News for Prescott AZ -

Wednesday, October 08, 2008


WASHINGTON (October 8, 2008) – Pending home sales activity surged as buyers took advantage of low home prices and affordable interest rates, according to the National Association of RealtorsÒ.

The Pending Home Sales Index,1 a forward-looking indicator based on contracts signed in August, jumped 7.4 percent to 93.4 from an upwardly revised reading of 87.0 in July, and is 8.8 percent higher than August 2007 when it stood at 85.8.  The index is at the highest level since June 2007 when it stood at 101.4.

Lawrence Yun, NAR chief economist, said home buyers were responding to improved affordability.  “What we’re seeing is the momentum of people taking advantage of low home prices, with pending home sales up strongly in California, Nevada, Arizona, Florida, Rhode Island and the Washington, D.C., region,” he said. 2  “The improvement also reflects the drop in mortgage interest rates after the government takeover of Freddie Mac and Fannie Mae.  It’s unclear how much contract activity may be impacted by the credit disruptions on Wall Street, but we’re hopeful most of the increase will translate into closed existing-home sales.”

The PHSI in the West surged 18.4 percent to 109.5 in August and remains 37.8 percent above a year ago.  In the Northeast the index jumped 8.4 percent to 79.8 and is 2.0 percent higher than August 2007.  The index in the Midwest rose 3.6 percent to 84.5 in August and is 6.6 percent above a year ago.  In the South, the index increased 2.3 percent to 96.0 but is 2.1 percent below August 2007.

Yun notes the unusual timing of contract activity in August.  “Home buyers in July were hampered by overly stringent lending criteria in the months before the government takeover of Fannie and Freddie,” he said.  “August shows some unleashing of pent-up demand before the credit crisis accelerated in September.”

He cautioned that the sampling size for pending home sales is smaller than the track on existing-home sales, so there is more volatility in the forward-looking series.  “We need to see just how much of this gain holds up,” Yun said.

NAR President Richard F. Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said despite all the turmoil in world financial markets, home mortgages are available. “Mortgages have been harder to find, and availability and terms vary depending on credit score and location, but RealtorsÒ can help buyers find reputable lenders while helping them navigate the transaction process,” he said. “The recently enacted economic stimulus package should help housing by gradually freeing the flow of credit.”

                                                                               -more-                                                                                #125

October PHSI/Forecast – add 1


Yun now expects growth in the U.S. gross domestic product (GDP) to contract for two consecutive quarters, in the fourth quarter of this year and the first quarter of 2009, before expanding in latter part of 2009 as the housing market begins a steady improvement. 

Looking at middle-ground assumptions, existing-home sales are forecast at 5.04 million this year and 5.41 million in 2009.  Following national declines of 5 to 8 percent in 2008, home prices are projected to increase 2 to 3 percent next year.

New-home sales should total around 503,000 this year and 471,000 in 2009Housing starts, including multifamily units, are likely to fall 28.2 percent to 973,000 units this year, and come in around 843,000 in 2009 as builders continue to clear the accumulation in inventory.

 The 30-year fixed-rate mortgage will probably average 6.1 percent in the fourth quarter and rise gradually to 6.6 percent by the end of 2009.  NAR’s housing affordability index is expected to average 18 percentage points higher this year than in 2007.

The unemployment rate is projected to average 6.4 percent in the fourth quarter and then average 6.6 percent in 2009.  Inflation, as measured by the Consumer Price Index, is estimated at 4.0 percent for 2008 and 2.0 percent next year.  Inflation-adjusted disposable personal income is forecast to grow 1.7 percent this year and 1.0 percent in 2009.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

# # #

1The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.

The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales.  In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity from 2001 through 2004 parallels the level of closed existing-home sales in the following two months.  There is a closer relationship between annual index changes (from the same month a year earlier) and year-ago changes in sales performance than with month-to-month comparisons.

An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined as well as the first of five consecutive record years for existing-home sales.


2Market information is from unpublished snapshot data; please contact your local association of Realtors® for more information.


Existing-home sales for September will be released October 24; the next Pending Home Sales Index / Forecast will be released at 11:30 a.m. EST on November 7 at NAR’s annual convention in Orlando, Fla.


