With mortgage rates are hovering near all-time lows, lots of Americans are taking advantage of refinance and home buying opportunities. 

The downside of today's unexpectedly-low rates, though, is that mortgage lenders are ill-equipped for the rush of new business. 

As a result, the process of underwriting and approving new mortgage applications is taking some conforming lenders as long as 2 months to complete. 

This is double the time needed as recently as six months ago.

Because there may be 60 days between the application date and the closing date, it's important for applicants to remember that mortgage approvals can be revoked at any time prior to funding. 

As mortgage applicants, there are many events that are out of our control -- job security and health matters, for example.  But there are also events that are within our control. 

Knowing that mortgage approvals can be fragile, here are 8 things you should absolutely not do while your home loan is in process.  It may be the difference between being approved by the bank, and being turned down.

1. Don't buy a new car or trade-up to a bigger lease.
2. Don't quit your job to change industries
3. Don't switch from a salaried job to a heavily-commissioned job
4. Don't transfer large sums of money between bank accounts
5. Don't forget to pay your bills -- even the ones in dispute
6. Don't open new credit cards -- even if you're getting 20% off
7. Don't accept a cash gift without filing the proper "gift" paperwork
8. Don't make random, undocumented deposits into your bank account

Now, avoiding these items may not be practical for everyone.  For example, if your car lease is expiring and you need a larger vehicle, it doesn't mean you can't buy the car -- just check with your loan officer first to be sure the new payments won't "break" your approval. 

The same goes for accepting cash gifts from parents.  There's a right way and a wrong way to accept gifts and doing it the wrong way may prevent you from using the gift as a source of downpayment.

Mortgage lending is full of "gotchas" and with underwriting times stretching to 60 days, it's a lot more likely that a mortgage applicant will trip into one.  Following these 8 rules, though, is a good start.

Hello again, I was just looking at the listing inventory of available houses for some potential buyer clients of mine, and was struck by the thought in my headline – Whatever happened to the old adage of “Sell high, and buy low”?  That has always been a preferred position to be in, with regard to just about any financial investment, including that of your residence.

For the past couple of years though, that – selling high - has not been a realistic goal for most home sellers.  The adage IS working fine now, for most buyers, especially with the number of distressed properties that have been – and will continue to be – on the market in the past 5, 6 months, and probably for the next year.

The biggest issue that most of my prospective buyers face is, unfortunately, most of them need to be sellers before they can buy.  The problem is this.  Most of these houses that need to be sold are attractive houses in nice areas, in good locations with numerous amenities.  These are what has become to be called “equity properties” as opposed to the majority of listings that are presently going into escrow, known as “distressed properties” – the short sales, the REOs, ( lender repossessions.) and the corporate relocations, all of which are fighting tooth and nail to go into escrow with a limited supply of non-contingent ( no house to sell.) buyers – the higher the price range, the fewer the non-contingent buyers.

The problem this is presenting to equity sellers is that these distressed properties are typically priced 15-20%, or more, lower than nearby equity properties.  In a market like this, the equity seller has to have something incredibly special or unique in order to even attract an offer.  Most properties in this category really are nice, but frequently, so is the distressed property down the street, or Heaven forbid, right next door!  Consequently, the majority of potential equity sellers are faced with two possible solutions.

First, to accept the premise that, if you’re going to get a good deal on one of these distressed houses, you are going to have to offer a competitive deal on your house – you have to price it as aggressively as the distressed owners are.  That, my friends is a big pill to swallow, but in the majority of cases it has to be done.  As it turns out, if the properties are all priced competitively, those extra features that have made your house a home for these past few years, will help you get one of the non-contingent buyers to make an offer on yours, instead of the dreary house down the street, with missing appliances and a dying lawn.  You might even get more than the distressed house, just not a lot more.  Maybe, getting back 5 or 10% of the 15-20% difference, between the typical list prices.  So, you’ll have to sell kinda low, in order to buy low.

