Because VA Home Loans are guaranteed by the Veterans Administration, they are easier to qualify for, require no down payment (yes 100% financing is still here), and most importantly don’t require perfect credit.

VA [...]]]> If you are a Veteran and looking into purchasing a home in Texas, then a VA loan is perfect for you.

Because VA Home Loans are guaranteed by the Veterans Administration, they are easier to qualify for, require no down payment (yes 100% financing is still here), and most importantly don’t require perfect credit.

VA Purchase Loans
I specialize in servicing first time home buyers utilize their VA benefits each and every day. A VA mortgage offers many advantages, as it is very popular with first time homeowners. Because a VA Loan is guaranteed by the Veterans Administration, you should expect lower interest rates and less down payment in relation to a conventional residential home loan.

VA Refinance Loans
The Veterans Administration offers Texas Veterans several different VA Home Loan Refinance Programs. I understand and appreciate those Veterans that have served our great nation, and am here to provide you with a variety of options in order to accomplish your VA refinance goals. If you are considering  refinancing of your current loan to lower your interest rate, or restructuring your payment and equity objectives, I can present you the most viable and beneficial options in the marketplace.

Exciting things are happening with VA home financing – VA is only 1 of only a few options left for true 100% financing and it’s important to stay up-to-date with changes in loan limit increases, and VA Mortgage news, so feel free to subscribe to my blog or follow me on Twitter at @RightMtgGuy.

At the moment, the Fed is 92% complete with their program, and when they back out of it, this is going to attract investors that are going to require more yield. Well [...]]]> The Fed Purchase Program is ending in March and the MBS (mortgage backed securities) market will be an open canvas to new investors.

At the moment, the Fed is 92% complete with their program, and when they back out of it, this is going to attract investors that are going to require more yield. Well more yield for them means higher rates for you (and me).

Be on the lookout here in the next month or so as things progress and wind down.

Recommend locking all and any transactions with these gains. The Treasury Auction is coming out later today, but I would not suggest risking your purchase/refinance on those results.

Mortgagee Letter 2009-39

TO:                             ALL APPROVED MORTGAGEES

ATTENTION:          Single Family Servicing Managers

SUBJECT:                Updated Claim Filing and Delinquency/Default Reporting Requirements

For FHA’s Making Home Affordable Modification Program (FHA-HAMP)

The purpose of this Mortgagee Letter is to provide updated claim filing and delinquency/default reporting [...]]]> October 9, 2009

Mortgagee Letter 2009-39

TO:                             ALL APPROVED MORTGAGEES

ATTENTION:          Single Family Servicing Managers

SUBJECT:                Updated Claim Filing and Delinquency/Default Reporting Requirements

For FHA’s Making Home Affordable Modification Program (FHA-HAMP)

The purpose of this Mortgagee Letter is to provide updated claim filing and delinquency/default reporting requirements for the FHA Home Affordable Modification Program (FHA-HAMP).  FHA – HAMP was announced in Mortgage Letter 2009-23, issued on July 30, 2009.

Implementation of FHA – HAMP required system enhancements to both the Department’s Claim System and its Single Family Default Monitoring System (SFDMS).  As with the standard FHA Loss Mitigation options, FHA will include FHA-HAMP Loss Mitigation options in its Tier Ranking evaluation of Loss Mitigation.

Single Family Default Monitoring System (SFDMS) Enhancements:

Both the FHA Connection and HUD’s EDI TS 264 application are now ready to accept two updated SFDMS status codes that mortgagees shall use to report HAMP related loss mitigation actions.  Status Codes 39 and 41 are now available for the industry to begin SFDMS reporting on FHA-HAMP related loss mitigation initiatives.  The specific reporting requirements are outlined in the following section.  FHA recognizes that some industry participants may require additional time to complete the required system changes.  Therefore, mortgagees may begin using the updated SFDMS status codes immediately, but mortgagees must begin reporting the updated status codes beginning with the January 2010 reporting cycle.  That report is due to HUD no later than February 5, 2010, which is the fifth business day of February 2010.

