Finance Your Home Purchase
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5 Tips for Deciphering Your Home Loan’s Good-faith Estimate
Knowing how to read your good-faith estimate can help you save money on your home loan. Read
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7 Homeowner Tax Advantages
When you’re evaluating how much home you can afford, make sure you factor in the tax advantages of homeownership. Read
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4 Tips to Determine How Much Mortgage You Can Afford
By knowing how much mortgage you can handle, you can ensure that home ownership will fit in your budget. Read
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7 Tips for Improving Your Credit
Here’s how to clean up your credit so you get the least-expensive home loan possible. Read
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Find the Home Loan that Fits Your Needs
Understand which mortgage loan is best for you so your budget is not stretched too thin. Read
Visit houselogic.com for more articles like this.
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No More Tax On Forgiveness Of Debt In California
By · CommentsNO MORE STATE TAX ON FORGIVEN DEBT
Distressed homeowners no longer have to pay California state income tax on debt forgiven in a short sale, foreclosure, or loan modification. Enacted into law yesterday, Senate Bill 401 generally aligns California’s tax treatment of mortgage debt relief income with federal law. For debt forgiven on a loan secured by a “qualified principal residence,” borrowers will now be exempt from both federal and state income tax consequences. The existing federal exemption is for indebtedness up to $2 million, whereas the new California exemption is for indebtedness up to $800,000 and forgiven debt up to $500,000.
“Qualified principal residence” indebtedness is defined as debt incurred in acquiring, constructing, or substantially improving a principal residence. It includes both first and second trust deeds. It also includes a refinance loan to the extent the funds were used to payoff a previous loan that would have qualified.
The tax breaks apply to debts discharged from 2009 through 2012. Californians who have already filed their 2009 tax returns may claim the exemption by filing a Form 540X amendment.
Taxpayers who do not qualify for the above exemptions (e.g., second home or rental property) may nevertheless be exempt under other provisions. Most notably, taxpayers who are bankrupt are exempt from debt relief income tax. Also, taxpayers who are insolvent are exempt from debt relief income tax to the extent their current liabilities exceed current assets.
For more information about mortgage forgiveness tax consequences, go to California Franchise Tax Board’s Mortgage Forgiveness Debt Relief Extended webpage and the Internal Revenue Service’s Mortgage Forgiveness Debt Relief Act and Debt Cancellation webpage. The full text of Senate Bill 401 is available at www.leginfo.ca.gov.
Brought to you by the California Association Of Realtors
Leon C. Williams Certified Foreclosure Specialist Pre-Foreclosure Coach leon@williamslandmark.com Leonsblog Sacramento Short Sale Guru Sacramento Pre-foreclosure Workshop Williams Landmark Real Estate
Californians have a brief window of opportunity to receive up to $18,000 in combined federal and state homebuyer tax credits. To take advantage of both tax credits, a first-time homebuyer must Read More→
I’m gratified to report that late this afternoon, Gov. Schwarzenegger signed Assembly Bill 183, the Homebuyer Tax Credit legislation, into law. His actions today are the result of our efforts in Sacramento over the last several weeks as members and our team in the capital worked for the bill’s passage before it landed on the governor’s desk.
AB 183 will provide $200 million for home buyer tax credits, allocating $100 million for qualified first-time home buyers of existing homes and $100 million for purchasers of new, or previously unoccupied, homes. The eligible taxpayer who purchases a qualified personal residence on and after May 1, 2010, and on or before Dec. 31, 2010, or who purchases a qualified principal residence on and after Dec. 31, 2010, and before Aug. 1, 2011, pursuant to an enforceable contract executed on or before Dec. 31, 2010, will be able to take the allowed tax credit. The credit is equal to the lesser of 5 percent of the purchase price or $10,000, in equal installments over three consecutive years. Under AB 183, purchasers will be required to live in the home for at least two years or forfeit the credit (i.e., repay it to the state).
The positive impact of the federal home buyer tax credit is clear. Nearly 40 percent of first-time home buyers said they would not have purchased a home if the federal tax credit for first-time home buyers was not offered, according to C.A.R. research conducted last year.
The state’s previous home buyer tax credit program was so successful that it ran out of tax credits by the end of June 2009, eight months before it was set to expire and just as housing markets appeared to be turning a corner. Unlike last year’s legislation, AB 183 adds a tax credit for the purchase of an existing home by a first-time home buyer.
AB 183 will significantly contribute to the effort to stimulate jobs-creation within California’s housing market by helping to incentivize first-time home buyers to purchase homes that have been abandoned, foreclosed upon and returned to the lender, or have been sitting on the market for extended periods of time. It is these homes that will require substantial rehabilitation by the new owners, which will in turn generate a tremendous increase in jobs and accessory purchases connected to home improvement activities.