By the way?  There are a LOT of uncompetitive equity sellers sitting on the market – the operative word is sitting.  They are old school sellers, determined to get back a fair value compared to what they thought their house was worth a year or two ago.  Many are just “trying to see if they can sell”. Frankly, maybe one or two in a hundred, gets “lucky”.  Those are not good odds.  The majority of these, eventually expire, and disappear from the market, withdrawing to wait for a better time. ( That probably won’t be coming for at least a year.)

Here’s the other best alternative.  Make your present house a rental property.  That too, presents problems, though.  First, not everyone has the 20-30% down payment needed for their next purchase just sitting around in cash.  A few years ago it was pretty easy to pull some of the equity out of the old house, to use as the down payment on the new one.  Those days, as well, are but a memory.  As the values of most properties have gone down, whether only 10% or even 25-30%, that borrowable equity has typically evaporated.

To make matters worse, the lender on the new house, while wanting a 20-30% down payment, if they see that you’re intending to rent your old house out, want to see 30% equity in that also!  That, is a deal breaker, for most folks.  The bottom line?  If you want to take advantage of the low prices the one of these distressed properties, you’re going to need substantial resources – mostly cash.  The good news?  Interest rates are unbelievably low – under 5% up to loans of $729,750, and less than 6% on loans up to $3 million!  Those make for incredible opportunities!

Would you like to sit down and brainstorm the possibilities?  I would be happy to crunch the numbers with you, to see if there are viable options.  I have done such crunching through all types of markets, a couple similar to this one, over the past 32+ years.  Shoot me an email – Bob@BobPhillips.net – or give me a call – (949) 643-2100, and let’s talk real estate.

If you're in want of a cash out refinance, the most liberal cash-out program in town is about to make qualification more difficult. 

Effective April 1, 2009, the FHA is reducing the maximum loan-to-value on cash-out refinances by 10 percent, dropping the loan size limit from 95% of the home's value to 85%.

In its official press release, the FHA says it's making the change to "limit its exposure to undue risk". 

It also lists the following cash-out requirements:

• With less than 12 months since the purchase date, a home's value cannot exceed its original purchase price -- even if home improvements were made.
• A homeowner must be current on his mortgage payments to qualify
• A second, verifying appraisal may be necessary, depending on loan traits
• Co-signers may not be added to the mortgage note in order to qualify

The last day to register a FHA 95% cash out refinance is Tuesday, March 31, 2009.  The loan does not need to be "locked" -- only registered. 

So, if you know that a 95% cash out FHA refinance is in your future, talk to your loan officer before Wednesday morning about registration.

The national housing market got its third piece of good news in 3 days:

• Monday: Existing Home Sales up
• Tuesday: Home values appear higher nationally
• Wednesday: New Home Sales up

And although national real estate statistics are irrelevant to the local markets in which real estate transactions happen, to a country of would-be and wanna-be home buyers, repeated positive news on housing can be a strong signal that it's time to get off the sidelines.

At least, that's what the data is showing us.  According to an industry trade group, first-time home buyers accounted for half of all sales of previously-owned homes. 

The stimulus package's $8,000 tax credit likely played a role in this 50 percent figure, as well as sagging home prices in most markets and low mortgage rates nationwide.

But lest we carried away, we can't forget that February's New Home Sales is still the second-lowest tally on record and that two months of data doesn't define "turnaround".

On the other hand, if the trend continues through the Spring Buying Season, we'll likely look back at Winter 2009 as the low point in housing.

(Image courtesy: LA Times)

Don't look now but oil prices are climbing.

This should worry today's home buyers and would-be refinancers because some of the same forces that helped to push crude past $50 for the first time in 4 months also cause mortgage rates to rise.

March 18, the Federal Reserve committed an additional $1.15 trillion to support the economy. 

Since the announcement, investors have questioned whether the Fed is purposefully spurring inflation.  The Fed's total debt purchases now total $1.75 trillion.

And to finance its purchases, the Federal Reserve is printing new money, devaluing the U.S. dollar along the way.  This then leads to inflation which, all things equal, causes oil prices to rise, gas prices to rise, and mortgage rates to go with them.

