Friday, May 28, 2010
Thursday, May 20, 2010
Foreclosure Filings down in April
ForeclosureRadar (www.foreclosureradar.com), the only website that
tracks every California foreclosure and provides daily auction updates, issued its monthly California Foreclosure Report for April 2010. Foreclosure filings were down in April for the first time since the beginning of the year. Despite the decline in filings, the inventory of properties in preforeclosure or scheduled for sale only dipped slightly as the drop in filings were offset by an increase in the time to foreclose. Cancellations continue to climb, up more than 32 percent from the beginning of the year. The number of properties sold to 3rd parties also continues to climb, helped again this month by slightly better
discounts.
“The steady rise in cancellations leads us to believe that loan modifications and short sales are gaining traction” says Sean O’Toole, Founder and CEO of ForeclosureRadar.com. “I’d caution, however, that cancellations also occur due to filing errors and extended postponements, which require the Notice of Trustee Sale to be re-filed. In fact, 14.6 percent of new Notice of Trustee filings in April were on previously
cancelled foreclosures.”
Notice of Default filings are the first step in the foreclosure process. Notice of Trustee Sale filings set the date and time of auction and serve as the homeowner’s final notice before sale.
Foreclosure Filings Foreclosure Cancellations Continue to Climb Short sales and loan modifications are not the only explanation
After the filing of a Notice of Trustee Sale, there are only three possible outcomes. First, the sale can be Cancelled for reasons that include a successful loan modification or short sale, a filing error, or a legal requirement to re-file the notice after extended postponements. Alternatively, if the property is taken to sale, the Bank will place the opening bid. If a 3rd party, typically an investor, bids more than the bank’s opening bid, the property will be Sold to 3rd Party; if not, it will go Back to Bank and become part of that bank’s REO
inventory.
Preforeclosure inventory is an estimate of the number of properties that have had a Notice of Default filed against the property, but have not yet been Scheduled for Sale. The Scheduled for Sale inventory indicates those properties that have had a Notice of Trustee Sale filed, but have not yet been sold or had the sale
cancelled. The Bank Owned (REO) inventory indicates the number of properties that have been sold Back to Bank at the trustee sale, and which the bank has not yet resold to another party.
tracks every California foreclosure and provides daily auction updates, issued its monthly California Foreclosure Report for April 2010. Foreclosure filings were down in April for the first time since the beginning of the year. Despite the decline in filings, the inventory of properties in preforeclosure or scheduled for sale only dipped slightly as the drop in filings were offset by an increase in the time to foreclose. Cancellations continue to climb, up more than 32 percent from the beginning of the year. The number of properties sold to 3rd parties also continues to climb, helped again this month by slightly better
discounts.
“The steady rise in cancellations leads us to believe that loan modifications and short sales are gaining traction” says Sean O’Toole, Founder and CEO of ForeclosureRadar.com. “I’d caution, however, that cancellations also occur due to filing errors and extended postponements, which require the Notice of Trustee Sale to be re-filed. In fact, 14.6 percent of new Notice of Trustee filings in April were on previously
cancelled foreclosures.”
Notice of Default filings are the first step in the foreclosure process. Notice of Trustee Sale filings set the date and time of auction and serve as the homeowner’s final notice before sale.
Foreclosure Filings Foreclosure Cancellations Continue to Climb Short sales and loan modifications are not the only explanation
After the filing of a Notice of Trustee Sale, there are only three possible outcomes. First, the sale can be Cancelled for reasons that include a successful loan modification or short sale, a filing error, or a legal requirement to re-file the notice after extended postponements. Alternatively, if the property is taken to sale, the Bank will place the opening bid. If a 3rd party, typically an investor, bids more than the bank’s opening bid, the property will be Sold to 3rd Party; if not, it will go Back to Bank and become part of that bank’s REO
inventory.
Preforeclosure inventory is an estimate of the number of properties that have had a Notice of Default filed against the property, but have not yet been Scheduled for Sale. The Scheduled for Sale inventory indicates those properties that have had a Notice of Trustee Sale filed, but have not yet been sold or had the sale
cancelled. The Bank Owned (REO) inventory indicates the number of properties that have been sold Back to Bank at the trustee sale, and which the bank has not yet resold to another party.
