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Inside Washington (07/05/2010)
* WASHINGTON (7/6/10)--Eligible taxpayers who contracted to buy a home and qualified for the first-time homebuyer tax credit before April 30 now have until Sept. 30 to close the deal, according to the Internal Revenue Service. The Homebuyer Assistance and Improvement Act of 2010, signed by President Barack Obama last week, extends the closing deadline to Sept. 30 from June 30. Those who entered into a purchase contract before or on April 30 but closed after that date should attach to their tax return a copy of the pages from the signed contract showing all parties’ names and signatures if required by local law, the property address, the purchase price and the date of the contract ... * WASHINGTON (7/6/10)--Senate leaders wrote to their colleagues in the House last week to clarify the intent of a derivatives provision in the financial regulatory reform bill (American Banker July 2). The House Wednesday approved the bill and the Senate plans to take it up when they return from Independence Day recess. The letter states that the legislation is intended to continue to allow end-users to use derivatives to hedge risks. The letter addresses concerns raised by Sen. Saxby Chambliss (R-Ga), who said the legislation could be interpreted as stopping end-users from hedging risk ... * WASHINGTON (7/6/10)--Regulators are requiring banks to list how many unfunded commercial and industrial loans they have (American Banker July 2). The information aims to show which banks use capital to work with commercial borrowers, and it will give investors more information about those loan categories. Banks began making such disclosures in first-quarter filings with the Federal Deposit Insurance Corp. However, analysts said more disclosures are needed to determine lending trends. Though the data is not “perfect information,” the transparency provides a better indication of what is going on at the banks rather than guesswork, Frank Barkocy, director of research at Mendon Capital Advisors Corp., told the Banker ... * WASHINGTON (7/2/10)--The U.S. Department of Energy is trying to expand a program started in California and intended to make it easier and cheaper for homeowners to improve energy efficiencies through the mortgages on their homes. The Obama administration has tagged $150 million in stimulus money for the program, which can help homeowners do such things as retrofit their homes for solar energy, while paying for it over time through their property-tax bills. However, the government-sponsored enterprises (GSEs) Freddie Mac and Fannie Mae may throw a huge monkey wrench into the government’s plan (The New York Times July 1). Freddie and Fannie both warned that they may not purchase loans for homes that have used the energy financing. As explained in the Times article, this is how the program, called Property Assessed Clean Energy (PACE), works: A local government issues bonds or borrows money through other means, and uses it for home loans that cover the upfront costs of solar installations or other energy improvements. The homeowner has 20 years to repay the loans through a special assessment included in the property tax--which stays with the home even if the house is sold. So far the program has limped along. Although available in 22 states, only a few thousand people reportedly have used it since it started in 2008. That poor showing may not change any time soon--despite the Energy Department’s plan for a push--if Fannie and Freddie step away from such loans. The articles says the GSEs are concerned about the potential burden on taxpayers if a homeowner defaults on a such a mortgage because, in most cases, property taxes must be paid first from any proceeds on a foreclosure. The GSEs’ concerns have unsettled homeowners and PACE programs alike. Some alarmed state officials have, at least for now, frozen their programs ...


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