As we've seen the last few summers, oil prices and mortgages seem to touch their yearly high points while the weather is warmest.

(Image courtesy: The Wall Street Journal)

I’ve just read the latest Orange County Market Report, by my friend Steven Thomas, the President of Altera Real Estate Services.  Steven has a degree in quantum economics and for the past couple of years his bi-weekly report has been the most comprehensive compilation of real estate activity and data for our area – regularly cited by all the major news media in Southern California, as a source for excellent, up to the minute real estate information.  Here is a link to his latest report:

Orange County Housing Report: 21% Fewer Distressed Homes on the Market

My conclusions upon reading it pretty much validate what I have been seeing first hand, in open house activity, and in conversations with prospective buyers and sellers.  There is a burgeoning realization that real estate interest is coming back to the forefront, fueled by the prices of distressed properties, and the availability of incredible interest rates, in virtually all price ranges.

This combination of ingredients, coupled further with pent-up demand, is producing an attractive opportunity for prospective buyers, in all but the lowest price ranges – those under $450,000.. In South Orange County, which I serve, due to a furious scramble in that lower price range, with multiple offers being the norm, and sales prices averaging 101% of list price, this lower range is actually an extreme seller’s market, as banks hurry to liquidate their inventory, to hungry first time buyers and investors clamoring for the best buys.

In the higher ranges, those over $500,000., there are still exceptional opportunities in virtually every price range up to over $2,000,000.!  These are not attracting multiple offers, and for the most part, are providing potential buyers with a bit of time to contemplate their options, and to secure financing.  The biggest issue buyers in the higher ranges are experiencing is whether they can buy such a house without a contingency – such as a need to sell their present house.  If that is a concern, then there is a problem, unless they are open to this scenario.  They have to sell low, in order to buy low.  There is no such thing in today’s market, as selling high, and buying low.

The best alternative – IF they have plenty of cash reserves or plenty of equity, is to make their present house a rental for a few years until the market for selling it becomes more attractive – which it eventually will, again.  I am well schooled in crunching the numbers to weigh various options and would be pleased to talk to you about your real estate plans or dreams.  I’ve been doing so in this community for well over 32 years.  Give me a call, at 949-643-2100 and lets talk about real estate.

Among the key findings of each Existing Home Sales report is something called the "median sales price", the statistical price point at which half of the homes in the U.S. sold for more, and half sold for less. 

Last month, the median sales price in the United States fell to $165,400, down 15.5 percent from a year ago.

Nevertheless, just because the median sales price is lower from last year doesn't mean that the housing market is losing steam. The median sales price is just the middle point of all home sales in all U.S. markets.  By definition, it groups New York City and Danville, Illinois; Los Angeles and Cheyenne -- markets that have little do with one another. 

When median sales prices are falling, it doesn't point to housing weakness, per se -- just that more homes are selling at the lower end of the pricing spectrum than at the higher end.

Going forward, it's believed that a reduction in home supplies is the key to a complete, national housing recovery.  It's encouraging, therefore, in a month known for a high volume of new listings, that the number of homes sold kept pace with the number of new homes available for sale. 

The current housing inventory stands at 9.7 months, flat from January.

(Image courtesy: The Wall Street Journal)

With the official start of Spring last week comes the official start of Spring Cleaning Season nationwide.

In some homes, Spring Cleaning is an annual ritual, tackled within one sweat-filled, rubber-gloved weekend.  In other homes, it's a less serious endeavor. 

Either way, it helps to have a game plan.

Courtesy of Martha Stewart's website, the Spring Cleaning Organizer is a 9-step checklist covering all of the basics. 

• Clean shades and windows
• Sort through wardrobes
• Clean and rotate mattresses and cushions

Most of the checklist items can be retired with household cleansers and vacuums.  A few, however, require heavy-duty appliances that you may not have at-home.  For example, cleaning carpets and rugs is best-handled with a steam cleaner; and, washing windows may be too dangerous, depending on your home.