Friday, May 7, 2010
How To Buy a Foreclosure
How to buy a foreclosure
By Les Christie, staff writerMay 4, 2010: 5:44 AM ET
NEW YORK (CNNMoney.com) -- You want to buy a foreclosure? Remember, there are both great opportunities and great pressures and pitfalls in this market.
First, you have to decide at what stage of foreclosure you want to buy. There are three options: 1. pre-foreclosure; 2. sheriff's auction; 3. repossession, called REO (for real estate owned by the bank).
"The safest and best way to buy is when it's a bank-owned property," said Rick Sharga, a spokesman for RealtyTrac, the online marketer of foreclosure properties.
Pre-foreclosure: These homes are in the foreclosure process, but they have yet to be sent to auction. Owners are typically trying to unload them because they are "underwater," owing more on the homes than they are worth.
As a result, potential buyers must negotiate a deal with the lender as well as the owner.(This process is called a "Short Sale" and needs the attention of an experienced agent) That makes buying at this stage of foreclosure complicated and slow. But, you have the advantage of being able to inspect the home before purchase -- which isn't the case in other types of foreclosure sales. Sharga warned, however, that prices are usually higher than at other stages of foreclosure.
Sheriff's auction: These sales yield the lowest prices, but they are fraught with difficulties. Often the house is unavailable for inspection, leaving buyers with a long list of expensive repairs -- and much larger bill than they intended. This stage is usually best left to the professionals, the contractors and investors who regularly bid on these places and know what they're doing.
Repossession: This occurs after the home has gone through a sheriff's auction but does not sell and the bank gains possession of the property. Homebuyers may not get the best bargains during this stage, but they can nearly always perform a thorough inspection before closing, minimizing costly surprises. Plus, the property comes with a clear title.
In addition, the banks selling these places may extend preferential financing terms to the buyers and may have made some repairs before putting the property on the market.
Even in this safer stage, though, homes are still usually sold in "as is" condition. "That means the bank won't pay for cosmetic issues," said Adam Wiener, a spokesman for the Redfin, the online real estate marketer. "Although, they will often pay for some or all of repairs that are health and safety issues. That makes the home inspection even more critical."
He also pointed out that, since you're buying from a corporation, not an individual, the buying process can be faster, so be prepared to move quickly. Many times a listing goes on sale on a Friday and is sold over the weekend.
"The buyers and their agents need to be on top of everything from the inspection to the financing," said Wiener. "Some banks will even charge a per diem fee for late closings."
Once you've decided which type of home to buy, there are several common mistakes foreclosure buyers should take care to avoid. These include:
Getting caught up in a bidding frenzy: The banks often under-price repossessions, hoping to generate excitement, attract multiple bids and sell them quickly. The problem is, as in any auction-type sale, bidders get excited and pay too much.
"Remember," said Sharga, "there are 800,000 REOs in the banks' inventories. There'll be another home to bid on tomorrow."
Underestimating repair costs: Take full advantage of the home inspection and don't delude yourself about much the repairs will cost.
"Take along someone who can give you a good estimate of how much repair costs will come to," said Sharga.
Redfin coaches its agents to warn buyers to factor in a cushion of 10% to 20% of the purchase price to pay for unexpected repairs. "If you end up not using it, go on vacation after 6 months," Wiener said.
Not knowing what comparable properties cost: This is important in any market but especially in this endeavor. In high foreclosure areas, prices can be eroding very quickly. You want to have the latest homes sale prices on repossessed properties and try to keep your bid comparable or lower.
Buying in a neighborhood flooded with foreclosures: This is most important for people buying for the short-term. Any neighborhood saturated with REOs and foreclosures may be headed for further price falls. If you're planning to relocate within a few years or buying a bigger house, that could mean selling at a loss. A better bet, if you can find it, is to buy the only foreclosed home in an otherwise stable community. That's more likely to hold its value.
Not having financing in place: If you don't have a pre-approved mortgage, you're really not in the market. "You have to be able to move quickly," Sharga said.
Banks don't want to dilly-dally on sales; they're losing money every day that homes sit on the market. That means they'll often jump on the highest bid with the best financing already in place.
Having a loan beforehand carries another advantage: It tells you how much credit you have available. You won't spend time shopping for homes that are too expensive.
Remember that pre-approved financing is different from pre-qualified financing; it means the loan is ready to go. Pre-qualified is more like an opinion of a loan officer and there's still work to be done before final approval
By Les Christie, staff writerMay 4, 2010: 5:44 AM ET
NEW YORK (CNNMoney.com) -- You want to buy a foreclosure? Remember, there are both great opportunities and great pressures and pitfalls in this market.