Updated Single Family Default Monitoring System (SFDMS) Instructions

Status Codes 39 and 41 are now available for the industry to begin reporting on FHA – HAMP related loss mitigation initiatives as follows.

• Code 39- FHA-HAMP Trial Modification Plan - Prior to the January 2010 reporting cycle, mortgagees that use the FHA Connection for SFDMS reporting or that have the system capability, will report mortgagors that have been approved for an FHA – HAMP trial payment plan as SFDMS  Status Code 39.  For a limited time, (only through the December 2009 reporting cycle), those mortgagees who are not using the FHA Connection and their systems are not yet ready to support the updated status codes may report the trial FHA-HAMP repayment plan as Status Code 12 – Repayment Plan.

No later than the January 2010 reporting cycle, all mortgagees must report mortgagors approved to begin the FHA-HAMP trial payment plan as SFDMS Status Code 39.

• Code 41 – FHA-HAMP Modification and Partial Claim Started – Prior to the January 2010 reporting cycle, mortgagees that use the FHA Connection for SFDMS reporting or that have the system capability, will report mortgagors that have successfully completed the FHA – HAMP trial payment plan and will begin the process to complete the FHA-HAMP Modification and Partial Claim as SFDMS Status Code 41.

Also prior to the January 2010 reporting cycle, those mortgagees who are not using the FHA Connection and their systems are not yet ready to submit the updated status codes will report the completion of the trial FHA-HAMP repayment plan and the beginning of both the FHA-HAMP modification and Partial Claim as Status Codes 10 and 28 (Partial Claim Started and Modification Started).

No later than the January 2010 reporting cycle, all mortgagees must report mortgagors that have successfully completed the FHA – HAMP trial payment plan and will begin the process to complete the FHA-HAMP Modification and Partial Claim as SFDMS Status Code 41.

Reinstatement of any of the above examples shall be reported as SFDMS Status Code 98- Reinstated.

Appendix 1 to this Mortgagee Letter is an update to Appendix 1 of Mortgagee Letter 06-15.  While there are no changes to Appendix 2 of Mortgagee Letter 06-15, it is reprinted for industry convenience.

Claim System Enhancements for FHA-HAMP:

HUD’s Claim System enhancements are also now available.  The drop-down menu on the FHA Connection screen for Loss Mitigation Claim Input will include additional claim type options named ‘FHA HAMP-Loan Modification’ and ‘FHA HAMP-Partial Claim.’  These new selections will identify Loan Modifications and Partial Claims being filed as part of the FHA-HAMP initiative apart from a standard Partial Claim and a standard Loan Modification.  Mortgagees shall select the appropriate claim type when filing for the FHA-HAMP incentives.  Appendix 3 revises and supersedes the Claim instructions included as Attachment B to Mortgagee Letter 2001-02, and adds specific instructions for filing both the FHA-HAMP-Partial Claim and the FHA-HAMP-Loan Modification.  This means that Mortgagees will actually need to file two separate claims, FHA-HAMP Partial Claim and FHA-HAMP-Loan Modification to receive the incentive payments that are provided by FHA upon successful completion of the HAMP loss mitigation initiative.

Loan modifications and partial claims being filed as part of the FHA-HAMP initiative must be submitted only through FHA Connection to ensure that they are processed as a FHA-HAMP related Loss Mitigation option.  Any FHA-HAMP related claim that is submitted using paper Form HUD-27011, Single-Family Application for Insurance Benefits cannot be correctly processed or paid.

Any questions regarding this Mortgagee Letter may be directed to HUD’s National Servicing Center (NSC) at 888-297-8685 or sfdatarequests@hud.gov.  Persons with hearing or speech impairments may reach this number via TDD/TTY by calling 1-877-TDD-2HUD (1-877-833-2483).