If you don't want to rent cleaning equipment from your local hardware store just for Spring Cleaning, consider hiring an Angie's List contractor to do the job for you.  It will cost more money than doing it yourself, but the job will get done right (and your home will be clean).

The Spring Cleaning checklist also reminds homeowners to check the batteries of in-home safety devices like smoke alarms, carbon monoxide detectors, and flashlights.

(Image courtesy: Junk Bee Gone)

For the fifth time in a year, rate shoppers learned an important lesson this week: When mortgage rates plummet unexpectedly, they often recover just as fast.

Wednesday, the Federal Reserve's newest $750 billion mortgage market pledge helped to push conforming mortgage rates near their lowest levels since WWII. 

24 hours later, however, those rates were expired.

After considering the long-term implications of the Federal Reserve -- literally -- printing new money to service the recession, markets grew fearful that the Fed's interventions will eventually lead to inflation.  Inflation, of course, is the enemy of mortgage rates.

So, if you're looking for the explanation of why rates rose as suddenly Thursday as they fell the day prior, this is it.  And, in hindsight, rate shoppers might have seen it coming, if only because we've seen the exact pattern 4 other times:

1. After the Fed's "surprise" rate cut in January 2008
2. After the Fannie Mae and Freddie Mac takeovers in September 2008
3. After the Fed announced its first $500 in support in November 2008
4. After the Fed zeroed out the Fed Funds Rate in December 2008

Sharp drops in mortgage rate, it seems, are followed by immediate bounce-backs. 

Unfortunately, not every would-be refinancing homeowner saw the increase coming.  People that locked Wednesday captured the lowest rates in 6 decades.  Everyone else wishes they had.

From day-to-day, we don't know if mortgage rates will rise or fall. Nobody knows that.  But, we do know that mortgage rates tend to follow patterns and we've seen the above pattern 5 times now.

When mortgage rates plunge like they did Wednesday, they rarely low for long. When you find a rate you like, get in and get locked as soon as possible. By tomorrow, it's likely to be gone.

The Federal Open Market Committee voted to leave the Fed Funds Rate unchanged today, within the target range of 0.000-0.250 percent.  This doesn't mean the Fed stood pat, however.

On plan to resurrect the economy using "all available tools", today, the Fed announced a new, $1.5 trillion round of fiscal support for the treasury and mortgage markets.

The stimulus will likely be Thursday morning's headline story.

In its press release, the FOMC touched upon a few of the prevailing economic issues, using these points as a legitimizing backdrop for its newest debt load:

• Job losses and wealth loss are dragging down consumer spending
• Some U.S. trading partners are falling into recession
• Businesses are cutting back on investment and inventory

Of interest is that the FOMC said today's inflation levels may be too low to support economic growth at all.  This condition is more commonly called deflation.  The Fed's latest actions, therefore, may be a deliberate attempt to induce inflation through unprecedented borrowing.

For home buyers and potential refinancers, this is terrific news -- at least in the short-term.  By introducing new demand for mortgage bonds, the Fed will help pressure mortgage rates lower.  Already this afternoon, mortgage rates fell and they will continue to fall until the market reaches a new equlibrium.

After the Fed's last intervention, markets reached their balance point in about a day-and-a-half.

Source
Parsing the Fed Statement
The Wall Street Journal Online
March 18, 2009
https://online.wsj.com/public/resources/documents/info-fedparse0903.html

There's a mixed message in February's Housing Starts data and it may be a good sign for home sellers in the near-term.

As reported by the government, new home construction rose by 22 percent last month.  The press is running with the headline number, calling it evidence of a market bottom.

A more thorough inspection, however, reveals a different story. 

The 22 percent figure applies to all homes built -- including apartment building units.  Isolating residential units, February's housing starts rose by just 1 percent.  Furthermore, the data's margin of error is 11 percent. 

Statistically, we can't know if residential housing starts really rose last month, or if it fell instead.  What we do know, though, is that the number of building permit requests rose.

Permits to build single-family homes were up 11 percent in February nationwide.

