7466 (cell) 800-326-2100 (toll free)  jaskins@colmortgage.com

The Treasury Department encourages taxpayers to explore these options to maximize their credit and get their money back as fast as possible.

“The new credit can get money in the pockets of first-time homebuyers quickly,” said IRS Commissioner Doug Shulman. “For people who recently purchased a home or are considering buying in the next few months, there are several different ways that they can get this tax credit even if they’ve already filed their tax return.”

First-time homebuyers represent a significant portion of existing single-family home sales. The expansion in the first-time homebuyer credit will make it easier for first-time homebuyers to enter the housing market this year.

Under the American Recovery and Reinvestment Act of 2009, qualifying taxpayers who purchase a home before Dec. 1 receive up to $8,000, or $4,000 for married individuals filing separately. People can claim the credit either on their 2008 tax returns due April 15 or on their 2009 tax returns next year.

First-time homebuyers may be able to take advantage of a tax credit for homes purchased in 2008 or 2009. The credit:

• Applies to purchases that close after April 8, 2008, and before Dec. 1, 2009.
• Applies only to homes used as a taxpayer's principal residence.
• Reduces a taxpayer's tax bill or increases his or her refund, dollar for dollar.
• Is fully refundable, meaning the credit will be paid out to eligible taxpayers, even if they owe no tax or the credit is more than the tax owed.

The credit is claimed using Form 5405.

For 2008 Home Purchases

The Housing and Economic Recovery Act of 2008 established a tax credit for first-time homebuyers that can be worth up to $7,500. For homes purchased in 2008, the credit is similar to a no-interest loan and must be repaid in 15 equal, annual installments beginning with the 2010 income tax year.

For 2009 Home Purchases

The American Recovery and Reinvestment Act of 2009 expanded the first-time homebuyer credit by increasing the credit amount to $8,000 for purchases made in 2009 before Dec. 1.

For home purchased in 2009, the credit does not have to be paid back unless the home ceases to be the taxpayer's main residence within a three-year period following the purchase.

First-time homebuyers who purchase a home in 2009 can claim the credit on either a 2008 tax return, due April 15, 2009, or a 2009 tax return, due April 15, 2010. The credit may not be claimed before the closing date. But, if the closing occurs after April 15, 2009, a taxpayer can still claim it on a 2008 tax return by requesting an extension of time to file or by filing an amended return.

For more information on this or any other real estate financing issue, contact:

JIM ASKINS (CO)970-731-3100 (NM)505-263-7466 (Toll Free)800-326-2100  On-Line:  www.colmortgage.com  E-mail: jaskins@colmortgage.com

Senior Economist Gary Thayer believes the US economy appears to be bottoming and may start to climb out of the deep hole that it is in during the next few months.  Job losses have diminished and inventories have reduced to more desirable levels.  If companies do not increase production back to the rate of sales, they may not have enough goods to sell if spending increases.  The housing market is also starting to firm, suggesting that this sector of the economy may begin to expand for the first time in several years.  Finally, the Fed is continuing to pump liquidity into the US financial system in order to boost ecomonic activity.  However, China may be scaling back its lending compared to earlier this year.  The US economic recovery could benefit if reduced Chinese stimulus allows commodity prices to pull back in coming months.

For more information on this or any other real estate financial issue, contact:
JIM ASKINS   (CO)970-731-3100    (NM)505-263-7466    800-326-2100
E-mail: jaskins@colmortgage.com  Home Page: www.colmortgage.com

Aug. 21 (Bloomberg) -- Sales of existing U.S. homes jumped more than forecast in July to the highest level in almost two years, signaling the housing crisis that crippled the world’s largest economy is easing.

Purchases climbed 7.2 percent to a 5.24 million annual rate, the most since August 2007, the National Association of Realtors said today in Washington. The gain was the biggest since records began in 1999. The median price fell 15 percent.

Foreclosure-driven declines in prices, government credits for first-time buyers and near-record-low borrowing costs may keep stoking demand, helping the economy recover from the worst recession since the 1930s. Ongoing job losses are a reminder that more Americans will probably lose their homes, indicating a rebound will be slow to take hold.