Sincerely,

David H. Stevens

Assistant Secretary for Housing-

Federal Housing Commissioner

Attachments:

Appendix 1 – Delinquency/Default Status Codes

Appendix 2 – Delinquency/Default Reason Codes

Appendix 3 – Claim Filing Assistance for Loss Mitigation Claims

Paperwork Reduction Act

The information collection requirements contained in this document have been approved by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) and assigned OMB control numbers 2502-0060, 2502 and 0429.. Additionally, the Department has submitted an expansion package to OMB for 2502-04249, where approval is pending.  In accordance with the Paperwork Reduction Act, HUD may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection displays a currently valid OMB Control Number.

Pundits love to make predictions as to when home prices will stabilize in U.S. housing markets. But even well-respected forecasters and analysts may disagree, and even if a forecast proves true nationally, your local market may behave in a wildly different way. This disconnect between [...]]]>

When will YOUR housing market recover?

The national housing market is more than large enough to encompass a wide variety of trends in different places and on different timelines. And that means, at the end of the day, you’ll need to rely on your own best judgment to make decisions for yourself and your family.

Local data may be more meaningful for homebuyers, sellers
So how can you figure out when home prices and sales hit bottom and begin to recover in your neighborhood? You may need to do your own research to find the answer. Dig up facts and figures about your own city or town and then combine that data with information about national trends to formulate your own conclusions.

Plenty of data are as close as your keyboard, though the process of sifting through it may take quite a lot of time and thoughtful analysis. If you’re tempted to skip out on what may seem like a burdensome homework assignment and instead rely on your own gut instincts, you might want to take a tip from Stuart Gabriel, director of UCLA’s Ziman Center for Real Estate in Los Angeles. He says, “some investors are very instinctual and this has worked out well for them, but most of us rely on the acquisition of information.”

Get your data straight from the original source
For starters, here’s an overview of some of the data and the organizations and agencies that collect and disseminate it:

Supply of for-sale homes a key indicator
If you don’t want to indulge in that much research, zero in on the most important statistic, which, Gabriel suggests, may be the supply, or “inventory,” of homes that are for sale in your local area.

“There is a whole litany (of factors that affect housing) — home sales, housing starts, building permits, house prices — and all of those are important indicators,” he says, “but the inventory numbers in particular are really important.”

The general rule is that more months of supply indicates a weaker housing market. Many months suggests plenty of homes are for sale or the pace of sales is slow. Those conditions are indicative of a market that favors buyers. Few months suggests a limited number of homes for sale or the pace of sales is fast. Those factors are indicative of a market that favors sellers.

Many local Realtor associations and multiple listing services, or MLS, collect and publish this type of information. Ideally, the data should be segmented by locale, type of home and price range, though that degree of specificity is rarely on offer.

Housing starts increase supply of for-sale homes

Two other important housing market indicators are residential building permits and new-home construction starts, according to Gabriel. Bernard Markstein, senior economist at the National Association of Home Builders, or NAHB, in Washington, D.C., agrees. These indicators are measured by local government building officials and the U.S. Census Bureau. A spike in permits or starts may indicate more optimism among homebuilders, but can also suggest a dramatic rise in the supply of for-sale homes in the near future.Housing starts generally are a better leading indicator than housing permits because “housing starts turn into homes for sale very quickly,” Gabriel says.

The NAHB’s Web site offers access to a wealth of forecasts and economic and housing data from the association and government agencies.

Markstein also cites local employment trends and unemployment rates as important indicators of local housing market conditions.

“Employment is important because ultimately people need a place to live, and if people are moving into an area because employment is expanding, that will be positive for homeowners,” he says.

Most local newspapers publish stories about large employers’ hiring and downsizing plans as well as unemployment figures. Employment data also can be obtained from the Bureau of Labor Statistics.

Homebuyers and sellers can also glean useful insights from reports and newsletters published by the Federal Reserve and its 12 district banks, Markstein suggests. Each of the banks puts out its own periodicals about local economic conditions, and these reports usually contain sections about the outlook for commercial and residential real estate. The Fed’s Beige Book and map of the district banks may help you locate these reports.

