As our grandmas always told us, there’s no such thing as a free lunch. You may remember that in December, Washington enacted the “Temporary Payroll Tax Cut Continuation Act of 2011.” Nearly 160 million workers have benefited from the extension of the reduced payroll tax rate that was in effect for 2011. The Temporary Payroll Tax Cut Continuation Act of 2011 temporarily extended the 2% point payroll tax cut for employees, continuing the reduction of their Social Security tax withholding rate from 6.2% to 4.2% of wages paid through Feb. 29, 2012.
However, in order to pay for this two month extension, Fannie Mae and Freddie Mac credit risk guarantee fees (g-fees) were raised — 10 basis points for the next 10 years. This affects every borrower — and Orange County resident — that obtains a loan guaranteed by either of these two institutions for the next 10 years.
Now it looks like the extension might be, well, extended. There is a Congressional Conference Committee that is beginning negotiations on an increased extension. Cheryl Marquis and Gary Thomas of Evergreen Realty (Gary is also President Elect of the National Association of Realtors) do not want potential buyers and sellers in Orange County to be negatively affected by Congress’s actions. That being said, NAR and a coalition of some 18 organizations have formed and oppose using the g-fees again to pay for this extension. We are also asking them not to look at Ginnie Mae’s g-fees or FHA mortgage premiums as a source.
You can let your elected representatives know how you feel about these possible changes.
For more Orange County real estate news and happenings, follow Cheryl on Twitter @CherylSellsOC!
Cheryl Marquis has been an active and successful real estate agent in South Orange County, California for more than 25 years. As a TOP PRODUCER in her company, Cheryl has received the specific accreditation of a Certified Relocation Specialist (CRS) and Accredited Buyers Agent (ABR) and is a member of the Who’s Who of Luxury Real Estate, a select network of the world’s leading luxury home agents. A member of C.A.R. (California Association of Realtors), N.A.R. (National Association of Realtors) and O.C.A.R. (Orange County Association of Realtors). To talk to Cheryl about buying or selling a home in Orange County, call her at 949.683.1501 or visit her online at www.CherylSellsOC.com.