“More and more buyers are becoming convinced that there is not a lot of downside left in the housing market,” said Ellen Zentner, a senior economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. “We can count on housing no longer being a drag. The economic recovery is on track.”

Stocks jumped and Treasury securities dropped after the report added to evidence the housing market was turning. The Standard & Poor’s 500 index rose 1.6 percent to 1,023.67 at 10:24 a.m. in New York. The yield on the 10-year note jumped to 3.51 percent from 3.43 percent late yesterday.

Exceeds Forecast

Existing home sales were forecast to rise to a 5 million annual rate, according to the median forecast of 64 economists in a Bloomberg News survey. Estimates ranged from 4.8 million to 5.25 million. June’s pace was unrevised at 4.89 million.

Sales had reached a 4.49 million pace in January, their lowest level since comparable records began in 1999.

Purchases of existing homes increased 5 percent compared with a year earlier. The median price dropped to $178,400 from the $210,100 in July 2008.

The number of previously-owned unsold homes on the market jumped 7.3 percent to 4.09 million in July, a “notable” increase, according to Lawrence Yun, the Realtors’ chief economist. At the current sales pace, it would take 9.4 months to sell those houses, the same as in June.

A seven months’ supply is usually consistent with stabilization in prices, Yun said last month.

Distressed Sales

The share of homes sold as foreclosures or otherwise distressed properties held to 31 percent in July, he said.

Today’s report showed sales of existing single-family homes increased 6.5 percent to an annual rate of 4.61 million. Sales of condominiums and co-operatives climbed 13 percent to a 630,000 rate.

Purchases increased in three of four regions, led by a 13 percent jump in the Northeast.

The figures are compiled from contract closings and may reflect purchases agreed upon weeks or months earlier. Many economists consider new-home sales, recorded when a contract is signed, a more timely barometer of the market.

The Commerce Department may report next week that purchases of new houses rose in July to the highest level since November, according to the Bloomberg survey.

Home Depot Inc., the largest home-improvement retailer, is among businesses cutting costs to ride out the housing recession. The Atlanta-based company reported second-quarter profit that fell less than analysts estimated and raised its annual earnings forecast after trimming expenses, even as it projected a sales decline for the year.

‘Better’ Performance

“Performance across most of our regions is better,” Chief Executive Officer Frank Blake said on a conference call with analysts on Aug. 18. “But caution is still appropriate,” and “we remain concerned by the high level of foreclosure activity,” he said.

About $3.4 trillion worth of houses are at risk of default because the owners owe more than the property is worth, Santa Ana, California-based First American CoreLogic said last week. By putting more homes on the market, foreclosures are keeping inventory higher than levels consistent with stable prices.

Obama administration efforts to revive housing include an $8,000 federal tax credit for first-time buyers who complete the transaction before Dec. 1. The government also is offering lenders incentives to modify the terms of delinquent mortgages, and the Federal Reserve is buying mortgage-backed securities to help reduce borrowing costs.

The first-time buyers accounted for about 30 percent of sales last month and the government’s credit is having a “significant impact” on sales, the NAR’s Yun said.

For more information on this or any other real estate financial issue, contact:
JIM ASKINS (CO) 970-731-3100 (NM) 505-263-7466 (Toll Free) 800-326-2100
E-mail:  jaskins@colmortgage.com   Web Site: www.colmortgage.com

American builders broke ground on more single-family homes in July for a fifth straight month as the real-estate industry stabilized further.

Work began on single-family dwellings at a 490,000 annual pace last month, up 1.7 percent from June and the most since October, the Commerce Department reported today in Washington. Total housing starts unexpectedly fell, depressed by a 13 percent decrease in multifamily units, including condominiums and apartment buildings.

Falling home values and government stimulus efforts such as the tax credit for first-time buyers are boosting sales and stemming the housing meltdown that triggered the financial crisis. Another report showed wholesale prices dropped more than forecast, giving the Federal Reserve more time to foster and sustain a recovery before concern over inflation surfaces.

