My friend told me that I shouldn’t do a short sale because I will get a 1099!!!

February 3, 2010

Okay, so your friend told you, “Don’t do a short sale because you will get a 1099 for the amount the bank writes off.” This is true, but there are ways to deal with the 1099-C that you will receive.

The thing that most people don’t know or don’t tell you is that with a Foreclosure, you WILL STILL get a 1099-A.

Yes, you will still get a 1099 on a Foreclosure!

What’s the difference between a 1099-C and a 1099-A? The ‘C’ stands for “Cancellation of Debt” and the ‘A’ stands for “Acquisition or Abandonment of Secured Property”.  The differences are much more than you get the ‘C’ with a short sale and the ‘A’ with a foreclosure.Insolvency Worksheet

The tax consequences for the ‘C’ and the ‘A’ are the same.  You may not even be required to pay taxes on the ‘income’ as shown on the 1099-C, but don’t just assume that you won’t have to pay.

Before making your final decision, first consult your CPA or tax preparer.  Click here and you can learn more about the 1099-C and figure on the worksheet if you are insolvent.

So if I am going to get a 1099 anyway why should I go through the hassle of a short sale??

Well, here’s why……..reason 1- to foreclose on a home costs a lender a huge amount of money, with the legal fees, advertising fees, recording fees, court costs, insurances etc..etc all that money gets figured on the 1099 that you will pay taxes on…..reason 2 – foreclosed homes tend to sell for less money than it’s short sale counterpart so there is more money to add to the 1099….reason 3 – your credit report, you really do not want a foreclosure on your credit report if you have a choice.

If you know of anyone that would benefit from a short sale  I would be happy to assist.

Bobbie Files
Your Bristol and Plymouth County Realtor
508-238-5000 x.296  Office
508-521-9480  Direct
888-570-9907  Toll Free Direct Fax
bobbiefiles@kw.com Email

Visit my website at www.BerkleyMass.com

Search for Berkley Ma Homes at: http://BerkleyHomes.BerkleyMass.com

Search for Taunton Ma Homes at: http://TauntonHomes.BerkleyMass.com

For those struggling to pay your mortgage payments please visit: http://shortsales.berkleymass.com

To Make a Donation to the Haiti Disaster Relief please visit: http://haitirelief.berkleymass.com

ARE YOU INTERESTED IN PURCHASING ONE OF THE INCREDIBLE FORECLOSURE BUYS ON THE MARKET???




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Wall Street Journal: 2010 Could be the Year of the Short Sale

February 1, 2010

This article came from the Wall Street Journal:

January 27, 2010, 9:56 AM ET

Why 2010 Could Be the Year of the ‘Short Sale’ If 2009 was the year of the foreclosure (and loan modification), then 2010 may be shaping up as the year of the short sale. For years, real-estate agents have groaned about the difficulty of pulling off a short sale, which can involve a handful of third parties—the first and second mortgage holders, the mortgage insurance company, or Fannie Mae and Freddie Mac. Locking up all the approvals for a short sale can take months, leading potential buyers to walk away from the deal or a lower appraisal to scuttle the deal. That’s especially frustrated agents because short sales let banks avoid having to foreclose and manage the property themselves, and it often results in a better price than the bank would receive if the property went to foreclosure. According to Fidelity, sales of bank-owned homes in the Phoenix region often result in $38,000 less per transaction than short sales. A another quarterly report on loan metrics from bank regulators, which includes data on around two-thirds of all first mortgages, found that around 31,000 short sales were completed in the third quarter of 2009, more than double the level from one year earlier. (By comparison, there were 118,000 foreclosures during that quarter, a 7% decrease from one year earlier). Housing economist Thomas Lawler has predicted that an uptick in short sales as a share of total sales could also provide an unexpected lift to home prices this year. He estimates that short sales accounted for around one in five distressed sales last year, up from around 9% in 2008. “Given recent lender behavior, increased staffing in the loss mitigation area of mortgage servicers, and the administration’s recent “push” … to encourage more short sales,” he writes, “it is extremely likely that the recent uptrend in short sales relative to foreclosure sales will continue this year.”

What I found VERY interesting is that the numbers show that Short Sale transactions nearly doubled while at the same time the number of foreclosures went down.  Does this mean that the lenders are finally realizing that a short sale is better for their bottom line? Do homeowners see that in a lot of situations a short sale is FAR more desirable to their credit situation than a foreclosure?

I would love to have comments to see what your thoughts are on this!!!

Bobbie Files
Your Bristol and Plymouth County Realtor
508-238-5000 x.296  Office
508-521-9480  Direct
888-570-9907  Toll Free Direct Fax
bobbiefiles@kw.com Email

Visit my website at www.BerkleyMass.com

Search for Berkley Ma Homes at: http://BerkleyHomes.BerkleyMass.com

Search for Taunton Ma Homes at: http://TauntonHomes.BerkleyMass.com

For those struggling to pay your mortgage payments please visit: http://shortsales.berkleymass.com

To Make a Donation to the Haiti Disaster Relief please visit: http://haitirelief.berkleymass.com

ARE YOU INTERESTED IN PURCHASING ONE OF THE INCREDIBLE FORECLOSURE BUYS ON THE MARKET???
VISIT – http://JustForeclosures.BerkleyMass.com


Am I liable if I am on the deed and not the mortgage?

January 28, 2010

I believe there is some confusion as to the responsibility or liability between spouses or co-owners in regards to a short sale.  I am prefacing this by saying I AM NOT AN ATTORNEY AND DO NOT CONSTRUE THIS AS LEGAL ADVICE.
 