Information about NAR is available at This and other news releases are posted in the News Media section.  Statistical data, tables and surveys also may be found by clicking on Research.


Tuesday, July 29, 2008

The Fannie-Freddie Bailout and the Silver Lining

With all of the recent dramatic headlines in our industry I want to
offer you my insight and professional opinion about what is going on.

The mortgage industry is in, well, a shambles. But, there is a nice
silver lining forming out there. The good news is Fannie and Freddie
will likely survive. In today's economy they really are "too big to
fail" as the saying goes. If they went under almost all home lending
would come to a screeching halt, the dollar would lose most of its value
and governments the world over would see massive devaluation of their
assets as most of the US dollars they've earned in trade with the US
have been used to buy mortgage bonds and US treasuries. Basically, it
would trigger a world-wide depression.

Do you see the silver lining yet? :)

Let's take a closer look. With the Government extending an unlimited
credit line to both institutions it is restoring investor confidence and
dramatically diminishing the likelihood they will ever need to use that
same credit line. However, I think we will see a very different Fannie
and Freddie in the future. Using tax dollars to bail out private
enterprise is generally not a good thing. If no changes are made a
bailout encourages more risky behavior in the future. After the current
crisis is over you can expect either a complete Government takeover of
the companies (Fannie Mae started as a Government agency in 1938 during
the Great Depression so that would be a return to its roots) or they
will fully privatize both companies and break them up into smaller
pieces. I think the last option is most likely and the best for
taxpayers and Wall St investors. In the mean time we can still do

Today's loan standards are really very similar to lending in the early
90's but with better rates. As with everything in history it's all
relative to your point of reference. What makes a good borrower today
has very little in common with what made a good borrower 6 months ago.
That's the problem most Loan Originators are having right now, they are
taking a borrower that would have looked good on paper 6 months ago and
trying to fit him into today's standards and having a rough time getting
it done. We have to be willing to look at each borrower with fresh eyes
and be very clear about what we can and can't do with today's standards.
We can still get a lot done, but it's all in how we present the package.
Most Loan Originators are too filled with fear to think about doing
things a new (or very old) way.

I believe we are going to look back on the last two weeks and view them
as a bit of a turning point in the industry. Not only did we have the
Government explicitly back up Fannie & Freddie, we also had the Fed
release new lending regulations for the industry. No need to go into
details, but on the whole they did a good job. The new regulations will
make it easier for lenders who give quality advice to thrive and make it
much harder for mass-marketing bait and switch methods to be effective.
They will hold lenders more accountable as well as allow free market
enterprise and innovation. Everyone in the industry has been waiting to
see what the Fed put in place before moving forward. Now that we know
the new rules to the game the capitalistic creative juices will start to
flow again. We may see some new and improved loan products show up in as
soon as 6-12 months.

So yes, we are currently on the front lines of the worst financial and
economic crisis since the Great Depression. But that does not mean this
will BE another Great Depression. The whole world is tied into our
mortgage market and has a vested interest in seeing us survive to buy
another day. In the mean time we have the buyer's market of a lifetime,
especially for first time or returning homebuyers with a good job but
little savings. When in history have we had drastically slashed home
prices, desperate sellers willing to pay huge concessions, and mortgage
rates below 7%?

I encourage you to take a step back and look at this market with a new
prospective. It won't last forever, but it's still going to take
another 12-24 months to clean up the mess. In the mean time there is
business to be done. It just looks a lot different than business in the
recent past.


Theron Wall, Sr. Mortgage Consultant
Certified Mortgage Planning Specialist

Wallick & Volk Mortgage Lending
3615 Crossings Dr, Ste A
Prescott, AZ 86305
Cell (928) 533-7473
Office (928) 778-7167
Fax (928) 445-5308

Friday, July 25, 2008

13 Simple Ways to Lower Your Electric Bill
By Kelli B. Grant


FORGOING THE FAMILY road trip will spare you from getting dinged by sky-high gas prices this summer, but staying at home in the air-conditioned comfort of your living room may not result in the cost savings you expected.