Quality of data is crucial to good analysis

Much like do-it-yourself remodeling, personal economic analysis is not without certain pitfalls.

It’s important to track inventory, starts, unemployment and other figures over time and compare them to historical highs, lows and averages to understand their importance, Gabriel suggests.

“Look at these numbers relative to the typical level that would exist in a period of economic growth to see whether the levels are aberrantly high or aberrantly low. Look over a long time frame and measure existing levels relative to, say, a long-run average to get a sense of where (the market) is in the cycle,” he says.

And remember: In housing markets, “a long time frame” usually means a number of years, not just a few months.

I wanted to repost it so please take a moment to read this, as its [...]]]> In a previous post of mine, I outlined a problem that FHA has been currently dealing with, and today, on the front page of Yahoo, I found an article from the New York Times that gives a nice little update.

I wanted to repost it so please take a moment to read this, as its VERY important.

—-

U.S. Mortgage Backer May Need Bailout
by David Streitfeld and Louise Story
Friday, October 9, 2009

A year after Fannie Mae and Freddie Mac teetered, industry executives and Washington policy makers are worrying that another government mortgage giant could be the next housing domino.

Problems at the Federal Housing Administration, which guarantees mortgages with low down payments, are becoming so acute that some experts warn the agency might need a federal bailout.

Running questions about the F.H.A.’s future — underscored by interviews with policy makers, analysts and home buyers — came to the fore on Thursday on Capitol Hill. In testimony before a House subcommittee, the F.H.A. commissioner, David H. Stevens, assured lawmakers that his agency would not need a bailout and that it was managing its risks.

But he acknowledged that some 20 percent of F.H.A. loans insured last year — and as many as 24 percent of those from 2007 — faced serious problems including foreclosure, offering a preview of a forthcoming audit of the agency’s finances.

“Let me simply state at the outset that based on current projections, absent any catastrophic home price decline, F.H.A. will not need to ask Congress and the American taxpayer for extraordinary assistance — we will not need a bailout,” Mr. Stevens said in his testimony.

But to its critics, the F.H.A. looks like another Fannie Mae. The hearings on Thursday came on the same day that the federal agency charged with overseeing Fannie Mae and Freddie Mac provided a somber assessment of those giants’ health. In the year since the government stepped in to rescue them, the companies have taken $96 billion from the Treasury, and may need more.

Since the bottom fell out of the mortgage market, the F.H.A. has assumed a crucial role in the nation’s housing market. Created in 1934 to help lower-income and first-time buyers purchase homes, the agency now insures roughly 5.4 million single-family home mortgages, with a combined value of $675 billion.

In addition, these loans are bundled into mortgage-backed securities and guaranteed through the Government National Mortgage Association, known as Ginnie Mae. That means the taxpayer is responsible for paying investors who own Ginnie Mae bonds when F.H.A.-backed mortgages hit trouble.

“It appears destined for a taxpayer bailout in the next 24 to 36 months,” Edward Pinto, a former Fannie Mae executive, said in testimony prepared for the hearing. Mr. Pinto, who was the chief credit officer from 1987 to 1989 for Fannie Mae, went further than most housing analysts and predicted that F.H.A. losses would more than wipe out the agency’s $30 billion of cash reserves.

The issue has polarized Congress. Republicans, who led efforts to rein in Fannie Mae and Freddie Mac before those companies ran into trouble, are now seeking to bridle the F.H.A. Many Democrats insist the F.H.A. is playing a vital role in the housing market, which is only just starting to stabilize.

“F.H.A. has stepped into the void left by the private market,” Representative Maxine Waters, Democrat from California, said at the hearing. “Let’s be clear; without F.H.A., there would be no mortgage market right now.”

That was the case for Bernadine Shimon. Like many Americans, Ms. Shimon has recently been through some rough times. She lost a house to foreclosure, declared bankruptcy, got divorced and is now a single mother, teaching high school English in a Denver suburb.