To home sellers, the rise in building permits may confirm that a housing market turnaround is already underway.  Builders wouldn't be putting new inventory on the market, after all, without being sure of their ability to sell it 9 months hence.

The headline figure of 22 percent is attractive, but it's not completely honest.  It's not the number of housing starts that matter so much right now as the number of housing permits.   A rise in permits signals that homebuilders -- a group that's lost a lot of money in the last 2 years -- think the worst of housing is already over.

(Image courtesy: The Wall Street Journal Online)

The Federal Open Market Committee begins a scheduled, 2-day meeting today to discuss the country's monetary policy.  As is custom, the group will issue a press release to the markets upon adjournment.

There are 8 scheduled FOMC get-togethers annually and the post-meeting press releases are among the most powerful market-moving events of the year.

It's not the Fed's actual policy changes that causes fortunes to be won or lost, though.

These changes can predicted and traded -- and, therefore, hedged -- on Wall Street using Fed Funds Rate Futures.  For example, Wall Street predicts with 97% certainty that the Federal Reserve will not make a policy change at this time.

As opposed to than policy change, it's the verbiage of the FOMC's press release that can really move markets.  This is because the press release is a clear-eyed look into what the Federal Reserve thinks of the United States economy -- its strengths, its weaknesses, and its threats.

After its January 2009 meeting, the FOMC's press release said:

• The economy has weakened further
• Employment has declined steeply
• A gradual recovery may come later in 2009

Since that meeting, though, a number of high-profile economists, including Fed Chairman Ben Bernanke, have said the likelihood of economic recovery increased for late-2009.

This is why tomorrow's FOMC press release is so important. It will contain clues about the Federal Reserve's next steps and current psyche.  Undoubtedly, it will make a significant impact on the mortgage markets.

In general, when the Fed alludes to inflation and stronger growth, mortgage rates rise.  Talk of a recovering economy and rising oil prices in tomorrow's press release, therefore, would likely raise rates from their current low levels towards levels not seen for 6 months.

In the end, it's what the Fed says that matters more than what the Fed does. The FOMC is expected to leave the Fed Funds Rate within its target range of 0.000-0.250 percent.

(Image courtesy: Wall Street Journal)

"Most of the biggest real estate fortunes were not made in good times, but in bad times like this" Barbara Corcoran reminds us in this talk with NBC. 

It's important perspective for Americans wondering how to invest in foreclosed properties without losing their cash or their credit rating.

In the 4-minute interview, Corcoran quips on the basics and the essentials of foreclosure investing,

• "Everyone who loses their shirt loses it somewhere else."
• "Every big shark started small."
• "The house on the corner sets the tone for the block."

She also lends some personal perspective to rent rolls, the cost of losing a tenant, and finding a good business partner.

Banks are anxious to sell their foreclosed homes and that makes this an ideal time for shrewd real estate investors.  If you're new to the game, watch the video and take good notes.

You know you're in the middle of an economic crisis when an accounting issue become Front Page News, and that's exactly where we're at today.

Mark-to-market accounting is having its day in the sun and people in need of mortgage sometime soon would do well to pay attention. 

If you've never heard of mark-to-market accounting, don't worry. Not many people have.  Mark-to-market is a method of valuing an asset based on its what-if-it-was-sold-today value.  Mark-to-market is officially known as FASB Statement 157.

Mark-to-market is one reason why bank balance sheets look so awful right now.  Banks have to assign firesale-like values to their mortgage-backed assets even if those loans are performing, and even if there's no plans to sell them.  Assigning low values to assets, then, in turn, forces the banks to seek TARP funds and take other measures to solidify their mandated capital requirments. 

Wall Street and Washington are taking notice of mark-to-market's impact on banking and, by extension, the economy.  Even Fed Chairman Ben Bernanke has expressed an interest in opening a dialogue about the matter.

So, today, starting at 10:00 AM ET, the House Committee on Financial Services meets with key members of the Securities and Exchange Commission, the Treasury, and the Financial Accounting and Standards Board to talk about mark-to-market accounting and whether it should be modified.