First, you have to decide at what stage of foreclosure you want to buy. There are three options: 1. pre-foreclosure; 2. sheriff's auction; 3. repossession, called REO (for real estate owned by the bank).
"The safest and best way to buy is when it's a bank-owned property," said Rick Sharga, a spokesman for RealtyTrac, the online marketer of foreclosure properties.
Pre-foreclosure: These homes are in the foreclosure process, but they have yet to be sent to auction. Owners are typically trying to unload them because they are "underwater," owing more on the homes than they are worth.
As a result, potential buyers must negotiate a deal with the lender as well as the owner.(This process is called a "Short Sale" and needs the attention of an experienced agent) That makes buying at this stage of foreclosure complicated and slow. But, you have the advantage of being able to inspect the home before purchase -- which isn't the case in other types of foreclosure sales. Sharga warned, however, that prices are usually higher than at other stages of foreclosure.
Sheriff's auction: These sales yield the lowest prices, but they are fraught with difficulties. Often the house is unavailable for inspection, leaving buyers with a long list of expensive repairs -- and much larger bill than they intended. This stage is usually best left to the professionals, the contractors and investors who regularly bid on these places and know what they're doing.
Repossession: This occurs after the home has gone through a sheriff's auction but does not sell and the bank gains possession of the property. Homebuyers may not get the best bargains during this stage, but they can nearly always perform a thorough inspection before closing, minimizing costly surprises. Plus, the property comes with a clear title.
In addition, the banks selling these places may extend preferential financing terms to the buyers and may have made some repairs before putting the property on the market.
Even in this safer stage, though, homes are still usually sold in "as is" condition. "That means the bank won't pay for cosmetic issues," said Adam Wiener, a spokesman for the Redfin, the online real estate marketer. "Although, they will often pay for some or all of repairs that are health and safety issues. That makes the home inspection even more critical."
He also pointed out that, since you're buying from a corporation, not an individual, the buying process can be faster, so be prepared to move quickly. Many times a listing goes on sale on a Friday and is sold over the weekend.
"The buyers and their agents need to be on top of everything from the inspection to the financing," said Wiener. "Some banks will even charge a per diem fee for late closings."
Once you've decided which type of home to buy, there are several common mistakes foreclosure buyers should take care to avoid. These include:
Getting caught up in a bidding frenzy: The banks often under-price repossessions, hoping to generate excitement, attract multiple bids and sell them quickly. The problem is, as in any auction-type sale, bidders get excited and pay too much.
"Remember," said Sharga, "there are 800,000 REOs in the banks' inventories. There'll be another home to bid on tomorrow."
Underestimating repair costs: Take full advantage of the home inspection and don't delude yourself about much the repairs will cost.
"Take along someone who can give you a good estimate of how much repair costs will come to," said Sharga.
Redfin coaches its agents to warn buyers to factor in a cushion of 10% to 20% of the purchase price to pay for unexpected repairs. "If you end up not using it, go on vacation after 6 months," Wiener said.
Not knowing what comparable properties cost: This is important in any market but especially in this endeavor. In high foreclosure areas, prices can be eroding very quickly. You want to have the latest homes sale prices on repossessed properties and try to keep your bid comparable or lower.
Buying in a neighborhood flooded with foreclosures: This is most important for people buying for the short-term. Any neighborhood saturated with REOs and foreclosures may be headed for further price falls. If you're planning to relocate within a few years or buying a bigger house, that could mean selling at a loss. A better bet, if you can find it, is to buy the only foreclosed home in an otherwise stable community. That's more likely to hold its value.
Not having financing in place: If you don't have a pre-approved mortgage, you're really not in the market. "You have to be able to move quickly," Sharga said.
Banks don't want to dilly-dally on sales; they're losing money every day that homes sit on the market. That means they'll often jump on the highest bid with the best financing already in place.
Having a loan beforehand carries another advantage: It tells you how much credit you have available. You won't spend time shopping for homes that are too expensive.
Remember that pre-approved financing is different from pre-qualified financing; it means the loan is ready to go. Pre-qualified is more like an opinion of a loan officer and there's still work to be done before final approval
Tuesday, April 20, 2010
Friday, April 16, 2010
Loan Modification Update!