She wanted a house but no lender would touch her. The Federal Housing Administration was more obliging. With the F.H.A. insuring her mortgage, Ms. Shimon was able to buy a $134,000 fixer-upper in August.

“The government gave me another chance,” she said.

The government is giving as many people as it possibly can the chance to buy a house or, if they are in financial difficulty, refinance it. The F.H.A. is insuring about 6,000 loans a day, four times the amount in 2006. Its portfolio is growing so fast that even F.H.A. backers express amazement.

For decades it was an article of faith that helping people of limited means like Ms. Shimon get a house was good for the new owner, good for the neighborhood and good for American capitalism. Then came the housing bust, which demonstrated that when lenders allowed people to buy houses they ultimately could not afford, it hurt the parties — while putting the economy itself in a tailspin.

In the aftermath of the crash, there is wide divergence on how easy, or how hard, it should be to become a homeowner. Skittish lenders are asking for 20 percent down, which few prospective borrowers have to spare. As a result, private lending has dwindled.

The government has stepped into the breach, facilitating loans with down payments as low as 3.5 percent and offering other incentives to stabilize the market. Real estate agents in some hard-hit areas say every single one of their clients is using the F.H.A.

“They’re counting their pennies, scraping up that 3.5 percent,” Bonni Malone of Prudential Americana in Las Vegas said. “Mostly they’re buying foreclosed homes from banks, although I had one client who bought from a guy that was dying. It’s turning around the market.”

While the government’s actions have helped avert full-scale economic disaster, there is growing concern that it might have doled out its favors with too generous a hand.

Many of the loans the F.H.A. insured in 2007 and last year are now turning delinquent, agency officials acknowledge. The loans made in those two years are performing “far worse” than newer loans, dragging down the whole portfolio, Mr. Stevens of the F.H.A. said in an interview.

The number of F.H.A. mortgage holders in default is 410,916, up 76 percent from a year ago, when 232,864 were in default, according to agency data.

Despite the agency’s attempt to outrun its fate by insuring ever-larger amounts of new loans to such borrowers as Ms. Shimon — the current rate is over a billion dollars a day — 7.77 percent of the portfolio is in default, up from 5.6 percent a year ago.

Barney Frank, the Massachusetts Democrat who is chairman of the House Financial Services Committee, said in an interview that the defaults were, in essence, worth it.

“I don’t think it’s a bad thing that the bad loans occurred,” he said. “It was an effort to keep prices from falling too fast. That’s a policy.”

The troubled loans are nevertheless weighing on the agency’s capital reserve fund, which has fallen to below its Congressionally mandated minimum of 2 percent, from over 6 percent two years ago.

The optimism expressed by Mr. Stevens, the F.H.A. commissioner, places him at odds not only with some outside experts but with Kenneth Donohue, the inspector general of the Housing and Urban Development Department, who is also F.H.A.’s watchdog. Mr. Donohue said the drop in reserves was “a flashing red light” that the agency was not taking seriously enough.

“It might be we’ll get ourselves out of this and that everything will be fine, but I don’t paint that rosy a picture,” Mr. Donohue said. “They’re banking on the fact that the economy will continue to improve, that the housing market will begin to sustain itself.”

He noted that if private lenders had raised their down payment requirements in the last two years, it raised the question, “what does the F.H.A. think it is doing by asking only 3.5 percent?”

Any more than that and Ms. Shimon, 45, would still be a renter. As it was, she cashed in her retirement savings account to come up with the necessary funds. She did not have enough to spare for closing costs, so her mortgage broker arranged a deal where the charges were wrapped into the loan at the cost of a higher interest rate. She cried when the deal was done.

The house was empty and trashed. Slowly, she is trying to bring it back to life. She spent the first few weeks picking up garbage in the backyard.

Is Ms. Shimon a good bet? Even she has no easy answer. Her mortgage payment, $1,100, is half of what she takes home every month. It is not easy to make ends meet. Teachers can get laid off like everyone else.

