MHDC Press Release

MISSOURI HOUSING DEVELOPMENT COMMISSION

Strength, Dignity, Quality of Life

3435 Broadway, Kansas City, MO 64111

Kathryn Watts, Government Affairs, 816-759-6824; e-mail kwatts@mhdc.com

MHDC is the state's housing finance agency. The Commission is dedicated to strengthening communities and the lives of Missourians through the financing, development and preservation of affordable housing. MHDC was created by the General Assembly in 1969 and since that time it has invested $5 billion for the development of affordable rental housing and mortgages for first-time homebuyers in Missouri. MHDC functions much like a bank, providing financing directly to borrowers, developers or through a network of private lending institutions. MHDC is one of only three state housing agencies in the nation to receive an issuer credit rating of AA+ from Standard & Poor’s.

News Release/News Advisory/Request for Coverage – 01/16/09

MHDC Rolls Out Innovative New Program For First-Time Homebuyers

Starting January 14th, 2009, Missouri Housing Development Commission (MHDC) will have a new product to enable first-time homebuyers to take advantage of the $7,500 federal first-time homebuyer tax credit. This program is the first of its kind in the nation.

The federal first-time homebuyer tax credit was created by Congress this summer to encourage new homebuyers to purchase homes and thereby stimulate housing markets. However, the federal tax credit has been largely ineffective. One of the primary reasons the federal credit hasn’t worked is that the homebuyer doesn’t receive the money until he receives his federal income tax refund – which may be several months after the home is purchased.

With over 30 years experience funding mortgages for first-time homebuyers, MHDC knows that the biggest barrier faced by first-time homebuyers is acquiring money for down payment and closing costs. As a result, MHDC created a program that allows homebuyers to receive the value of the tax credit at the time of closing.

How the Federal First-Time Homebuyer Tax Credit Works:

• First-time homebuyers receive a tax credit worth 10% of their home purchase, up to $7,500. The credit is claimed on the homebuyer’s federal tax return. The credit is refundable, which means that the homebuyer receives a refund for the amount of the credit minus any federal tax liability. The credit is essentially an interest-free loan from the federal government and must be repaid through an increase in federal income taxes over a period of 15 years.

How the MHDC Tax Credit Advance Loan Program Works:

• MHDC makes a second mortgage to the homebuyer at the time of closing worth up to 6% of the home purchase price or a maximum of $6,750, which is used to cover down payment and closing costs. The tax credit advance loan is paired with MHDC financing for the first mortgage in the form of a safe 30 year, fixed rate mortgage. The homebuyer then files for the federal tax credit and uses the credit refund to pay off the MHDC tax credit advance loan. If the tax credit advance loan is paid off by the designated deadline, the homeowner pays no interest other than a modest servicing fee. If the tax credit advance loan is not paid by the deadline, principal and interest payments to repay the loan over 10 years begin automatically.

All MHDC first-time homebuyer loans are made through a statewide network of certified

lenders, and serviced by U.S. Bank. The MHDC loan programs are available for households with incomes up to $85,500. Interested first-time homebuyers can find a list of participating lenders and other information about the program on the MHDC website (www.mhdc.com).

MISSOURI HOUSING DEVELOPMENT COMMISSION

Strength, Dignity, Quality of Life

3435 Broadway, Kansas City, MO 64111

Kathryn Watts, Government Affairs, 816-759-6824; e-mail kwatts@mhdc.com

MHDC is the state's housing finance agency. The Commission is dedicated to strengthening communities and the lives of Missourians through the financing, development and preservation of affordable housing. MHDC was created by the General Assembly in 1969 and since that time it has invested $5 billion for the development of affordable rental housing and mortgages for first-time homebuyers in Missouri. MHDC functions much like a bank, providing financing directly to borrowers, developers or through a network of private lending institutions. MHDC is one of only three state housing agencies in the nation to receive an issuer credit rating of AA+ from Standard & Poor’s.

The federal tax credit and the MHDC tax credit advance loan program are both currently set to expire June 30, 2009.

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NOTE TO EDITORS: Media representative questions can be directed to Kathryn Watts,

Government Affairs Liaison, at 816-759-6824 or kwatts@mhdc.com. All other inquiries should be directed to Gregory Spurgeon, Single Family Homeownership Administrator, at 816-759-7228 or gspurgeon@mhdc.com. If you would like to receive this release by e-mail in rich-text format, please email kwatts@mhdc.com and provide us with the appropriate e-mail address.

Someone else is thinking what I am thinking!

I hate to simply rely on other people to say what I am thinking, however this article on MSN is the perfect advice for those who are getting greedy and thinking that rates are going to continue their downward trend.

http://articles.moneycentral.msn.com/Banking/HomeFinancing/dont-wait-nows-time-to-refinance.aspx

Just because your neighbor got a certain rate does not mean you will get the same rate either better or worse. The days of a simple rate are long gone. Your FICO, loan amount, amount of equity in your home, type of loan, and many other factors will determine your rate. Take the time now to get a "Mortgage Fitness Checkup" to see what is the best plan for you and your financial future!

Time to get back at it!

