The general answer largely depends on when you buy the property.

“If the property was foreclosed and possessed by the bank, the bank will have to pay the back taxes to sell the property with clear title,” says RealtyTrac spokesman Daren Blomquist. “However, if you purchase the property at the public foreclosure auction (on the courthouse steps) then you will be responsible for any senior liens, and property taxes fall into that category.”

With a short sale the situation is different. A short-sale is not a foreclosure. It’s a transaction where the lender agrees to allow a sale without a foreclosure even though the entire mortgage debt is not being repaid. In terms of property taxes a short sale is simply a sale with property taxes to be paid at closing. Who pays the property taxes? In some jurisdictions there is a tradition that the buyer will pay or that the seller will pay, but the issue can typically be negotiated.

For local practices speak with a nearby real estate broker or attorney who specializes in foreclosures.

Who Pays Foreclosure Property Taxes? is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

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At first this may seem like an audacious idea, a violation somehow of the free market absolutism preferred by so many businesses and industries — at least until they need a special rule, tax break or handout from Uncle Sam.

In fact, it was not too long ago that Uncle Sam actually set mortgage rates for government-insured loans. For instance:

• Until November 30, 1983 HUD set interest rates for FHA mortgages. The practice ended with passage of the Housing and Rural Recovery Act of 1983.
• Under the Veterans Home Loan Program Amendments of 1992, the VA is allowed to set the maximum interest rate that can be charged for a VA loan as well as the maximum number of points. Today, the VA still has the right to set mortgage rates for vets but has elected not to do so.

Imagine what would happen if the government set daily mortgage rates for FHA and VA loans. Each day at 9 AM the daily rate would be made available online. Every borrower would have an opportunity to see the available rate for qualifying borrowers. Borrowers could compare the FHA and VA rates with rates for conventional financing — meaning there would be no need to set conventional interest levels, though if we wanted that could also by done through the Federal Housing Finance Agency.

The rates would be show at “par” — meaning with zero points — and with points so that borrowers could see a number of rate-and-point combinations. For instance, today a loan might be at:

• 3.75 percent and 1 point.
• 4 percent and 0 point (par pricing)
• 4.25 and -1 point (borrower gets a cash credit at closing or lender pays some or all closing costs).

In a marketplace filled with openness and clarity borrowers would have more of a chance of getting a fair deal.

Alternatively, we could go back to 2006.

The Wall Street Journal says in 2006 that 61 percent of all subprime loans originated that year went to borrowers who actually qualified for FHA, VA and conventional mortgages. Think how much borrowers could have saved if only they had known their real financial position. Think how many foreclosures could have been prevented. (See: Subprime Debacle Traps Even Very Credit-Worthy, The Wall Street Journal, December 3, 2007).

And while lenders might object to HUD and the VA setting rates for their insured loan products, they certainly have not complained with new rules which have benefitted mortgage companies.

For instance,  HUD limits on lender fees for FHA borrowers were ended in November 2008 — just two weeks after the presidential election. The Bush Administration said it decided to “remove the current specific limitations on the amounts mortgagees presently are allowed to charge borrowers directly for originating and closing an FHA loan.”

While many lenders have acted fairly and in good faith, some have not. That’s why better regulation is needed and that’s why the government should publish daily loan rates that anyone with Internet access can see.

Should Government Set Mortgage Rates? is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

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If you don’t believe it, consider that one of the world’s largest banks is now charging wealthy clients a fee for cash holdings. According to the Wall Street Journal, the Bank of New York Mellon now says “that customers that have deposited more than $50 million into their accounts since the end of July will face an annual fee of at least 0.13% of the excess deposits. The fee would rise if the one-month Treasury yield dips below zero.”

Think about what this means: If you give your $50 million plus to the nice folks at the bank they will not pay you interest if Treasury rates fall below zero because there’s no interest being paid by the government PLUS they will change you .13 percent on the account balance for the privilege of holding your dollars. That means there will be an annual $65,000 cost to park $50 million.

There’s a term for this: Negative interest. Honest. It means you pay the bank.

We have seen this before.

Just before World War II U.S. securities had negative interest levels. As Forbes magazine explained nearly 20 years ago, “T-bills got so popular that for brief periods between 1938 and 1941 they carried negative interest rates.” (See: “A Brief History of Stock Fads,” September 14, 1992).

