More Homebuyers Backing Out of Deals as Mortgage Rates Hit 23-Year High

Homebuyers are backing out of deals at the highest rate in nearly a year, a new study found. The culprit: higher mortgage rates, Yahoo Finance reported. Roughly 53,000 U.S. home purchase agreements fell through in September, according to Redfin, equal to 16.3% of homes that went under contract that month. That’s the highest percentage of canceled contracts since October 2022, when mortgage rates surpassed 7% for the first time in two decades. The share is also up from 15.2% a month earlier and 15.8% a year earlier. Pandemic boomtowns where home prices skyrocketed due to the influx of remote workers were hit the hardest by buyers with cold feet, with some areas in Florida seeing contract cancellation rates of over 20%. The reaction from buyers comes as mortgage rates remained at 23-year highs between August and September, convincing rate-sensitive folks to call it quits on their home-purchase plans. Even more cancellations may be on the horizon, as rates hover near 8%.
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Santa Fe Considers Tax on Mansions as Housing Prices Soar

Voters are deciding whether to tax mansions to pay for affordable housing initiatives in a state capital city prized for its desert-mountain vistas, vibrant arts scene and stucco architecture rooted in Native American and Spanish-colonial tradition, the Associated Press reported. The tax on homes sold for more than $1 million is being pitched as a lifeline to teachers, service-sector workers, single parents and young professionals who can’t afford local mortgages or struggle to pay rent amid a national housing shortage and the arrival in Santa Fe, N.M., of high-income digital nomads and affluent retirees. The Nov. 7 ballot measure is the latest bellwether for the popularity of so-called mansion taxes to fund affordable housing and stave off homelessness. It comes on the heels of a voter-approved initiative in Los Angeles and new proposals from Chicago to Massachusetts. If approved, the measure would add a 3% tax on residential property sales of $1 million or more — with no tax on the first $1 million in value. On a $1.2 million home sale, for example, the new tax would apply to $200,000 in value. The buyer would pay $6,000 to the city’s affordable housing trust fund. The city estimates that the tax would generate about $6 million annually for the trust, which underwrites price-restricted housing, down-payment assistance for low-income homebuyers and rental assistance to stave off financial hardship and evictions. The trust awards funds each year to affordable housing providers who can secure matching funds from other government and nonprofit sources, explained Alexandra Ladd, director of Santa Fe’s affordable housing office. But Santa Fe voters have shied away from prominent tax initiatives in the past, rejecting a proposed similar 1% tax on high-end home sales in 2009 and defeating a tax on sugary drinks to expand early childhood education in 2017.
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Judge Explains Why Tax Liens Are Subordinated to Domestic Support Obligations

Congress decided to deviate from standard priorities by providing in Section 724 that unsecured domestic support obligations come ahead of tax liens.

Filing Bankruptcy After Renewing a Title Loan Again Found Not to Be Bad Faith

Title lenders continue losing battles to take cars away from debtors, but the lenders have yet to plead and prove their best cases.

Bankruptcy Courts Have Statutory Power to Remove Voided Liens

Bankruptcy Rule 7070, incorporating Federal Rule 70 along with 28 U.S.C. § 1655, gives bankruptcy courts power to remove liens of record when the lenders don’t do so voluntarily.