Metrics for the Making Home Affordable Program (HAMP) improved substantially during March according to data released late Wednesday by the Treasury Department. The foreclosure prevention program, a joint effort by Treasury and the Department of Housing and Urban Development, has been widely criticized for its effectiveness in moving distressed borrowers into permanent loan modifications.
During the March, however, over 60,000 homeowners enrolled in the three month trial period required by the program were converted into permanent modifications. This brings the cumulative total of permanent loan modifcations to 230,801. The March conversions represent a 15 percent increase over the 53,000 accomplished in February and a 3.5-fold rise in permanent modifications since the first of the year. An additional 108,000 permanent modifications are pending; most are awaiting approval from the borrower.
In terms of the overall conversion rate, 16.1 percent of all offers extended have been converted to permanent loan modifications. Much improved from last month's rate of 12.6 percent. When measuring performance against the number of HAMP trial offers that have actually been accepted, 19.8 percent of homeowners who have completed the 3-month period have been converted to a permanent modification. Again, much better than the 15.6 percent conversion rate reported in February.
The number of homeowners entering the program, however, is declining as might reasonably be expected after the initial flood of applicants. There were 57,000 new entrants into the program in March compared to 72,000 in February. A total of 1.44 offers for modifications have been extended to borrowers and 1.17 million homeowners have started the trial modification program.
There was a large number of trial modifications cancelled during the month. Since the program started in the spring of 2009, there have been a total of 155,000 cancellations, 66,500 of which were recorded in March. The report provided no explanation for this number. A total of 2,879 permanent modifications have been cancelled compared to 1,400 reported last month.
Under HAMP, borrowers are offered a five year modification of their existing mortgage based on a debt to income ratio that cannot exceed 31 percent. The servicers who administer the program can offer an extension of the loan term, a reduced interest rate, and/or a reduction of the principal balance. 100 percent of the modifications to date have included an interest rate reduction, 39 percent have involved an extension of the term of the loan and 28 percent have had some type of principal reduction or forbearance. Servicers have been reluctant to offer forbearance to borrowers and HAMP has recently announced a new component of the program to encourage this method of modification.
The HAMP report estimates that approximately 6 million residential mortgages are currently 60 days or more in arrears and that approximately 1.7 million of these are eligible for the HAMP program. Servicers are encouraged to contact borrowers to request information regardless of their apparent eligibility. To date servicers have sent out over four million solicitation letters.
CitiMortgage and GMAC continue to be the most active participants in the program; both have nearly 50 percent of their estimated eligible borrowers enrolled in trial or permanent modifications.
The reasons for delinquency as reported by the borrowers have remained relatively consistent over the life of the program; 59.1 percent report that their hardship was caused by a loss of income (a slight increase from 57.4 percent in February), 10.5 say it is excessive obligations and 2.8 percent report their delinquency was principally caused by the illness of the principal borrower. Combined with the fact that 44.1 percent of the 6.5 million unemployed Americans have been out of work for longer than six months, this statistic implies the true test of HAMP's success will be whether or not permanent loan modifications are able to avoid re-default.
During the March, however, over 60,000 homeowners enrolled in the three month trial period required by the program were converted into permanent modifications. This brings the cumulative total of permanent loan modifcations to 230,801. The March conversions represent a 15 percent increase over the 53,000 accomplished in February and a 3.5-fold rise in permanent modifications since the first of the year. An additional 108,000 permanent modifications are pending; most are awaiting approval from the borrower.
In terms of the overall conversion rate, 16.1 percent of all offers extended have been converted to permanent loan modifications. Much improved from last month's rate of 12.6 percent. When measuring performance against the number of HAMP trial offers that have actually been accepted, 19.8 percent of homeowners who have completed the 3-month period have been converted to a permanent modification. Again, much better than the 15.6 percent conversion rate reported in February.
The number of homeowners entering the program, however, is declining as might reasonably be expected after the initial flood of applicants. There were 57,000 new entrants into the program in March compared to 72,000 in February. A total of 1.44 offers for modifications have been extended to borrowers and 1.17 million homeowners have started the trial modification program.
There was a large number of trial modifications cancelled during the month. Since the program started in the spring of 2009, there have been a total of 155,000 cancellations, 66,500 of which were recorded in March. The report provided no explanation for this number. A total of 2,879 permanent modifications have been cancelled compared to 1,400 reported last month.
