Makes Sense for Home Buyers to ACT Now!

1. Makes Sense for Home Buyers to ACT Now! The Housing and Economic Recovery Act of 2008… …and how it impacts YOUR clients and YOUR bottom line! Joe LO XYZ Mortgage Company Disclosure: All loans subject to credit approval and property appraisal. Programs, rates, and terms subject to change without notice. For ARM loans, rate may increase after settlement. Prequalification is not a commitment to lend, a condition of loan approval, or an application for credit. Pre-approvals will result in a loan decision subject to conditions. Consult a tax advisor regarding the deductibility of interest.-- a Division of National City Bank

2. Why this new law? • To help a sluggish housing market recover • To strengthen an also sluggish US economy • To provide additional benefits to current homeowners, and encourage home purchases • To help prevent more foreclosures, which weaken home prices nationwide • To prevent “bad actors” from participating in the professional business of home loan lending

3. Let’s Break it Down • FHA “Modernization” – several changes • New Tax Credits and Incentives • Conforming “Jumbo” loan changes • Hope for Homeowners in trouble • New Quality Standards for Mortgage Lenders

4. Seller Paid Down Payment Assistance • Going, going… not gone yet, but slated to be eliminated October 1, 2008 • Why? These loans have triple the chance of default and foreclosure over traditional FHA loans • Bills already in progress to resuscitate, but all guarantees are off • OPPORTUNITY: If prospective homebuyers want seller paid DPA – they must get it now!

5. More Cash Needed Ahead • For FHA financing, minimum cash investment is increasing from 3% to 3.5% • Mortgage Insurance costs will likely be increasing too • HUD in process of clarifying details and when this will take effect • OPPORTUNITY…Prospective home buyers must act now to get best benefits before changes take place!

6. Good News…Did Someone Say Tax Credits? • Calling All First Time Home Buyers • Or Any Non-Homeowner in the Past Three Years • Good for Buyers From April 9, 2008 Through July 1, 2009 • Tax Credit Up to $7,500 • 10% of Sales Price up to a Maximum of $7,500 • Must be Primary Residence • Income Limits $75K for Singles or $150K for Couples • Phases Out at $95K and $170K Respectively

7. The Fine Print • The Tax Credit is generous… but is actually an interest-free loan, must be paid back over 15 years at $500 per year • If home sold early, repayment of loan is limited to amount of appreciation • If homeowner dies… the good news is that the loan is forgiven. The bad news is… they are dead. • OPPORTUNITY: Better benefits than ever before for First Time Home Buyers to get “off the fence”, and into their first home… but limited time program, it’s time to act!

8. As an FYI…Tax Benefits for Current Homeowners • For whom? Those who own a home but currently file the EZ form, or do not itemize their tax deductions • Most homeowners itemize deductions – but this will help some individuals • May be able to deduct real estate property taxes, up to a maximum of $500 for a single person, $1000 for married • OPPORTUNITY: Mention this fact to past clients you’ve helped get into a home. If they are in the group of non-itemizing homeowners, they will thank you for the valuable information.

9. Who You Calling “JUMBO”? • In recent times, Fannie and Freddie have temporarily allowed more favorable interest rates on loan amounts normally considered to be “Jumbo” • This benefit was set to expire, but has been extended • However, the maximum limits have decreased • First Capped at $417,000 – No Change • Maximum Caps Pulled back to $625,500 – Few Markets Hit Here • Capped for Others at 115% of Local Area Median • OPPORTUNITY: Extended benefits for homebuyers in certain Jumbo markets to finance more affordably!

10. Hope for Homeowners • Who will this impact? Homeowners who are “upside-down” in their homes, ie: they owe more than the property is currently worth… and are headed for trouble • Very detailed eligibility guidelines • Must agree to split all future equity built up in the home with the government, 50/50 • Foreclosed homes drag down property values for everyone… so this is good news for all homeowners • OPPORTUNITY: If you know homeowners in serious trouble, make them aware of the program… you will likely win a raving fan client for life, and help to keep America’s neighborhoods stronger.

11. The Heat is On… Originators • Federal Licensing Requirements are Coming, and Will Improve the State of the Mortgage Industry Overall • No Crooks Allowed • Smarter Mortgage Professionals Ahead • Have to Be in Good Shape – Financially That Is • Working With a True Professional is Always Key • OPPORTUNITY: Partner with a true professional, who not only has experience, knowledge and ethics and will always make YOU look good to your referrals – but also has the tools that will help make a partnership truly successful.

12. Let’s get the word out together, that home buyers must ACT NOW! • Home prices are low – and most experts believe a bottom in real estate is here • Remember – you can’t see a “bottom”, until it is already in the rear view mirror • Home loan rates still exceptionally low • Benefits of this legislation will not last forever… why let clients miss this opportunity? • Get prospects pre-approved – buyers and sellers • Work that database • Nurture leads to deals • Work with a real professional

13. Let’s get the word out together, that home buyers must ACT NOW! Like you, I am a true professional, and I am devoted to making homeownership a reality that makes sense. I have the tools needed to operate successfully in today’s challenging climate, and to partner successfully with you. Let’s discuss how to advance our partnership, and work together to make our clients’ dreams of homeownership come true.