That's because the same commodity cravings that are driving up oil prices have also jacked up the costs of coal and natural gas — prime fuels needed to generate electricity. Increased demand from China and India, coupled with weather-driven supply setbacks, have nearly doubled market prices for both coal and natural gas this year. The two, along with oil, have become a triple-threat for the electric industry. Where electricity producers once may have switched from one fuel to another to cut costs, now every option is pricey.

As a result, electricity prices are expected to increase 2.7% this year, according to the Energy Information Administration's Short-Term Energy and Summer Fuels Outlook. Those estimates, however, could easily prove to be conservative. Regions that rely on coal, natural gas or petroleum to generate electricity — by EIA estimates, about 70% of power plants in the United States — could see more substantial price increases, says Steve Rosenstock, manager of energy solutions for the Edison Electric Institute, an industry group.

"The other big unknown is the weather," adds Neil Gamson, an economist with the agency. EIA's estimates are based on the National Oceanic and Atmospheric Administration's expectations that it will be a mild summer, with fewer scorching days than last year. But an unexpected heat wave — and a subsequent spike in demand for electricity — could quickly incite price increases. So could worse-than-expected summer hurricanes, by putting a temporary halt to natural gas production.

Heat wave or no, here are some simple strategies to keep your summer energy bills from overheating.

Fine-Tune Your Equipment

Arrange an HVAC inspection. Hire a certified technician to check that your heating, ventilation and air-conditioning system is operating at peak efficiency. A worn-out filter or unsealed duct could reduce the unit's energy efficiency by as much as 20%. Make an appointment before the hot weather hits, urges Ronnie Kweller, a spokeswoman for the Alliance to Save Energy. An inspection will usually set you back $50 to $100, but that could easily be offset by the energy savings you'll reap over time. Plus, if you schedule your appointment before contractors are swamped with repair requests, you could possibly snag a 10% early bird discount.

Shop for size. If you're in the market for a new room air conditioner, use Energy Star1 guidelines to assess how powerful a unit you need. A too-powerful unit will cost more in both initial purchase price and ongoing energy bills, says Kweller.

Keep it clean. Whether you have central air or an individual window or wall unit, be sure to clean the air filters every month. Dirt and dust hinder air flow, reducing efficiency.

Program your thermostat. Programming your thermostat to give your air conditioner a break for the eight hours you're at work — even by just a degree or two — could cut your cooling bill by up to 10%, says Jennifer Thorne Amann, a senior associate at the American Council for an Energy-Efficient Economy.

Seek out incentives on appliances. Energy Star-certified products are not only guaranteed to be more efficient than their conventional counterparts, but they can also cost less. Many utility companies and local governments offer rebates on such purchases. Austin Energy in Texas, for example, offers $50 back on window air conditioners with an energy-efficiency ratio of at least 10.7. That's a 22% discount on a $230 Kenmore 7,800 BTU single room air conditioner.

Hunt Down Heat Sources

Seal up your home. Pricey cooled air can leak through cracks along window and door frames. Invest in some caulk and weather-stripping to plug up these drafts as you notice them. You could spend as little as $10 on the project, which would more than pay for itself over the course of the summer, says Kweller.

Change your light bulbs. If you haven't swapped your incandescent bulbs for compact fluorescents yet, get to it, says Amann. Not only do CFLs use 75% less energy than conventional bulbs, but they also generate 70% less heat.

Close your blinds. It's a simple concept: Rooms get hotter without shades or curtains to block the sunlight.

Use fans. A breeze makes the room feel a few degrees cooler. Just be sure to turn it off when you leave. "Fans cool people, not rooms," says Kweller.

Unplug. Gadgets like your cellphone charger and microwave suck energy — and generate heat — as long as they're attached to a power source, says Amann. Plug them into a power strip that can be turned off when not in use.

Assess Utility Suppliers

Check alternate suppliers. If you live in a state where the electric industry is deregulated, shop around for a different energy provider, says Rosenstock. Savings can be as substantial as 20% a month, and many of these companies use renewable energy so they are much less dependent on the whims of oil, coal and natural gas prices. Most will also fix billing rates for a year or more — a definite bonus as energy prices creep up. Visit your state's Public Service Commission to determine your options. Just be aware that most providers require you to commit to at least a year and charge a hefty fee if you duck out early, advises Rosenstock.

