*INCOME REQUIREMENTS TO QUALIFY:

- Families of 1-2 must make less than $71,200/year
- Families of 3 or more must make less than $81,880/year

Here is how it works:

If you are reading this and you didn’t already know — the interest paid on your primary residence is a tax deduction.  This means if you pay 10k in interest per year, the deduction would equal 10k of your income that you wouldn’t have to pay taxes on — it becomes TAX FREE INCOME.  If you are in a 25% marginal tax bracket, this translates into $2,500 in real dollars to you.  The MCC converts the first 20% of this deduction to a a tax credit. This means a dollar for dollar refund to you!  So for the same homeowner with 10k in interest to work with, the MCC would translate into $2k cash back PLUS the remaining 80% as a deduction, or $1600 totaling an annual refund of $3,600, an almost 50% increase in tax benefit.

This benefit lasts for the ENTIRE LIFE OF THE MORTGAGE.

Only if you sell or refinance, would this benefit end.

There are some things to consider as well:  There is a potential “recapture tax” for those who SELL the property in the first 9 years.  If your income exceeds the maximum threshold at the time of sale (during the first 9 years), you could be forced to repay the city for the benefits received from your home’s profit.  Please call me for details, and for more analysis about how this special first time home buyer program in Portland, OR could work for you.

Mortgage Trust, Inc. has been allowed to offer this MCC program in partnership with the city of Portland, and I have taken the class certifying me to consult with home buyers about it.

Also — Please refer to Portland Housing Bureau for more details about this program.  Please also note that there are two designated “target areas” in NE Portland that qualify home buyers for the MCC even if you ARE NOT a first time home buyer.

The Oregonian just published an article about this MCC first time home buyer program in Portland.

Read more about first time buyer programs in Oregon.

Conversely, I also began to fantasize about what might happen if some of the current mortgage business model were applied to the airline industry- particularly that of the “commission only” sales model.  What if flight crews, and ground crews could pick their own members, and work together to create a fantastic customer experience.  They would make their own websites, and try to make it easy for their customers to buy tickets, arrive, check-in, get through security, and get to where they need to go.  They could actually form real relationships with the passengers, and come up with all sorts of ways to create added value to the traveling experience.  Think of it- packing tips, special parking deals, curbside attention, I bet it would get very creative. If these crews were compensated directly by repeat bookings, customer feedback, or just tickets sold, wouldn’t you imagine that these employees would be aligned perfectly with what needed to be done?  Wouldn’t you imagine that these employees would take so much pride in trying to do their best? Given a choice which would you make?

This is what I love about doing mortgages, and particularly the “commission only” model of being compensated.  At first it was a huge fear, and a huge problem.  It takes a while to get the hang of what goes into accomplishing a loan closing, and during that learning curve you are simply NOT MAKING MUCH MONEY.  But once you focus on what is really important, its amazing what starts to happen.

My fear for the mortgage industry is that it becomes so commoditized, and so suffocated by regulations that the profit is wrung out of the product completely.  If this happens, getting a mortgage will become more like cross country air travel.  You’ll randomly select the cheapest mortgage you can from some website, and fight your way through a pre-recorded 1-800 labyrinth, and totally herded through the signing process completely. All of the humanity and initiative will be surgically removed.  Hopefully this never fully happens or is a long way off, and I may be off base.  I would love to hear your thoughts on this if you have them.

One of the major benefits with working with me, or any other true professional in this business is that you will have a single person who is totally accountable for the outcome.  Even though there is a team of people at work to make it come together for you, its my ego, my reputation and ability to receive future referrals- literally my livelihood that is at stake every time.  I wouldn’t have it any other way. Wouldn’t it be awesome if the folks on the ground in the airline industry had this much accountability?

What will be happening is, this website: Pdxhomeloan.com will be repurposed, and its blog functionality will be greatly reduced. I will be transferring all future blog posts to my new mortgage blog: www.oregonmortgageblog.com

Please get connected to me in this same way that you’ve come accustomed to by clicking this link to the networked blogs fan page, and following this rss feed.

I really value your willingness to communicate with me, and I’m always looking to deepen our conversation. Please give me any feedback good or bad, and I’ll do my best to make you guys the most informed real estate enthusiasts in Portland!

I am making our HQ office of Mortgage Trust into a “drop point” for all of my clients and friends. There are other places to donate and other ways to get involved. I invite you to engage with us in this effort, our goal is to collect 500 items before Christmas Eve. If you are out of the area, you can feel free to mail a clothing donation to us here at Mortgage Trust. Please just send it c/o James Adair and I’ll make sure it gets to the right place. If you are in the area, please swing by our offices and bring what you can.

Scott has set up a Facebook Group page that is the main gathering point for more information about the comings and goings as this effort evolves. Please link to it, share it with your friends, try to dig out an old sweater and lets do a little something together for those who are out on the short end of this current cold spell.

Thanks.

They explain that a huge part of the problem lies in the role that ratings agencies (Moodys, Standard & Poors etc) currently have. In the late 30′s the FDR administration made it a law that any big pension fund or retirement fund making investments could ONLY purchase bonds that were AAA rated. That AAA rating is a virtual guarantee that the money would be paid back to the bond holder. Well, all of the subprime mortgage backed bonds got this AAA rating, and then got downgraded to B’s and C’s. When this happened all of the pension funds were LEGALLY REQUIRED to sell them ALL AT THE SAME TIME! So we all know what happens to the price of a thing when everyone is selling and literally NOBODY is buying. The price plummets.

Think of it like Movie ratings…. the AAA is the equivalent to a “G” rated movie…. Take the whole family to see it, nobody will be offended.

What has happened in the last 20+ months is the equal to you taking your family to see a G rated pixar film, and then an hour into it peoples heads start getting blown off, and they start cursing a blue streak. Everyone leaves the theater!

LISTEN TO THE PODCAST HERE