Your Association’s efforts at the state and federal level to help protect private property rights and your right to conduct business are ongoing. This promises to be another busy year in the state legislature and in Washington, D.C.
If you’re not already involved in the political process, I encourage you to do so. You can go to http://www.car.org/governmentaffairs/getinvolved/ for a quick guide to involvement opportunities at the local, state, and national levels.
Sincerely,
Steve Goddard
2010 President
CALIFORNIA ASSOCIATION OF REALTORS®
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10 Good Reasons Lenders Should Say No to Priority Losses
By · Comments10 Good Reasons Lenders Should Say No to Priority Losses
1. Goodwill
If you permit the borrower to start construction before your deed of trust is recorded you are relying on the borrower’s ability to get the title company to accept an indemnity to issue its policy without exception to possible mechanics’ liens. The title company may not accept the indemnity. If the indemnity is refused you cannot fund the loan and that will create a loss of goodwill with the borrower.
2. Added Costs
Even if the title company issues its policy the lender may face added costs when mechanic’ liens are recorded. Your staff, particularly the senior management and legal department, will spend additional hours on settlement negotiations and legal actions.
3. Closing Delays
The inspection for priority of a deed of trust is not made until the recording is anticipated. When the title company inspection reveals construction has started, closing is delayed while the title company gathers the facts if needs to evaluate the acceptability of the risk created by the start of construction prior to recordation of the deed of trust.
4. Litigation Delays
In the event mechanics’ liens are recorded, a sale of your loan or its payoff may be delayed. The title company may decide to challenge the validity of the liens. While the needed litigation proceeds you may incur months or years of delay in selling your loan or having it paid off. You do not have the control you would have when prior recordation is achieved.
5. Loss of Take-out Lender
A take-out lender may not purchase your loan or make a new loan in the face of recorded liens even if the title company insures against loss or damage because of enforcement of the liens. By law, many lenders must have a first lien position, and special insurance by the title insurer does not meet those legal requirements.
6. Marketability of Title
A buyer may decline to buy the completed work of improvement of any mechanics’ liens are recorded. This could result in your funds being tied up longer than expected resulting in a loss of earnings.
7. Adverse Publicity
In the event of legal action the lender’s name is used in the suit, not the title company’s. Such adverse publicity is not needed.
8. Bankruptcy Delays
To forestall foreclosure of a mechanics’ lien the borrower may file bankruptcy. In that event your funds are tied up for periods of time far in excess of those contemplated when the loan fees were charged.
9. Foreclosure Problems
The foreclosure of a deed of trust recorded prior to the start of construction generally extinguishes mechanics’ liens. Such is not the case if construction starts before recordation of your deed of trust.
If the deed of trust is recorded after the construction commences all lien claimants’ interests may be superior to the deed of trust. This is true even if the lien claimant started work after the deed of trust has been recorded. All lien claimants’ rights begin at the same time, that is, at the time the first work is started on the project.
10. You do NOT have the control you would have when prior recordation is achieved.
Prevent Problems. While no one makes a construction loan expecting problems, we must recognize that problem projects do arise. The best way to avoid problems is to anticipate them. Insist on prior recordation of the construction loan. Remember, a deed of trust recorded before the start of construction and before materials are furnished is prior to the claims of any mechanics’ liens.
Have a great weekend!
Angie Paratore Commerce Title Company 5750 Sunrise Blvd. #220 Citrus Heights, Ca 95610 phone: 863.1791 fax: 863.3296 cell: 847.9211 angie.paratore@titlemail.comForeclosure Vs Short Sale
By · CommentsWhat Are The Consequences Of A Foreclosure VS Short Sale:
So, you’ve met with a professional who is suppose to be knowledgeable about foreclosures and you still are not sure whether to let your home go to foreclosure or expend the mental energy to attempt a short sale on your property. Here are some very important points to consider in making your final decision on whether to short sale or foreclose.
Impact On Your Credit Score:
Keep in mind that there are too many variables outstanding to make a blanket assertion as to the affect on your credit score because everybody’s circumstances are different. That being said, it is possible for your score to be lowered anywhere from 250 to over 300 points if you let your house just go into foreclosure and can typically affect your score for over 3 years. With a short sale only late payments on the mortgage will show and after the sale the mortgage is typically reported as paid, negotiated, less than full payment, etc. Providing all other payments have been made on time this could potentially lower your score as little as 50 points. This does however depend on other facts like, length of credit history, amount of credit, balance to credit ratios, etc.
Impact On Your Credit History:
A foreclosure will be reported on your credit history for at least 7 years. At the time of this writing there is no reporting for a short sale. The loan is typically reported as paid, negotiated, less than full payment, etc.
Ability To Obtain Future Fanniemae Financing On A Primary Residence:
Letting a home go to foreclosure renders you ineligible for another Fanniemae backed mortgage for a period of 5 years. If your are successful closing a short sale you will be eligible for a Fanniemae backed mortgage after 2 years.