Consider time-of-use plans. A growing number of electric companies are offering so-called time-of-use plans, which offer lower rates for energy consumption during off-peak hours (usually from midevening to early morning). The catch? You'll often pay more for peak-hours use, so consider your schedule before signing up. Arizona-based SRP, for example, regularly charges 9.65 cents per kilowatt hour. On the time-of-use plan, it charges 18.13 cents for on-peak hours (1 p.m. to 8 p.m.) and 5.18 cents during the rest of the day.

Fix your bill. Ask your utility about fixed-bill plans, which charge the same amount every month for a set period, regardless of your electricity use. You'll pay a premium rate per kilowatt hour to hedge against price increases and seasonal spikes, so make sure to crunch the numbers against your total 2007 energy bills to see if you'll really save, advises Kweller. Also, keep in mind that these plans periodically reconcile, which can leave you with a big bill if you've used more than the supplier anticipated.

Links in this article:



Thursday, July 24, 2008

House and Senate reach agreement on Housing Bill

Tonight the House and Senate reached agreement on a massive housing bill that affects FHA, Fannie and Freddie, tax policy and many changes involving the housing market. We have previously briefed you by conference call and email on the progress of several separate measures, but the housing and mortgage crisis has caused Congress to combine these provisions into a bill exceeding 400 pages. The House will vote on the measure tomorrow, with the Senate to follow by next week. The White House has supported much of the measure but has criticized some components. Despite a prior veto threat, we expect the President will sign this bill, with final action before the August congressional recess.


Here are the major components:


1. FHA Changes


Mortgage limits for high cost areas will be increased to $625,000 on a permanent basis (115% of the current conforming limit).


The FHA floor will go from 48% to 65% of the current conforming limit. This will put the new permanent floor at $271,000.


Cash downpayment is set at 3.5%.


The seller funded down payment assistance program (DPA) will be terminated on September 30.


The risk based premium established by HUD last week will be suspended on September 30. The ceiling on upfront premiums will go to 3%.


2. Fannie and Freddie


The conforming loan limit will be increased to 115% of area median up to $625,000.

The bill provides for a federal "backstop" for Fannie and Freddie which allows the Treasury to capitalize the companies by taking an equity stake.


A new regulator with enhanced powers is created.


The bill creates an affordable housing trust fund paid for by assessments on Fannie and Freddie to help prevent foreclosures and facilitate affordable housing


3. FHA Rescue Fund


The bill creates a special FHA refinance program designed to allow the refinance into fixed rate FHA products of up to $300 billion in distressed mortgages.


4. Licensing


Encourages a nation wide licensing and registry system for loan originators by setting minimum qualifications and assigning responsibility to HUD for establishing new rules for those states that do not enact licensing laws.


5. Redevelopment of Foreclosed Properties


Provides $4 billion in funds for local governments to purchase and redevelop foreclosed properties.


6. Tax Incentives


Establishes a range of housing incentives, including a first time homebuyer tax credit and expands the Low Income Housing Tax Credit.

There is a great deal of detail in this complex bill and we will update you as more information is available.


Monday, July 14, 2008

What is happening with Arizona State Legislation



State Legislative Calendar: The two-year session starts the second Monday in January and normally lasts until close to the end of April of the following year. The Legislative rules provide that the Legislature adjourn no later than Saturday of the week in which the 100th day of the session falls. However, the Speaker of the House and the President of the Senate may extend the session for an extra seven days.

The Second Regular Session of the 48th Legislature convened on January 14, 2008 and is expected to adjourn on  June 22, 2008. 

State Level Activity:

The following bills pertaining to land use and growth management are being considered by the legislature.

HB 2141 - Home Sales Water Adequacy Disclosure: This bill would require real estate brokers or sales persons to provide a notice of the water supply status when advertising, promoting or selling a residential real property.  The notice must indicate whether the water supply is: assured,  adequate water supply, inadequate or unknown.  Status: Passed House 3/26/08; second read in Senate and referred to committees 3/31/08; no further action. 