It's unlikely that change will come immediately, but if enough evidence shows that mark-to-market is unduly damaging to the economy, expect changes to the way we value banks to happen soon. 

For homeowners and home buyer, a reversal in mark-to-market rules would be a bad thing.  Almost overnight, bank balance sheets would recapitalize and the economy would spring forward.  This would reverse most of the pressures that have held mortgage rates low for so many months.

A healthy economy, in other words, may be bad for mortgage rates.

The basis of most mortgage lending is credit scoring.  In general, the higher a person's credit score, the lower his offered mortgage interest rate.

Despite the many credit scoring models in use today, however, just 3 are relevant to American homeowners:

• The Equifax BEACON^® score
• The Experian Fair Isaac Risk Model
• The TransUnion EMPIRICA^®

Generically, these scoring models generate what are commonly known as "FICO" scores.

FICO scores are measurements of probability.  The higher a person's credit score, by definition, the less likely a person is to default on his home loan.  This is one reason why credit scoring has added importance lately -- mortgage lenders are very careful about what they're lending and to whom.

Notably, minimum FICO thresholds have been added to all types of mortgage loans.

FICO scoring has 5 main components as listed above.  Payment history and credit capacity are two of the largest pieces, but a myriad of other factors contribute to a credit score, too.  For example, the longer your reported history of managing credit, the more favorably your credit score will respond.

This is one reason why closing a credit card can damage your credit score -- it wipes out the "reported history".

The myFICO.com website does a terrific job with credit education, explaining in plain language the ins-and-out of credit scoring and ways to boost your score.  It also makes a free, 20-page PDF available for download. 

Whether you're a homeowner or lifetime renter -- consider it required reading.

USA Today ran this 2008 Foreclosures By State heatmap last week, reminding us of a simple truth: Headline statistics can be misleading.

According to data compiled by RealtyTrac, 1 in 8 U.S. homes were in various stages of default or delinquency at the end of 2008.  This is a fact and it was widely reported by the press. 

However, as the heatmap plainly shows, in stripping out just 35 of the nation's 3,232 counties, we can decrease the number of foreclosures nationally by half. 

In other words, yes, 1 in 8 U.S. homes face mortgage trouble.  In your neighborhood, though, the ratio is likely much, much lower.  Real estate is a local phenomenon.  National statistics rarely apply.

Hello again,  Wow!  The tidal wave of information coming in on the various stimulus programs is practically overwhelming - for everyone.  Buyers, sellers, prospective borrowers, as well as Realtors and lenders.

The effect this has had is a brief slow-down of what had been an increasingly active spring market here in Orange County, to a pause, to stop and figure out whether any of these programs might be helpful to us.

The fact is, depending on your situation, if you're thinking of buying, or thinking of refinancing, or worried about the mortgage you're paying on, there is something for everyone.  Just look at the titles of my blog posts over the past month. I hope you are finding my blog to be a source of possible solutions.

Here is a link to my friend Steven Thomas' most recent Orange County Market Report.  It is chock filled with market insights, accompanied by a marvelous array of stats and charts.  Enjoy:

http://www.ouragentspot.com/sthomas/MarketTime-Mar-5-09.pdf

In conclusion, keep your ears to the ground, and stay alert, especially if you're looking for answers that will help you make good decisions for your long term goals.

If ever you have any comments or questions please contact me at 949-643-2100, or by email at Bob@BobPhillips.net   I'll have more to say tomorrow.  Have a great week, trying to keep up to speed.

If you asked an economist why home prices have broadly fallen over the past 2 years, you'd get a short lesson in Supply and Demand.

Too many homes for sale and not enough people to buy them pushed values lower until a balance point can be reached.

Looking at the chart at right, that balance point may be fast approaching.

According to data compiled by ZipRealty, the total number of homes listed for sale fell in February 2009 in 23 of 24 major housing markets. 

This is an especially important data point because home inventories typically rise in February, ahead of the Spring Home-Shopping Season. 