So I disappeared for a while as I tried to work through the holiday season. Just prior to Thanksgiving rates started falling we saw refinance activity begin to pick up. Then on December 15, 2008 we saw a huge rally on mortgage backed securities push the 30 year down to historic lows. Some were lucky enough to lock in at 4.75%. That lasted for all of 2 1/2 hours and then investors pulled pricing and rates went back above 5%. Since then we have seen little drops followed by upward pressure keeping the 30 year around 5.25%. Still lower than 2003 and now we have this news:
http://www.marketwatch.com/news/story/Banks-rise-Fed-details-planned/story.aspx?guid={EA305A84-90F7-44BF-8DF3-B0DD3687F789}&dist=hpts
Going into 2009 there will be more pressure to push the rates down to 5% or below. There is not a target number that the Fed is releasing for where they want rates, but you can be assured there will be more days like December 15, 2008 in the future.

For those wanting to take advantage of these rates I highly recommend talking to your mortgage professional and getting your application completed and all closing costs agreed upon ahead of time. Put a plan in place to lock at a rate that makes sense and then when the opportunity arrives for you to lock in to the rate it only takes a few minutes and you are locked in. Keep in mind when these opportunities arise, they don't last for days. The market or investors only want so much exposure and once they get their fill, they will pull that pricing. We never know how long it will last. Those that are prepared are the ones that benefit the most.

Have a safe and Happy New Year!

Blah, Blah, Blah

Here is more rhetoric about how banks are going to help people in trouble. If they would quit talking about it and just do it the challenges would start to ease. Common sense says that keeping people in their houses will do more for neighborhoods than empty houses.

www.msnbc.msn.com/id/27660450

www.yourdebtfreecoach.com

An Open Letter to All Referral Sources

Last weekend the Federal Government announced the takeover of Fannie Mae and Freddie Mac. This is the culmination of many months of stress and tremendous losses for these companies and many in the mortgage industry. Prior to this announcement, GMAC Mortgage announced it was closing over 200 retail mortgage offices, putting more loan officers and support people out of work. Many of the very talented people in the mortgage industry have left or are no longer working for companies that could provide them the programs and support that they need to be successful. Throughout all of this Cornerstone has continued to stay strong. In July of 2007 we had 17 loan officers. We now have 25 loan officers. We have added talent and with that talent we have added programs and tools to help you become a success or help your clients achieve their goals.

For the real estate community we are rolling out the Home Buyers Scouting Report. This is a tool to help you establish a relationship with buyers and incubate them until they are ready to purchase. For my professional partners we have one of the only second mortgage programs that goes to 95% combined loan to value. In addition to that we have the Equity Accelerator to help all of our clients save thousands of dollars in interest over the life of their loans.

I want to make sure that you know that I am here to help you and your clients achieve your goals. If you know anyone who has purchased or refinanced in last 3 years, please pass their information along to me so I can schedule a “Mortgage Fitness Checkup.” They may not need to do anything now, but it is beneficial to them that they begin to build a relationship with a trusted mortgage professional that can help them achieve their financial dreams!

Sincerely,



Christopher M. Scheer
Your Residential Lending Expert

An Open Letter to All Referral Sources

Last weekend the Federal Government announced the takeover of Fannie Mae and Freddie Mac. This is the culmination of many months of stress and tremendous losses for these companies and many in the mortgage industry. Prior to this announcement, GMAC Mortgage announced it was closing over 200 retail mortgage offices, putting more loan officers and support people out of work. Many of the very talented people in the mortgage industry have left or are no longer working for companies that could provide them the programs and support that they need to be successful. Throughout all of this Cornerstone has continued to stay strong. In July of 2007 we had 17 loan officers. We now have 25 loan officers. We have added talent and with that talent we have added programs and tools to help you become a success or help your clients achieve their goals.

For the real estate community we are rolling out the Home Buyers Scouting Report. This is a tool to help you establish a relationship with buyers and incubate them until they are ready to purchase. For my professional partners we have one of the only second mortgage programs that goes to 95% combined loan to value. In addition to that we have the Equity Accelerator to help all of our clients save thousands of dollars in interest over the life of their loans.

I want to make sure that you know that I am here to help you and your clients achieve your goals. If you know anyone who has purchased or refinanced in last 3 years, please pass their information along to me so I can schedule a “Mortgage Fitness Checkup.” They may not need to do anything now, but it is beneficial to them that they begin to build a relationship with a trusted mortgage professional that can help them achieve their financial dreams!

Sincerely,



Christopher M. Scheer
Your Residential Lending Expert



p.s. For more information on the Equity Accelerator go to www.yourdebtfreecoach.com.

Sooner or Later I am Right!

Some of you may recall that 45 days ago I predicted the 30 year note to get to 6%. Then 2 weeks after that I again reiterated the stance. Well after the Fed stepped in and took over Fannie Mae and Freddie Mac, we have now seen the rates drop to 6% on a 30 year fixed. That is the good news, here is the bad news.

By taking over these institutions the government has put there finger in the dam. Now they are stuck there with there “finger” in the problem that is our mortgage industry. It is going to cost the tax payers BILLIONS to rescue these two giants. Compared to what we are spending in Iraq, that is a drop in the bucket, but none the less, it is Billions in dollars that could be better used to lower our debt as opposed to raise it. If the gamble pays off, and the money the government invests in Fannie and Freddie has a return, then they have made money. But when was the last time you wanted to gamble Billions of your hard earned dollars and that of your children?

A more realistic scenario is that these two entities become part of HUD in the next 4 years and lending guidelines for the next 4-8 years are slow to loosen. Regional banks and local banks will become the place creative financing, but only for those people that have excellent credit and significant assets or equity.

For questions or comments on this please contact Chris Scheer at cscheer@cornerstonestl.com or 314.223.9824.