History:  Currently, according to the Water Adequacy Program as established in A.R.S. §45-108, subdivision developers are required to obtain a determination from the state regarding the availability and quality of water supplies before marketing lots.  This law applies to new subdivisions located outside of Active Management Areas (AMAs).  Subdivision developers may obtain a determination by applying to the Arizona Department of Water Resources (ADWR) for a water adequacy report.  If the water supply is of adequate quality and satisfies the proposed demands for at least 100 years, the water supply is deemed “adequate.”  Groundwater must meet depth limitations currently set at 1,200 feet after 100 years in communities serviced by a water company and 400 feet in dry lot subdivisions.  If the water supply fails to meet these standards, it is deemed “inadequate” and must be noted on all promotional material.  Properties that are located within an AMA must adhere to a stricter Assured Water Supply Program.  As contained in §45-576, assured water supply entails a sufficient water supply of adequate quality that will be continuously available to satisfy the demands of the proposed use for a minimum of 100 years.  Groundwater use must be consistent with the management plan of the AMA to be considered “assured.”  Furthermore, assured water means that there is a demonstrated financial capability to construct the necessary infrastructure to supply water for the proposed uses including a delivery system and any storage facilities or treatment works. Currently, real estate brokers are not required to disclose the water supply status for residential properties, a requirement established by HB 2141. (Source: Arizona Legislature House Summary). 

AAR is opposed to HB 2141 as Arizona did not have an adequacy or an assured water supply requirement for anything developed prior to 1973 and 1980 (Urban Area Water Management Requirements) respectively. State laws were not set up for a real estate licensee to disclose water adequacy or an assured water supply for sales that occur decades after the initial sale of the home or property.  (Source: Tom Farley, AAR Government Affairs Director)

HB 2155 - Transfer of Development Rights: This bill would allow counties to transfer development rights from unincorporated areas of a county to a municipality through an Intergovernmental Agreement (IGA). It allows: municipalities to enter into an IGA with another municipality or a county for the transfer of development rights between jurisdictions; the BOS to authorize the transfer of development rights from unincorporated areas of a county to a municipality pursuant to an IGA;  removes the December 31, 2009 repeal date of sections of statute related to county transfers of development rights; and, makes technical and conforming changes. Status: Passed 4/28/08; signed by the Governor 5/1/08.

History:  A.R.S. Section 9-462.01 allows the legislative body of any municipality through ordinance to establish procedures, methods and standards for the transfer of development rights within its jurisdiction.  Such transfers are subject to notice and hearing requirements prescribed by statute and are additionally subject to the approval and consent of the property owners.  Laws 2005, Chapter 273 allows the board of supervisors (BOS) of a county to establish procedures, methods and standards for the transfer of development rights within its jurisdiction, pending the written approval of both the property owners of both the sending and receiving properties. Development rights are defined in statute as the maximum development allowed on a transferred property under the growth plans or zoning ordinances of a county or municipality.  (Source: Arizona Legislature House Summary)

HB 2221 (formerly Subdivision Notice) Strike Everything Amendment - Green Building Codes: This amendment, supported by AAR, includes the following provisions:

1.      Requires any municipality that establishes a mandatory green building program for any new development to prepare a green building impact analysis study that includes:

(a)     documentation showing that the municipality examined a range of alternative green building 

(b)     an explanation of the basis and purpose by which the municipality selected its preferred

(c)     the estimated material and installation costs for each proposed green building component.

(d)     any projected reduction in energy, water, sewer capacity and project material use, including
         the annual cost savings associated with each component.

(e)     any estimated time needed to recover the material and installation costs for each component.

(f)     the impact on new home prices and low income home buyers.

2.      Prohibits a municipality or any other political subdivision from:

(a)     requiring, as a condition of any land use or approval, that a landowner participate in any
         green building program.

(b)    denying any land use approval for not participating or installing any green building 
        measure that has not been adopted in statute.

3.      Prohibits a city or town from adopting a land use regulation or imposing any condition for issuance of a building or use permit or other approval that violates this legislation.

4.      Specifies that this legislation does not affect any green building program adopted before January 1, 2008.

Status: Passed House; Senate Government Committee voted do pass 4/7/08; in Senate Rules Committee. 