Why would anyone give money to a bank in exchange for negative interest?

One explanation is that it’s safer to keep money in a bank account than a mattress. Another reason is that a minimal loss is better than alternative “investments” where losses might be even greater.

Sadly, we have a country awash in cash at the very time the economy needs more spending. The catch is that:

• Workers can’t spend when job prospects are uncertain.
• Employers can’t hire when sale prospects are unclear.
• Banks can make money because they’re basic cost to access capital ranges from 0 to .25 percent — money they gleefully loan to credit card borrowers at 29.99 percent.
• Mortgage interest rates are at record lows — but home loans are tough to get because home values remain unsure.
• Home prices cannot rise because the huge numbers of foreclosures which remain unsold.
• Retirement accounts produce no meaningful income, meaning large numbers of people who saved and saved now face poverty.
• Heirs and heiresses can’t get lofty interest returns on the money left to them by Mummy.

The government — which CAN spend the money that could re-invigorate the economy — is being choked.  Effective tax rates — what’s actually being paid and not just what rules call for — are at the lowest levels in decades so the government cannot fund needed programs. The result is that a meaningful end to the current economic crisis is being stalled by the small-government, no taxes crowd that created it.

Is Negative Interest Coming To America? is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

Technorati Tags: Foreclosures, home, interest rates, loan, mortgage, negative interest, rate, treasury

Yes, now you can own your own pier, wharf or jetty. You say you need a sliding shipway, retaining basin, or pipeline? Can’t find a radio tower that’s just the right size? Well step up folks, step up now and place your bid for excess property owned by your government.

But wait, there’s more.

Ever want to own a hospital? “Buildings used primarily for furnishing in-patient diagnosis and treatment under physician supervision and having 24-hour-a-day registered graduate nursing services,” are available, says the government. “This category also includes medical laboratories used for routine testing. This category excludes buildings used directly in basic or applied medical research.”

And where are these properties you ask? Why just go to the handy state-by-state map and see what’s available.

For instance, how about a lovely Hawaiian property near the blue Pacific? To find the Kealia Pond NRW you go to the map, go to Hawaii and then view Kihei. This adorable warehouse is owned by the Fish and Wildlife Service, has a cozy 225 square feet and if you don’t buy it the plan is to demolish the structure.

According to the White House, the government should “sell or get rid of property it no longer needs, saving taxpayers $15 billion.”

“There are roughly 14,000 buildings and structures currently designated as excess and thousands of others that are underutilized. These properties range from sheds to underutilized office buildings and empty warehouses.”

Some 7,000 properties are plotted on the map, so who knows that hidden gems may be available. If you find something interesting please post a comment below.

Government Map Shows 7,000 Surplus Properties For Sale is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

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But, for the moment at least, put the pills away.

Now comes the latest edition of the Case-Shiller report which tells us that home prices were up a touch in April, the first time such positive results have been seen in eight months.

Is this the long-awaited ray of financial sunshine we would all like to see? It would be nice to say yes, economic redemption is here, but that’s not quite the case.

Troubled Bridge Over San Francisco Waters

More troubling is new construction at the San-Francisco-Oakland Bay Bridge.

Now you might wonder why a bridge project has anything to do with home prices or a national economic recovery. The answer goes like this: We cannot truly have higher home prices without more jobs and better wages — those are things you need before people can take out mortgages, pay higher prices or have more confidence in the economy.

The renewed San Francisco bridge is a $7.2 billion construction project which will feature a new span from San Francisco to Oakland. Spending so much money should be seen as a positive economic event because it employs companies and people, cash is spent and there is a multiplier effect which creates jobs and profits as well as a nice, shiny new bridge.

But there’s also a problem. A big part of the construction is taking place overseas. To be specific, large chunks of the bridge are being forged and fabricated in China and then shipped to the US for assembly.

Bridge managers say the foreign construction will save several hundreds of millions of dollars. That’s hardly a surprise given the wages paid to Chinese workers. The New York Times reports that “Pan Zhongwang, a 55-year-old steel polisher, is a typical Zhenhua worker. He arrives at 7 a.m. and leaves at 11 p.m., often working seven days a week. He lives in a company dorm and earns about $12 a day.” (see: Bridge Comes to San Francisco With a Made-in-China Label, June 26, 2011).