Under HAMP, borrowers are offered a five year modification of their existing mortgage based on a debt to income ratio that cannot exceed 31 percent. The servicers who administer the program can offer an extension of the loan term, a reduced interest rate, and/or a reduction of the principal balance. 100 percent of the modifications to date have included an interest rate reduction, 39 percent have involved an extension of the term of the loan and 28 percent have had some type of principal reduction or forbearance. Servicers have been reluctant to offer forbearance to borrowers and HAMP has recently announced a new component of the program to encourage this method of modification.
The HAMP report estimates that approximately 6 million residential mortgages are currently 60 days or more in arrears and that approximately 1.7 million of these are eligible for the HAMP program. Servicers are encouraged to contact borrowers to request information regardless of their apparent eligibility. To date servicers have sent out over four million solicitation letters.
CitiMortgage and GMAC continue to be the most active participants in the program; both have nearly 50 percent of their estimated eligible borrowers enrolled in trial or permanent modifications.
The reasons for delinquency as reported by the borrowers have remained relatively consistent over the life of the program; 59.1 percent report that their hardship was caused by a loss of income (a slight increase from 57.4 percent in February), 10.5 say it is excessive obligations and 2.8 percent report their delinquency was principally caused by the illness of the principal borrower. Combined with the fact that 44.1 percent of the 6.5 million unemployed Americans have been out of work for longer than six months, this statistic implies the true test of HAMP's success will be whether or not permanent loan modifications are able to avoid re-default.
Tuesday, April 13, 2010
SENATE BILL 401 SIGNED TODAY--TAX DEBT FORGIVEN FOR SHORT SALES!
Brought to you by the CALIFORNIA ASSOCIATION OF REALTORS®
NO MORE STATE TAX ON FORGIVEN DEBT
Distressed homeowners no longer have to pay California state income tax on debt forgiven in a short sale, foreclosure, or loan modification. Enacted into law yesterday, Senate Bill 401 generally aligns California's tax treatment of mortgage debt relief income with federal law. For debt forgiven on a loan secured by a "qualified principal residence," borrowers will now be exempt from both federal and state income tax consequences. The existing federal exemption is for indebtedness up to $2 million, whereas the new California exemption is for indebtedness up to $800,000 and forgiven debt up to $500,000.
"Qualified principal residence" indebtedness is defined as debt incurred in acquiring, constructing, or substantially improving a principal residence. It includes both first and second trust deeds. It also includes a refinance loan to the extent the funds were used to payoff a previous loan that would have qualified.
The tax breaks apply to debts discharged from 2009 through 2012. Californians who have already filed their 2009 tax returns may claim the exemption by filing a Form 540X amendment.
Taxpayers who do not qualify for the above exemptions (e.g., second home or rental property) may nevertheless be exempt under other provisions. Most notably, taxpayers who are bankrupt are exempt from debt relief income tax. Also, taxpayers who are insolvent are exempt from debt relief income tax to the extent their current liabilities exceed current assets.
For more information about mortgage forgiveness tax consequences, go to California Franchise Tax Board's Mortgage Forgiveness Debt Relief Extended webpage and the Internal Revenue Service's Mortgage Forgiveness Debt Relief Act and Debt Cancellation webpage. The full text of Senate Bill 401 is available at www.leginfo.ca.gov.
C.A.R. provides REALTORS® with many legal articles covering a wide range of topics of interest. Some of the new or newly revised legal articles available at http://qa.car.org/ are as follows:
Homebuyer Tax Credit Chart 2010.
Internal Data Exchange (IDX).
NO MORE STATE TAX ON FORGIVEN DEBT
Distressed homeowners no longer have to pay California state income tax on debt forgiven in a short sale, foreclosure, or loan modification. Enacted into law yesterday, Senate Bill 401 generally aligns California's tax treatment of mortgage debt relief income with federal law. For debt forgiven on a loan secured by a "qualified principal residence," borrowers will now be exempt from both federal and state income tax consequences. The existing federal exemption is for indebtedness up to $2 million, whereas the new California exemption is for indebtedness up to $800,000 and forgiven debt up to $500,000.
"Qualified principal residence" indebtedness is defined as debt incurred in acquiring, constructing, or substantially improving a principal residence. It includes both first and second trust deeds. It also includes a refinance loan to the extent the funds were used to payoff a previous loan that would have qualified.
The tax breaks apply to debts discharged from 2009 through 2012. Californians who have already filed their 2009 tax returns may claim the exemption by filing a Form 540X amendment.