Background:  The U.S. Green Building Council (USGBC) consists of more than 7,500 organizations from every sector of the building industry with the purpose of transforming the building marketplace to sustainability. Members of the USGBC developed the Leadership in Energy and Environmental Design (LEED) Green Building Rating System. LEED is a voluntary, consensus-based national rating system for developing high-performance, sustainable buildings by recognizing five key areas of human and environmental health: (1) sustainable site development; (2) water savings; (3) energy efficiency; (4) materials selection and (5) indoor environmental quality. A number of municipalities have adopted ordinances through their building codes that address and encourage energy efficiency. For example, the City of Scottsdale, through its Green Buildings Program (Program), rates building projects in the following six environmental impact areas: (1) site use; (2) energy; (3) indoor air quality; (4) building materials; (5) solid waste and (6) water. A green building point rating system is used to qualify projects into the Program. Design flexibility is achieved by offering more than 150 green building options, while maintaining a whole building systems approach. A builder, designer or developer may enter any given number of projects into the Program. The Program is voluntary and open to builders in the Scottsdale area. Incentives offered by the city include: (1) development process assistance (expedited plans); (2) construction job site signs; (3) directory of participating builders and designers; (4) certification (green building inspections); (5) lecture series, workshops and special events; (6) homeowner’s manual (explanation of features); and (7) recognition of builders and designers on city website. (Source: Arizona Legislature website, legislative analysis prepared for Government Committee 4/8/08)

Implications for the Real Estate Industry: An incentive-based approach rather than mandatory green building requirements is preferable.  By requiring a municipality to analyze the costs, explain the process for choosing its green guidelines, and by prohibiting a mandate of green building at the land use approval stage, this bill addresses some of the concerns with costs and mandating building practices.  The bill does not appear to go so far as to prohibit mandatory building codes.

Local Activity:

Pinal County: Planner’s Report Offers a Vision for Pinal County and Southeast Valley.  Nationally renowned planner John Fregonese released his study of future growth in Pinal County to the East Valley Partnership on May 1.  The report envisions a planned community for the 275 square mile area known as Superstition Vistas, a parcel surrounded by Queen Creek, Florence, Apache Junction and the Superstition Mountains.  The plan proposes an environmentally responsible region with strong employment centers, diverse housing, quality schools and adequate public facilities.  One of the primary goals is making the area a community that is self contained, rather than the typical bedroom communities that surround Phoenix and Tucson.  Contemplated improvements include two or three hospitals, a college or university and major freeways.   The area is expected to see more than a million new occupants by 2060.  (Source: The Arizona Republic, “Study: Planning will Determine Future of SE Valley, Pinal,” 05/01/2008).

Lake Havasu City: New Zoning District for Bridgewater Channel.  City officials have approved a new zoning district for the area along Lake Havasu’s Bridgewater Channel.  The new district will allow for taller buildings and more residential development in an effort to revitalize an area that has declined in recent years.  Opponents of the “Riverwalk District” feared that the increase in development would gentrify the area’s character, but proponents are confident that the districts regulations, including architectural review provisions, will keep the riverwalk’s culture intact.  (Source: The Associated Press State and Local Wire, “Havasu Officials Back Riverwalk Development,” 04/28/2008).

Cave Creek: Annexation to Protect Conservation Areas.  Cave Creek has proposed annexing 8.8 square miles of land which contain the trails of Go John Canyon and the summit of Apache Peak.  Most of the land is owned by the state trust, but Cave Creek residents feared it would be developed in the future according to the terms of the trust.  If developed, the land could have been the site for more than 4,000 houses that would abut the spur Cross Ranch Conservation Area.  In exchange for the annexation, Cave Creek proposes allowing denser development  on 240 acres of land north of Carefree Highway, near 32nd Street.  The State Selection Board is expected to consider the proposal in June.  (Source: The Arizona Republic, “Cave Creek Pushes Annexation,” 04/14/2008).

Tucson: City Could Back Solar Power for Residents.   City officials are looking into ways to finance a program to build solar power infrastructure for its residents.  A preliminary proposal involved creating a city-wide district that would offer financing for residents to install photovoltaic panels and necessary conversion equipment.  Financing would have been funded by municipal bonds.  But City Attorneys have determined that the city lacks the authority to create such a district under Arizona law.  Tucson officials are seeking alternative means of financing solar infrastructure and are planning several future meetings to address the issue.  (Source: Arizona Daily Star, “City Eyes Plans to Back Solar Power for Residents,” 05/10/2008).