For more information on this or any other Real Estate Fiancial issue, contact:
JIM ASKINS (CO) 970-731-3100 (NM) 505-263-7466 (Toll Free) 800-326-2100

More than 150 publicly traded U.S. lenders own nonperforming loans that equal 5 percent or more of their holdings, a level that former regulators say can wipe out a banks equity and threaten its survival.  The number of banks exceeding the threshold more than doubled in the year through June, according to data compiled by Bloomberg, as real estate and credit-card defaults surged.

Almost 300 reported 3 percent or more of their loans were nonperforming, a term for commercial and consumer debt that has stopped collecting interest or will no longer be paid in full.  The biggest banks with nonperforming loans of at least 5 percent include Wisconsins Marshall & Ilsley Corp. and Georgias Synovus Financial Corp., according to Bloomberg data.  Among those exceeding 10 percent, the biggest in the 50 U.S. states was Michigans Flagstar Bancorp. All said in second-quarter filings theyre well-capitalized by regulatory standards, which means theyre considered financially sound.

At a 3 percent level, Id be concerned that theres some underlying issue, and if theyre at 5 percent, chances are regulators have them classified as being in unsafe and unsound condition, said Walter Mix, former commissioner of the California Department of Financial Institutions, and now a managing director of consulting firm LECG in Los Angeles. He wasnt commenting on any specific banks.  Missed payments by consumers, builders and small businesses pushed 72 lenders into failure this year, the most since 1992.  More collapses may lie ahead as the recession causes increased defaults and swells the confidential U.S. list of problem banks, which stood at 305 in the first quarter.

(By Ari Levy Aug. 14 - Bloomberg)

FOR MORE INFORMATION ON THIS OR ANY OTHER REAL ESTATE FINANCIAL ISSUE, CONTACT:  JIM ASKINS  (CO)970-731-3100  (NM)505-263-7466 OR
(TOLL FREE) 800-326-2100  jaskins@colmortgage.com  www.colmortgage.com

The Federal Reserve said it will slow the pace of its $300 billion program to buy U.S.  Treasuries as the recession eases and anticipates that the full amount will be purchased by the end of October.  To promote a smooth transition in markets as these purchases of Treasury securities are completed, the committee has decided to gradually slow the pace of these transactions and anticipates that the full amount will be purchased by the end of October, the Federal Open Market Committee said in a statement after a two-day meeting in Washington. The buying was previously scheduled to end in September.

The Fed has bought $252.8 billion of longer-term Treasuries since beginning its program. The effort hasnt stopped a jump in yields as investors began to anticipate a recovery. Yields on benchmark 10-year notes were at 3.71 percent at 1 p.m. in New York, from as low as 2.46 percent after the March 18 announcement of the plan.

For more information on this or any other real estate financial issue, contact JIM ASKINS   jaskins@colmortgage.com   www.colmortgage.com    (Nationwide) 800-326-2100 (CO) 970-731-3100 (NM) 505-263-7466

The number of contracts to buy previously owned homes in the U.S. rose in June for a fifth straight month and exceeded economists forecasts, as lowerprices and mortgage rates attracted buyers. The 3.6 percent gain in the index of signed purchase agreements, or pending home resales, followed a 0.8 percent gain the prior month that was larger than previously estimated, the National Association of Realtors said today in Washington.

Foreclosure-driven declines in home values and tax incentives are putting houses within reach of first-time buyers, helping to stabilize the real-estate market, which has been the biggest drag on economic growth. At the same time, with mortgage rates no longer dropping and unemployment still rising, it may be months before a sustained recovery in housing takes hold.

The housing market seems to definitely be finding its legs, Maxwell Clarke, chief U.S. economist at IDEAglobal in New York, said before the report. Both for new and existing home sales, as prices continue to come down and the tax credit is in effect, the prospect of moving into a new house or buying a new house is much more appealing. Economists forecast the index would increase 0.7 percent, after an originally reported 0.1 percent gain in May, according to the median of 35 projections in a Bloomberg News survey.  Estimates ranged from a 1.2 percent drop to a 3 percent gain.

For more information on purchasing a home, call JIM ASKINS today!(Nationwide) 800-326-2100 (CO) 970-731-3100 (NM) 505-263-7466