“The government,” she said, “is doing what it needed to do — taking a risk on people.”

Chaz Fullenkamp, an automotive technician in Columbus, Ohio, got an F.H.A. loan even though he was living on the financial edge. “If I got unemployed, I’d be wiped out in a month or two,” he says. Thanks to the F.H.A., however, he is better off than he used to be.

Mr. Fullenkamp used F.H.A. insurance to buy a house this spring for $179,000. The eager seller paid the closing costs and also gave Mr. Fullenkamp $2,500 in cash. He immediately applied for the $8,000 tax rebate. Even taking his down payment into account, he came out ahead.

“I knew in my heart I could not really afford the house, but they gave it to me anyway,” said Mr. Fullenkamp, 22. “I thought, ‘Wow, I’m surprised I pulled that off.’ ”

As the number of loans has soared, random quality control checks have decreased sharply, F.H.A. staff members say. Mr. Donohue, the inspector general, cited numerous examples of organized fraud in testimony to Congress earlier this year.

“They need to stop taking bad loans in the door,” he said in an interview. “They’re taking on all this volume, they have to have very active underwriting standards.”

Jack Healy contributed reporting from New York.

Acceptable situations are:

1.) Instances of divorce, after which the vacating spouse will buy a new home, or 2.) One of the co-borrowers  will vacate the existing property

-

Basically what’s going on right now is that there are justifiable rumors that the FHA’s reserves (capital) are hovering around dangerous levels.

Congress requires that the [...]]]> Just this morning, I was reading an article that I came across regarding a couple things that are going on with the Federal Housing Administration (FHA)….and it wasn’t pretty.

Basically what’s going on right now is that there are justifiable rumors that the FHA’s reserves (capital) are hovering around dangerous levels.

Congress requires that the magic number FHA needs to be at is 2%. At the moment, its speculated to be down to about 3% (down from 6.5%  in 2007) and if it falls below that mark, Uncle Sam has to come in and save the day once again. (Is it just me, or is this a never-ending cycle? Has anyone seen AIG’s stock quote recently?)

At the moment, FHA’s defaults (90 days+) are nearing 8% and depleting a good portion of FHA’s reserves. While that number may not seem that HUGE, you have to see how all this links together.

Several high-cost areas in the US got hit pretty hard the past couple of years. What goes up, must come down, right?

Well because of those declining markets, FHA decided to increase their loan limits and availability to accommodate the supply/demand in those areas. Who has $140,000 stashed under their mattress in CA to buy that $700,000 home? Not too many people. Well, who has around $25,000? Get the point?

And while this WAS needed to help stimulate buyers, you have to think of what happens on the flip-side. When that $5,000 (est) payment can’t be made anymore, and its time to jump ship, and who gets stuck with the bill? FHA.

FHA then has to tap into their reserves to make good on this.

Think about this for a moment:

In Texas, about 4-5 homes have to foreclose to match that ONE home in California. The odds of 4-5 consumers simultaneously defaulting is not that likely, unless they’re Madoff’s advisors.

The point I’m trying to make is that the high-cost areas are affecting FHA a little bit more than other more stable areas. While I am not saying that FHA lending shouldn’t be available here, I think it would be a good idea (especially now) to implement some more stringent measures before approving every Tom, Dick, and Harry that apply. Last thing we ALL want is to wave bye bye to FHA.

The remainder of the year will be quite interesting. An important incentive is coming to an end ($8k Tax Credit), and as for interest rates, well, let’s just hope they keep steady. Too many good things coming to an end is not a good thing.

Tommy’s 2 Cents

I would safely venture to say that FHA credit score requirements will be going up here in the upcoming months, as well as a larger down payments later down the line. While FHA loans have been the hot product, I wouldn’t be surprised to see Conventional loans start to SLOWLY creep back in and create a “2nd hand FHA loan” if capital continues to diminish as it has.