Brad Bergamini




Realty Executives Northern Arizona

503 East Gurley Street

Prescott, Arizona 86301



Main: 928.777.0257 ext 43

Cell: 928.533.1633

Fax: 928-441-1631

"Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it." --Warren Buffett


Friday, January 18, 2008

Financial Tips By Meghan Knoy

Expect Tax Refund Delays

In late December 2007, Congress decided to freeze the

expansion of the Alternative Minimum Tax (AMT), an

outdated tax law from 1969. While this was great news for

some 25 million tax payers, the late date of this

congressional action will reportedly create major delays in

the processing of tax returns and, more importantly,

refund checks.

As you might expect, the IRS had already prepared its tax

packages and computer programs to reflect the 2007 tax

year by the time Congress made its decision. Because of

this, the IRS has said that it cannot process certain

AMT−related tax forms until February 11, 2008, which

could result in an estimated 13.5 million refund delays.

The forms are:

· 8863, Education Credits

· 5695, Residential Energy Credits

· 1040A's Schedule 2: Child & Dependent Care Expenses

· 8396, Mortgage Interest Credit

· 8859, District of Columbia First−Time Homebuyer Credit

If you need advice on how to proceed with your 2007 tax

returns, give us a call. We'll make sure you get the

assistance you need to reach all of your financial goals

and needs.

Frequent "Liar" Programs

On December 31, 2007, United Airlines' Mileage Plus

program slashed its mileage−expiration policy from 3

years to just 18 months, continuing the recent trend begun

by other major airlines, such as American Airlines and

Delta. This means that going forward your miles will expire

after only 18 months of inactivity. To make matters worse,

this change is retroactive. This means that your miles may

have already expired and you don't even know it!

If you're looking for ways to keep your frequent flyer

account active without actually having to fly anywhere,

there are several easy ways customers can do this,

according to United Airlines:

· Use or sign−up for a Mileage Plus Visa credit or debit card.

· Purchase products or services from travel and retail partners.

· Use miles for merchandise, hotel stays, and dining.

· Transfer miles to another Mileage Plus member.

· Donate miles to the Mileage Plus Charity Miles program.

Know the Codes for Big Savings

Each year, more and more people turn to the Internet to

do their holiday shopping, and last year was no different.

According to Forrester Research, US online retail sales

over the holiday season alone grew 11% over the

previous year, for a total of $33 billion.

This year, if you're planning to shop online and add to

these incredible figures, do not buy anything without first

checking out, a great website that offers

coupons and promotional codes that could save you big

on the things you were already going to buy. The site

offers more than 50,000 codes and coupons at any one

time, so there's a good chance they can save you money

on whatever you need. Also, be sure to check

out Current− and,

similar sites also recommended by Kiplinger's Personal

Finance magazine.

Clean Up Your Credit or Forget It

Just when home prices and interest rates are really

starting to look attractive, Fannie Mae and Freddie Mac

announced increased delivery fees and new Loan−Level

Price Adjustments, making credit much more expensive

for potential homebuyers and homeowners looking to

refinance. These increased fees are mandatory and have

nothing to do with your mortgage professional. They are

simply Fannie and Freddie's way of recouping losses

associated with the recent rise in delinquencies and

foreclosures. Under Loan−Level Price Adjustments,

additional costs are assessed to mortgages based solely

on FICO credit score ranges that fall below 680. In the

mortgage industry, this is called risk−based pricing, and it

can really add substantial costs to a mortgage if borrowers

aren't credit ready.

If you or someone you know intends to take advantage of

the low home prices and the lowest mortgage interest

rates in years, please call us right away. We'll get you a

copy of your credit score and see what, if anything, needs

to be done. Sometimes small changes to your credit

profile can yield big results that could save thousands of

dollars on your mortgage. Other times, professional credit

repair may be required, and this process could take up to

six months to reach the scores you need. If you'd like

more information about these new fees or a free copy of

our informative Consumer Credit Scoring Booklet, just

give us a call.


Meghan Knoy

Mortgage Planner

Cherry Creek Mortgage

Phone: (928)925−6082

Toll Free: (866)386−2597

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