This happens a lot.  According to the Wall Street Journal, U.S. multinational corporations reduced domestic employment by “2.9 million during the 2000s while increasing employment overseas by 2.4 million, new data from the U.S. Commerce Department show. That’s a big switch from the 1990s, when they added jobs everywhere: 4.4 million in the U.S. and 2.7 million abroad.”

How can US workers compete with 75 cents an hour? What about Social Security and Medicare? And if US workers could somehow compete with 75 cents an hour, what would happen to our economy and our society? Would home prices hold up? Rental rates? Car prices? Would there be a middle class? Would we become a new and larger version of Haiti, a country with low taxes, minimum regulation, no social safety net and little public safety?

Not Made In America?

Brian A. Petersen, project director for the American Bridge/Fluor Enterprises joint venture that’s building the new span, told the Times that “I don’t think the U.S. fabrication industry could put a project like this together. Most U.S. companies don’t have these types of warehouses, equipment or the cash flow. The Chinese load the ships, and it’s their ships that deliver to our piers.”

Really? There’s no American company that can make bridge parts anymore? Who built the Golden Gate Bridge? Or the George Washington? Or the Verrazano? Are none of these companies and people left?

Well, certainly, there’s no American company that can pay someone 75 cents an hour.

We are apparently now dependent on China for steel parts, an industry the US once totally dominated. If you want to see how bad the situation is go to Bethlehem, Pennsylvania. There the once-huge Bethlehem Steel plant has been turned into an arts center.

One hopes that the Case-Shiller findings for April are the start of something grand, a better economy and more jobs. But the awful truth is that as long as workers can be paid 75 cents an hour to do the work that Americans once did our economy is in terrible trouble.

How Jobs at 75 Cents an Hour are Killing US Real Estate is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

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“Purchase applications fell last week, driven primarily by a sharp decrease in government purchase applications as new, higher FHA premiums went into effect,” said Michael Fratantoni, the Mortgage Bankers Association Vice President of Research and Economics. “This decrease reverses a 20 percent increase in government purchase applications over a four week period, which was likely driven by borrowers attempting to beat this deadline.”

The deadline borrowers were trying to beat was April 18th, the day FHA loan requirements changed with the addition of a .25 percent increase in the annual mortgage insurance premium (MIP). For most new borrowers the annual cost for FHA insurance will rise from .90 percent to .115 percent or around $30 a month.

For marginal borrowers trying to get the biggest possible loans or for people who simply don’t like to pay more than they should, the steeper premium increases costs by about $360 a year.

In March FHA applications were down almost 36 percent when compared with March 2010. Endorsements were off 25 percent. Normally such results would produce cries for new leadership, and in this case former FHA Commission David H. Stevens is moving on to become the President and CEO of the Mortgage Bankers Association. This hardly seems like a demotion.

So who wins with this new policy?

Yes, HUD will get additional dollars for its insurance program but so what. The program already yields huge “receipts for the Treasury,” what normal human beings would call a profit.

As Mr. Stevens has explained, the “FHA is projected to generate approximately $9.8 billion in receipts for the U.S. Treasury in FY 2011, a significant increase compared to the $565 million of receipts generated in FY 2009.”

Taxpayers, of course, pay for none of this. As Lawrence Yun, chief economist for the National Association of Realtors, explains, the “FHA and VA government-backed loan programs turned a modest profit over to the U.S. Treasury last year, and have never required a taxpayer bailout.”

And unlike in past years, excess FHA premiums now go to the government instead of being returned to borrowers, as was the practice until December 8, 2004 when the policy changed under the Bush Administration.

How The Public Loses

With less FHA financing available there will be artificially-reduced buyer demand, higher costs and fewer home sales. Is this really a good idea given the critical condition of the housing market?

Home sales — despite claims to the contrary — are down. As the National Association of Realtors explains, existing home sales in March were 6.33 percent below March 2010.

Prices are also off — they’re down 18.6 percent from the peak in April 2007 according to the government.

