Senate blocks stimulus plan, now what? And some Indymac news

February 7th, 2008 · No Comments


If you have a client who sells their house at a loss, is it tax deductible? Generally speaking, one cannot use the loss to shelter gains in stocks: a loss on your home is a non-deductible personal item. Many homeowners, however, are taking other approaches. If one’s house has gone down in value, doing a quick internet search to determine the new value could result in lowering your property taxes. (A municipal assessor does this.) Can you deduct the cost of a home office? (Make sure that you have receipts for utilities & maintenance!) Doesn’t everyone have rich parents? If so, engage in a sales-leaseback arrangement, at market prices, if you think prices are going to continue to decline. Aside from engaging in trading in futures contracts, one can try to sell a piece of their house to an investor, giving up all or part of the future appreciation.

Money Magazine published a “See if you have what it takes to be the best of the market’s worst” quiz on what it takes to lose $7 billion, like the fellow in France did.  Click here for quiz

If you have a question about whether or not an appraiser is licensed and in good standing, it is a quick & easy click to find out: (for the state of California ). I imagine that other states have similar sites. But as investors have grown tighter and tighter, and questions about “loose” appraisals have increased, this is a valuable starting point.

The economic stimulus plan drafted by Senate Democrats was blocked by a Republican filibuster last night when the Senate fell a single vote short of the 60 needed to consider the measure. Now what? Since it is so close, experts believe that it nearly ensures passage of the House’s less expensive stimulus plan, though the Senate may make some changes. The Senate version was backed by automakers, home builders, realtors and mortgage bankers, and the AARP. Senate Republican leader Mitch McConnell of Kentucky said the Democratic stimulus bill passed by the Senate Finance Committee was “a Christmas tree of legislative goodies” that Bush might not sign. The alternative proposal passed by the House last week could be approved quickly and would be signed, he said, but Democrats face an uphill battle to get the 60 votes necessary to advance the more expansive Senate package in a procedural vote expected today. An interesting civics lesson, since I have forgotten most of what I learned in high school…

Indymac changed their maximum DTI ratio, regardless of DU or LP approval, to 60% for agency eligible programs (including MyCommunityMortgage, Flex, and FastForward). In addition, Indy has stated that lenders cannot have their loans locked in Quick Pricer for more than 7 business days. A lender must have all loans that are locked in Quick Pricer converted to EMITS on or before day 7 of the lock inception otherwise the lock is no longer valid.

Besides the Senate defeating their own version of the economic stimulus plan, we’ve had Jobless Claims this morning. They revealed further deterioration in the jobs sector, as claims were expected to drop to 344,000 but only dropped 22k to 356,000 from 378,000. We also have a Treasury auction of $9 billion of 30-yr Treasury bonds, which may or may not impact rates depending on how the auction goes. Speaking of rates, the 10-yr continues to hover around 3.60% and mortgage prices are slightly improved from yesterday afternoon, but probably about the same as yesterday’s rate sheets.

Muldoon lived alone in the Irish countryside with only a pet dog for company. One day the dog died, and Muldoon went to the parish priest and asked, “Father, my dog is dead. Could ya’ be saying’ a mass for the poor creature?”
Father Patrick replied, “I’m afraid not; we cannot have services for an animal in the church. But there are some Baptists down the lane, and there’s no tellin’ what they believe. Maybe they’ll do something for the creature.”
Muldoon said, “I’ll go right away Father. Do y a’ think $5,000 is enough to donate to them for the service?”
Father Patrick exclaimed, “Sweet Mary, Mother of Jesus! Why didn’t ya tell me the dog was Catholic?

Rob Chrisman

Tags: Commentary · Mortgage Market

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