Remember what happened with Sub-Prime loans? High Demand, High Supply, POOF- they’re gone! History always repeats itself, let’s just hope we’ve learned our lesson the first time, and we don’t screw up FHA, especially for Dawson’s sake.

The IRS has an urgent message for would-be home purchasers: Make the most of the $8,000 first-time-buyer tax credit before it disappears Dec. 1 — if you qualify.

But if you don’t truly qualify, don’t try to play games with the credit. The IRS already has 24 criminal investigations of suspected [...]]]> By Kenneth R. Harney

The IRS has an urgent message for would-be home purchasers: Make the most of the $8,000 first-time-buyer tax credit before it disappears Dec. 1 — if you qualify.

But if you don’t truly qualify, don’t try to play games with the credit. The IRS already has 24 criminal investigations of suspected fraud underway around the country. It has executed seven search warrants, and last month a tax preparer in Florida entered a guilty plea on federal charges of fraud in connection with the first-time-buyer credit. He’s awaiting sentencing and faces up to three years in prison, a $250,000 fine or both.

Congress’s two versions of the first-time-buyer credit — a repayable $7,500 credit in 2008, and this year’s more generous $8,000 credit that does not have to be repaid — have stimulated home sales nationwide. But they’ve also become irresistible temptations for dishonest taxpayers to cash in and claim bogus refunds.

Claiming the credit looks so easy: You just fill out IRS form 5405, list the address of the house you bought, mail it in and wait a month or two for your money. Who’s going to check on whether you really qualify under the definition of first-time buyer — someone who hasn’t owned a principal residence in the previous three years — and that you’re eligible on income and other factors?

With thousands of people buying houses and claiming tax credits, who’s going to be able to check all those filings? The answer from the IRS: We are. The agency said it uses “sophisticated computer screening tools to quickly identify returns that may contain fraudulent claims for the first-time homebuyer credit.”

The IRS won’t discuss the nature of its screening, but it’s clear from the number of ongoing investigations that claims for the credit are getting special scrutiny.

According to a summary of the facts agreed to by Price as part of his plea agreement, he admitted that in February he met with a client who told Price that she didn’t want to buy a house. But Price insisted that she qualified for the credit because “she had two jobs.” He then wrote in a house address on the form 5405, claiming the client closed on the purchase Jan. 5. When she received her $7,500 credit, Price took $1,000 of it for himself.

In the plea agreement, Price admitted following a similar pattern in 14 other tax returns.

IRS spokesman Terry Lemons declined to discuss the ongoing criminal investigations of taxpayers claiming the home-buyer credit. He said the investigations involve individuals as well as tax-return preparers.

The IRS doesn’t “want to discourage people from taking advantage of the credit,” Lemons said, but it wants them to be certain that they’ve read through the eligibility rules so they don’t end up with audits, back taxes and late penalties. On the list of things that can disqualify buyers:

– Purchasing your house from a “related person.” That’s a broad category of people and entities, ranging from immediate family members — a spouse, parents, children, grandparents, grandchildren — to a corporation or partnership in which you have more than a 50 percent ownership stake.

– Buying a home with a spouse who is ineligible, even if you are eligible individually.

– Acquiring a house through an inheritance or gift.

– Financing the house through a tax-exempt mortgage bond program.

– Making too much money — in excess of $95,000 of modified adjusted gross income for singles, $170,000 or more for married joint filers.

What are the downsides if you claim the credit erroneously and do not intentionally defraud the government? If you are audited, the IRS most likely will ask for the full credit amount back, plus interest and a late-payment penalty.

Bottom line: Don’t let this year’s tax credit pass you by if you meet the criteria. And if you don’t, beware of slick-talking professional tax preparers who tell you that you do.

Sonny: Get this over with, Mush.

Mush: Come on, dice. Baby needs a new pair of shoes. Come on, seven!

Mush: Come on! Come on, dice!

Sonny: I don’t even have to look.

(Spectator) And seven!

Mush: Craps! I’m out!