Taxpayers who do not qualify for the above exemptions (e.g., second home or rental property) may nevertheless be exempt under other provisions. Most notably, taxpayers who are bankrupt are exempt from debt relief income tax. Also, taxpayers who are insolvent are exempt from debt relief income tax to the extent their current liabilities exceed current assets.
For more information about mortgage forgiveness tax consequences, go to California Franchise Tax Board's Mortgage Forgiveness Debt Relief Extended webpage and the Internal Revenue Service's Mortgage Forgiveness Debt Relief Act and Debt Cancellation webpage. The full text of Senate Bill 401 is available at www.leginfo.ca.gov.
C.A.R. provides REALTORS® with many legal articles covering a wide range of topics of interest. Some of the new or newly revised legal articles available at http://qa.car.org/ are as follows:
Homebuyer Tax Credit Chart 2010.
Internal Data Exchange (IDX).
Wednesday, March 31, 2010
$18,000 in tax credits for first time homebuyer between May 1-June 30
Brought to you by the CALIFORNIA ASSOCIATION OF REALTORS®
$18,000 IN COMBINED HOMEBUYER TAX CREDITS FOR A LIMITED TIME
Californians have a brief window of opportunity to receive up to $18,000 in combined federal and state homebuyer tax credits. To take advantage of both tax credits, a first-time homebuyer must enter into a purchase contract for a principal residence before May 1, 2010, and close escrow between May 1, 2010 and June 30, 2010, inclusive. Buyers who are not first-time homebuyers may use the same timeframes to receive up to $16,500 in combined tax credits if they are long-time residents of their existing homes as permitted under federal law, and they purchase properties that have never been previously occupied as provided under California law.
Under the federal law slated to soon expire, a first-time homebuyer may receive up to $8,000 in tax credits, and a long-time resident may receive up to $6,500, for certain purchase contracts entered into by April 30, 2010 that close escrow by June 30, 2010. Additionally, under a newly enacted California law, a homebuyer may receive up to $10,000 in tax credits as a first-time homebuyer or buyer of a property that has never been occupied. The new California law applies to certain purchases that close escrow on or after May 1, 2010 (see Cal. Rev. & Tax Code section 17059.1(a)(4)). California law generally allows buyers of never-occupied properties to reserve their credits before closing escrow, but buyers seeking to combine the federal and state tax credits will not be able to satisfy the timing requirements for such reservations (see Cal. Rev. & Tax Code section 17059.1(c)(1)(A)). Other terms and restrictions apply to both tax credits.
For more information, C.A.R. offers a Homebuyer Tax Credit Chart with a side-by-side summary of the federal and California laws. C.A.R. also offers a legal article entitled Homebuyer Tax Credit Update.
$18,000 IN COMBINED HOMEBUYER TAX CREDITS FOR A LIMITED TIME
Californians have a brief window of opportunity to receive up to $18,000 in combined federal and state homebuyer tax credits. To take advantage of both tax credits, a first-time homebuyer must enter into a purchase contract for a principal residence before May 1, 2010, and close escrow between May 1, 2010 and June 30, 2010, inclusive. Buyers who are not first-time homebuyers may use the same timeframes to receive up to $16,500 in combined tax credits if they are long-time residents of their existing homes as permitted under federal law, and they purchase properties that have never been previously occupied as provided under California law.
Under the federal law slated to soon expire, a first-time homebuyer may receive up to $8,000 in tax credits, and a long-time resident may receive up to $6,500, for certain purchase contracts entered into by April 30, 2010 that close escrow by June 30, 2010. Additionally, under a newly enacted California law, a homebuyer may receive up to $10,000 in tax credits as a first-time homebuyer or buyer of a property that has never been occupied. The new California law applies to certain purchases that close escrow on or after May 1, 2010 (see Cal. Rev. & Tax Code section 17059.1(a)(4)). California law generally allows buyers of never-occupied properties to reserve their credits before closing escrow, but buyers seeking to combine the federal and state tax credits will not be able to satisfy the timing requirements for such reservations (see Cal. Rev. & Tax Code section 17059.1(c)(1)(A)). Other terms and restrictions apply to both tax credits.
For more information, C.A.R. offers a Homebuyer Tax Credit Chart with a side-by-side summary of the federal and California laws. C.A.R. also offers a legal article entitled Homebuyer Tax Credit Update.
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