Given this environment, the obvious path is to stimulate home sales because more real estate transactions are inherently good for the economy. We did that with the tax credit for first-time home buyers and it was a program which boosted real estate sales.

Today, the equally-obvious path with the FHA is to simply keep the standards which made the program a success. That means a 3 percent or 3.5 percent down payment and not more than a 1 percent fee for lenders. This was the standard fee for FHA loans until — in an outright gift to lenders from the Obama Administration — the cap on lender fees for most FHA programs was eliminated on December 30, 2009, a date when media coverage would be at an absolute minimum.

The FHA has traditionally been a leading financing option for first-time buyers and those in the lower- and middle-income brackets. Now access to that choice is being made unnaturally less attractive so that borrowers will be increasingly forced to obtain private-sector financing. This artificial lack of choice — a choice not based on better products or lower costs from private lenders — is not good for the housing market or the country.

Less FHA Mortgage Loan Demand Undermines American Home Prices is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

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Killelea is a leading seer and prophet for a financial movement which thinks traditional real estate strategies are done and over. His website — the hugely-popular Patrick.net — is a national forum for the renting-is-better trend, a place where he and thousands of others make the case for new thinking and provide example after example of local rental opportunities.

In the past it would be easy to dismiss Killelea because rising home prices made real estate attractive. Figures from the New York Times show that in 1968 the typical house was valued at $22,600, a figure which rose to $219,000 by 2006. (See: Will the Fed Reverse the Housing Slump? September 19, 2007)

But the numbers from the Times also show something else: In 1968 it would take a typical buyer 2.9 times his or her annual income to buy a house. By 2006 the same house would cost 4.5 times annual income.

Killelea believes home prices have soared to a point where they no longer make financial sense, that real estate values are likely to decline further and that in most situations renting is now a better option than owning.

The Market Slumps

After decades of good news real estate trends started to change in 2007 when large numbers of distressed homes began to appear and force down home prices. RealtyTrac reports that there were 885,468 foreclosure filings in 2005, a figure which reached 2,203,295 in 2007 and has continued to climb.

The government says that home prices in November 2010 were down an average of 14.9 percent from the 2007 peak. Some regions, of course, have had even steeper declines — think of areas in California, Florida, Nevada, Arizona and Michigan.

The result, says Killelea, is that times have changed. New conditions require new thinking and in most cases that means ownership is out and renting is in.

“Prices did inflate for a long time as the US industrialized and the population growth rate was high,” says Killelea, “but lately the US is losing its industrial base to China, and US population growth has slowed. This makes it unwise to count on similar house price inflation in the future, especially in areas where prices are already far beyond the cost of renting an identical house.”

The Case For Renting

On his site, Killelea argues that “it’s usually still much cheaper to rent than to own the same size and quality house, in the same school district.

“On rich neighborhoods, annual rents are often 2.5 percent of purchase price while mortgage rates are 5 percent, so it costs twice as much to borrow the money as it does to borrow the house. Renters win and owners lose! Worse, total owner costs including taxes, maintenance, and insurance come to about 9% of purchase price, which is more than three times the cost of renting and wipes out any income tax benefit.”

In the past, the premium many buyers saw for ownership was justified by the idea that a home was not just shelter, it was also likely to be an investment that produced consistent gains in value. In many cases the value of real estate increased more than the rate of inflation, meaning that over time additional buying power — the real measure of wealth — was being created.

The catch is that now the justification for real estate ownership is missing in many markets. Prices are not rising before inflation or after. When home values will again begin to rise is unknown and unknowable.

When to Buy

Killelea is not an absolutist, someone who believes renting is always the better choice when compared with ownership. Instead, he makes two central arguments:

First, he says consumers should stick to basics and seek to avoid debt when possible.

“The traditional banker’s rule of thumb is that a house should not cost more than three times a household’s gross annual income. On a monthly basis, I think 30% of take-home page is reasonable,” he says.

Killelea’s view is actually more liberal than traditional lending standards. Conventional loans, for example, typically require that a borrower spend no more than 28 percent of his or her monthly income for mortgage principal, mortgage interest, property taxes and property insurance (PITI). This is the so-called “front” ratio that lender use to qualify borrowers. The “back” ratio includes the front ratio plus recurring costs such as monthly payments for auto loans, credit cards and student loans. The back ratio for conventional loans is 36 percent of monthly income.