Since 1982, February home inventory has been up 3 percent on average. Last month, it fell.

So, in support of the Supply and Demand Theory, we shouldn't be surprised that the rate of price decline as shown by the Case-Shiller Home Price Index is easing in a lot of markets, too.

We may not have reached the bottom of housing yet, but if we haven't, the data is showing us that were likely very, very close.

Source
Home Listings for February Stayed Steady
James Hagerty
The Wall Street Journal, March 5, 2009
https://online.wsj.com/article/SB123620588396833321.html

When the White House first introduced the Making Home Affordable program in February, it was positioned as a mortgage program with two goals:

1. To help financially-needy homeowners get mortgage relief
2. To help homeowners who've lose equity qualify for today's low rates

Wednesday, in a much-anticipated announcement, the U.S. Treasury introduced new details about Making Home Affordable. 

It also created an "Am I Eligible For Making Home Affordable" form on its website.

In the press release, the Treasury detailed the President's original blueprint.  Namely, it provided explicit loan modification instructions that will assist up to 4 million delinquent homeowners and their respective mortgage servicers.  

The modification guidelines are a thorough 17 pages long and leave little question about the loan modification process, and how it must be carried out.

But for as much ink committed to helping delinquent homeowners, the Treasury gave surprisingly little guidance to the estimated 5 million homeowners for whom deteriorating home equity has rendered refinancing impossible. 

For these Americans, the Treasury instead offers a basic Q&A and directs homeowners to call Fannie Mae and/or Freddie Mac to confirm their eligibility. The "refinance plan", in summary, says that a homeowner who has paid his mortgage as agreed and whose home value is "about the same or less" as the amount owed on his first mortgage may be eligible.

That's about as much as the Treasury could say.

If after browsing the website, you still have questions about the Making Home Affordable program, call your mortgage lender with specific questions.

As part of the American Recovery and Reinvestment Act of 2009, the IRS has officially released Form 5405 -- better known as the First-Time Homebuyer Credit Form.

True to tax code standards, the 10-field form is accompanied by 3 pages of instructions.

Form 5405 is a helpful, go-to resource for home buyers with questions about the tax credit.

For example, the form distinguishes tax consequences for homes bought in 2008 versus 2009, and clearly defines the term "first-time home buyer".

In addition, Form 5405 highlights the math behind the tax credit.  In general, the First-Time Homebuyer Credit is equal to the lesser of:

• $8,000 for homes bought in 2009
• 10 percent of the home's purchase price

Married couples filing separately are entitled to half of the expected credit, and homes sold within 3 years are subject to a credit repayment in the year the home ceases to be the "main home".

Form 5405 is a comprehensive reference.  However, be sure to check with your accountant for specific questions about your personal returns and how the First-Time Homebuyer Credit may impact your finances.  There is no substitute for professional, paid advice.

Mortgage delinquencies are on the rise nationwide, but the news may not be as bad as it appears at first glance.

Using anonymous data from its national credit database, TransUnion reports that 4.58 percent of American homeowners were at least 60 days past due on mortgage payments last quarter.

Comparing the statistic to the data from a year ago, the credit reporting agency goes on to say that mortgage delinquencies are up 53 percent.

Although fair, the comparison carries a distinct, negative connotation because if we flip the data to its positive, the statistics don't seem nearly as menacing.

Consider: In the last quarter of 2008, 4.58 percent of homeowners were delinquent on their respective mortgages.  The positive sign, therefore, is that 95.42 percent of homeowners were not delinquent on their home loans.

Furthermore, in looking at TransUnion's data for the 5 largest states in the Union, it's clear that the national delinquency rate is being skewed by California and Florida.  New York and Texas, for example, exhibit delinquency rates below the national 4.58 percent marker.

North Dakota's delinquency rate hovers near 1 percent.

Headlines are designed to attract eyeballs and nothing else. To get the complete story, therefore -- the real story -- it never hurts to dig a little deeper into the facts.

(Image courtesy: TransUnion)