Ability To Obtain Future Fanniemae Financing On A Non Primary Residence:
If you are an investor and you let the home go to foreclosure that would render you ineligible for a Fanniemae backed mortgage for a period of 7 years. If you are an investor and you are successful at closing short sale you will be eligible for a Fanniemae backed mortgage after only 2 years.
Ability To Obtain Future Financing With Any Mortgage Company:
On any future 1003 application, a prospective borrower will have to answer YES to question C in Section VIII of the standard 1003 that asks “Have you had property foreclosed upon or given title or deed in lieu thereof in the last 7 years?” this will affect future rates. There are no similar declarations or question regarding a short sale.
The Affect on Security Clearances:
A Foreclosure on your record can make obtaining a security clearance impossible. It can rate just below a felony conviction or a serious misdemeanor. If you have a foreclosure and are a police officer, in the military, in the CIA, Security, or any other position that requires a security clearance in almost all cases clearance will be revoked and position will be terminated. A Short Sale on its own does not challenge most security clearances.
The Affect On Your Current Employment:
Employers have the right and are actively checking the credit regularly of all employees who are in sensitive positions. A foreclosure in many cases is ground for immediate reassignment or termination. Because a short sale is not reported on a credit report there are usually no employment issues.
The Affect On Future Employment:
A lot of employers are requiring credit checks on all job applicants. A foreclosure is one of the most detrimental credit items an applicant can have and in most cases will challenge employment. A short sale is not reported on a credit report and as a result there are usually no future employment issues.
Deficiency Judgment:
Depending on your state and laws the bank has the right to pursue a deficiency judgment. With a short sale it is possible to negotiate with the lender to not pursue a deficiency judgment against the homeowner.
The Affect On Your Well Being:
This might not seem very important, but the sense of failure that most people seem to feel when there house goes to foreclosure can not be discounted. Homeowners seem to feel better about themselves when they can successfully negotiate a deal with the bank thereby saving themselves the perceived humiliation of not honoring there word to pay
Sacramento Foreclosure Stop
By · CommentsMost people are under the impression that once a foreclosure starts it can not be stopped. That can not be further from the truth. I call this “The Foreclosure Stop Approach”.
There are several techniques to stopping a foreclosure. Here are seven things you can do to execute the “Foreclosure Stop” approach.
First, there is negotiating with your lender. The typical response from a homeowner when faced with not being able to pay the mortgage is to not anwer the telephone. This technique however is never a good strategy. Lenders rarely cooperate with borrowers who contact them on the eve of a foreclosure sale. Respond to all calls, letters and emails. It is also important to make sure you are dealing with your “current” lender nad negotiate with a spirit of cooperation while talking the lenders language. Bone up on various negotiation strategies.
Second, you can refinance out of your current mortgage. You may not be in the position to affect a typical refinance as your home may be too “Upside Down”. Other questions you may want to ask if you are considering a refinance is; Should you use a Mortgage Broker?; Will you qualify for refinancing?; What kind of loan you should get?; Will the closing costs make it worth while? Make sure that you work with a Certified Mortgage planner to discuss your options.
Third, if you are in the military you might be able to use the “Soldiers’ Civil Act of 1940″ and the Service Members Civil Relief Act of 2003 (collectively called the SSCRA). The SSCRA is the protection of active military personnel and their families from foreclosure. The SSCRA can be used to stop a foreclosure, invalidate a foreclosure sale, or reduce your loan interest rate. You are going to want to find and attorney that thoroughly understands these Acts.
Fourth, you can use the courts to stop a nonjudicial foreclosure. The biggest question here is do you have grounds to go to court. These generally fall into two main categories. 1. Disputes over your state’s foreclosure procedures. 2. Disputes with your lender over the terms of your promissary note and/or deed of trust.
Fifth, you can file Bankruptcy.
Sixth, you can sell your property quickly to stop the foreclosure. If you owe more on your house than it is worth you will have to do what is known as a shortsale.
Seventh, You can give your lender a Deed In Lieu Of Foreclosure. This is essentially just signing the property back to a lender. There are many reasons why a lender would or would not do this, however this article is much to short to go into.
The bottom line is you do have several options to perform a “Foreclosure Stop“. The sooner you act the more options you will have. Learn more by attending the Sacramento Pre-Foreclosure Workshop.
Leon C. williams Financial Strategist Certified Foreclosure Specialist Certified Mortgage Planning Specialist Pre-foreclosure Coach leon@lucafinancial.com Learn more by attending the Sacramento Preforeclosure Workshop.Realtor VS Unlicensed Foreclosure Consultant
By · CommentsWhy Use a Realtor Instead of An Unlicensed Foreclosure Consultant If You Are Short Selling Your House?