Second, Killelea argues that even if the financing numbers are right, even if a borrower can spend less than 30 percent to own, there is still a need to look at whether it’s cheaper to own or to rent over the ownership period.

“Living in California did really force the whole rent vs buy issue into my head, because the prices were and still often are so absurd, like two to three times as much to own as to rent the same thing. Had I lived elsewhere, I probably would not have thought about it as much.”

A False Bottom

When asked if real estate values have generally reached a false bottom, if prices could go lower in many areas, Killelea says “yes, I do think we reached a false bottom again, and we have done so many times since 2006. I do believe house prices in most markets will fall in 2012, but that the percentage declines will be larger in more affluent areas. The bottom will be here when it is distinctly cheaper to own than to rent the same thing.”

“I think rates will go higher in spite of the increasingly desperate manipulations of the Federal Reserve,” he says. “But that doesn’t make it a good time to get a mortgage at all. The ideal time to buy is when interest rates are at a peak, which excludes competing buyers, and to buy then with all cash. Then you get few competing buyers, a low price, and no risk of defaulting.”

Yet even if buying conditions are not ideal, Killelea expects there will be no shortage of real estate purchasers.

“The basic psychological drive to own at any price will nonetheless cause millions of people to keep making bad financial decisions. But at least some people will do the math and see why they should wait until they find a really good deal.”

Real Estate Seer: Renting In, Mortgages & Foreclosures Out is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

Technorati Tags: Arizona, California, debt, deflation, Federal Reserve, Florida, foreclosure, Foreclosures, home, inflation, Killelea, Michigan, mortgage, Nevada, Patrick Killelea, prices, real estate, RealtyTrac, Rent, renting, value, wealth

That might be the case, according to a new analysis from Fiserv, Inc., an information management provider for the financial services industry. It says both that prices will stabilize — but that prices are likely to fall further.

After looking at data for more than 375 U.S. markets, Fiserv and Moody’s Analytics say home prices have already leveled out in one out of four metro areas. They also estimate that price stability will return to “75 percent of U.S. metro markets by the end of this year and 100 percent of markets by the end of 2012.”

“Large supplies of foreclosed properties will continue to be the biggest downside risk for home prices and metro area housing markets,” said David Stiff, chief economist, Fiserv. “Foreclosure activity declined at the end of 2010, but sales activity of bank-owned homes increased. In bubble and crash markets, the uncertain timing and volume of bank liquidated properties will cause home prices to bounce around their lows for many years.”

Stiff added that “since a significant number of households no longer have access to mortgage credit, improving affordability does not necessarily translate into sustained housing demand in every metro market.”

Lower Home Prices Predicted

Stablilization, however, may not mean higher prices.

The Fiserv Case-Shiller Indexes “forecast that average single-family home prices will fall another 5.5 percent over the next 12 months, with steep home price declines expected to continue in markets that have been hurt most by the housing crisis. These markets, including many in Florida, California, Nevada and Arizona, will begin seeing prices stabilizing throughout this year and through the end of 2012. Factors weighing on the housing market continue to include chronic high unemployment and the large number of distressed properties that remain in many of the bubble markets.”

Fiserve also explains that stabilization will not occur all at once or in all locations. Specifically, the company says:

• Markets where prices have already stabilized include San Diego, Washington, D.C., and San Francisco.
• Markets where prices will stabilize by the end of 2011 include Minneapolis, New York City and Portland, Ore.
• Markets where prices will not stabilize until 2012 include Miami, Phoenix and Las Vegas.

Representative home price data for major U.S. markets

Source: The Fiserv Case-Shiller Indexes. The Fiserv Case-Shiller home price forecasts are produced by Fiserv and Moody’s Analytics.

Will home prices stabilize in 2011? is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

Technorati Tags: areas, home, metro, prices, real estate, value

In a very-direct way gas prices have a lot to do with current mortgage rates, refinancing and mortgage quotes. And today’s mortgage rates have a lot to do with home prices and affordability.

Okay, how can this be?

When gas prices increase the effect is felt throughout the economy. Trucking companies need more dollars to pay energy bills and suddenly the price of food and just about everything else goes up. Higher prices begin to show up in super markets, hardware stores and shopping malls.

Lenders want to assure when they loan money that the interest rate produces a profit. But profit to lenders doesn’t just mean they want 5 percent instead of 4 percent, what they really want is a rate of interest which is higher than the rate of inflation.

Inflation

Let’s say that $100 will buy 50 loaves of bread. If the rate of inflation is 2 percent annually then next year it will take $102 to buy the same number of loaves. Notice that the number of loaves is the same, what’s changed is the buying power of cash.

The real measure of wealth is not currency, it’s buying power. Several years ago in Romania I had a dinner which cost 500,000 old leu. It was a very nice dinner involving several courses, part of a medium-rare bear, a four-piece band and a castle-like setting. In US money the actual cost of my meal was about $13.

So, when gas prices rise and other prices go up we have an increase in the cost of living — in other words, a dollar will buy less. Lenders will see this and want a better return for their capital, meaning higher interest rates. Higher interest rates, unfortunately, are never good for real estate because the pool of qualified buyers shrinks, there’s less demand for property and less demand means stalled or lower prices. Overall, the push toward economic recovery is stymied.

And that’s not all.

Suburban Sprawl

The Census Bureau says we now have almost 309 million people. It’s a big country but most people prefer to live in 150 or so major metro areas. These metro areas are not static, they are growing in many cases as suburbs push further and further out.

The price of gasoline is a real cost. Yes, you can get a bigger and better house by moving further from a metro center, but if your commute requires gas then houses more distant from downtown begin to be less attractive as energy price rise. Not only is the commute long, now the cost of commuting goes up.

The result is that houses in outer suburbs away from jobs see less demand and reduced pricing pressures while homes nearer to employment centers gain more value.

It typically happens that close-in properties to the west of metro centers have more value than other areas. Why? Because the wind and the weather largely blow from west to east, meaning historically if you live west of town you can avoid the smells of the refineries, stockyards and industrial areas by living up-wind.

The bottom line: Sustained higher gas prices will cause mortgage loan rates to rise, refinancing interest levels to increase, property values to generally wallow and prices for more-expensive close-in homes to rise or at least resist further erosion.

Will Rising Gas Prices Down Home Values? is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

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A report by the Treasury Department’s Inspector General for Tax Administration shows that nearly 1.8 million taxpayers filed claims under the government’s First-time Homebuyer Tax Credit Program for 2009. Many received an individual credit of as much as $8,000 and their group benefit amounted to almost $12.5 billion.

Unfortunately, 959,813 buyers who purchased in 2008 will have to repay their money because — as we have explained — the 2008 “tax credit” was actually a 15-year loan.

However, there are additional claims that were filed in 2009 and 2010, meaning that the total number of homeowners making repayments to Uncle Sam will likely exceed 1 million.

So what went wrong? How could so many people — and there will be more — wind up owing money?

Qualifications

To stimulate the homeownership market the government has offered several tax credits for “first-time” homebuyers during the past few years. In general, a first-time homebuyer for purposes of the programs is defined as someone who has not owned property for at least three years. In addition, there have been other qualifications as well.

• In 2008 under President Bush there was a first-time homebuyer “credit” of up to $7,500 for married couples and single taxpayers but no more than $3,750 for married individuals filing separately. This money, however, was actually a loan which had to be repaid over a 15-year period.
• In 2009, under President Obama the credit was raised to $8,000 and no repayment was required. The money is an outright grant. However, there are other standards which have to be met, such as owning the property for at least three years.
• In November 2009 the deadline for the first-time homebuyer credit was extended from December 1, 2009, to contracts made before April 30, 2010 but which closed no later than June 30th. (For those on active-duty military service the deadline is April 30, 2011.)
• In 2010 the June 30th closing deadline was pushed back to Sept. 30, 2010.

Repayment Required

There are a number of events that could set off a repayment demand by the IRS.

First, the borrower was not a “first time” purchaser as defined by the rules.

Second, the property of a 2008 buyer ceases to be the main home before the end of the 15-year recapture period.

Third, the home of a 2009 or 2010 buyer ceases to be the taxpayer

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