There are 3 forms that matter when you buy and / or re-finance a home.
 
1.) The Deed: It says who the owners of the property are. PERIOD. It does not have any other meaning other than to record and memorialize the rightful owners of a property.
 
2.) The Mortgage or Deed of Trust: This is the “security instrument” which gives the lender a claim against your house if you fail to live up to the terms of the mortgage note. It recites the legal rights and obligations of both you and the lender and gives the lender the right to take the property by foreclosure if you default on the loan. The mortgage or deed of trust will be recorded, providing public notice of the lender’s claim (lien) on the property. It notifies the public and all owners on the Deed of the mortgage note. Whether or not you are on the “note” you will be on the Mortgage Deed as you need to “give them the permission or right” to foreclose if the note holder does not pay.
 
3.) The Mortgage Note: The mortgage note is legal evidence of your indebtedness and your formal promise to repay the debt. It sets out the amount and terms of the loan and also recites the penalties and steps the lender can take if you fail your payments on time. This the person that is legally obligated to pay the debt and the person the lender will chase down for the money.
 
 
I am explaining these differences for a reason.
 
The bank ONLY has a loan with the person on the NOTE not on the Mortgage Deed.  They need the permission of ALL people on a Deed to allow any one person the right to encumber the property with a Mortgage. Being on a Mortgage Deed means that you will get notified when the person on the Note defaults and it notifies you so that if you want to maintain owning your property and not have them foreclose it you have the chance to do so. It does not obligate you to the debt.
 
The short sale lender issues the 1099C form that gets submitted to the IRS. They issue it to the Mortgage Note Holder as they were the one that owes the money NOT the others on the Mortgage Deed as they did not sign for the debt they only allowed the debt to happen to their property.
 
Below are a couple of website links for additional reading on the ownership / indebtedness difference.
 
http://www.mortgagefit.com/quitclaim/cosigner-note.html
http://www.uslaw.com/library/Loan_Modification/signed_mortgage_note.php?item=681060
 
I STRONGLY ADVISE A CONSULTATION WITH AN ATTORNEY AND / OR A CPA TO SEEK VERIFICATION AND CLARIFICATION ON WHAT I AM SENDING YOU!!!!!!!!!!!!! Most attorneys allow for a free consultation in which they can be asked how a short sale with affect a person on the deed and not on the note. 
 
I hope the definitions have helped.

Bobbie Files
Your Bristol and Plymouth County Realtor
508-238-5000 x.296  Office
508-521-9480  Direct
888-570-9907  Toll Free Direct Fax
bobbiefiles@kw.com Email

Visit my website at www.BerkleyMass.com

Search for Berkley Ma Homes at: http://BerkleyHomes.BerkleyMass.com

Search for Taunton Ma Homes at: http://TauntonHomes.BerkleyMass.com

For those struggling to pay your mortgage payments please visit: http://shortsales.berkleymass.com

To Make a Donation to the Haiti Disaster Relief please visit: http://haitirelief.berkleymass.com

ARE YOU INTERESTED IN PURCHASING ONE OF THE INCREDIBLE FORECLOSURE BUYS ON THE MARKET???
VISIT – http://JustForeclosures.BerkleyMass.com


Foreclosures decreased in 2009, but we’re far from done!

January 22, 2010

According to a recent article posted by WBUR http://www.wbur.org/2010/01/21/foreclosures-2 the foreclosure rate fell 25% in 2009 from the numbers in 2008.  However the filings for Petition to Foreclose (the 1st step a bank takes in the process to foreclose) has risen dramitically.  They have called the position we are currently in the “Eye of the Storm”

Bobbie Files
Your Bristol and Plymouth County Realtor
508-238-5000 x.296  Office
508-521-9480  Direct
888-570-9907  Toll Free Direct Fax
bobbiefiles@kw.com Email

Visit my website at www.BerkleyMass.com

Search for Berkley Ma Homes at: http://BerkleyHomes.BerkleyMass.com

Search for Taunton Ma Homes at: http://TauntonHomes.BerkleyMass.com

For those struggling to pay your mortgage payments please visit: http://shortsales.berkleymass.com

To Make a Donation to the Haiti Disaster Relief please visit: http://haitirelief.berkleymass.com

ARE YOU INTERESTED IN PURCHASING ONE OF THE INCREDIBLE FORECLOSURE BUYS ON THE MARKET???
VISIT – http://JustForeclosures.BerkleyMass.com


FHA to temporarily suspend the 90 Day ownership requirement

January 18, 2010

Please read below an article from HUD:

HUD No. 10-011
Lemar Wooley
(202) 708-0685
FOR RELEASE
Friday
January 15, 2010
HUD TAKES ACTION TO SPEED RESALE OF FORECLOSED PROPERTIES TO NEW OWNERS
Measure to help bring stability to home values and accelerate sale of vacant properties
WASHINGTON – In an effort to stabilize home values and improve conditions in communities where foreclosure activity is high, HUD Secretary Shaun Donovan today announced a temporary policy that will expand access to FHA mortgage insurance and allow for the quick resale of foreclosed properties. The announcement is part of the Obama administration commitment to addressing foreclosure. Just yesterday, Secretary Donovan announced $2 billion in Neighborhood Stabilization Program grants to local communities and nonprofit housing developers to combat the effects of vacant and abandoned homes.

“As a result of the tightened credit market, FHA-insured mortgage financing is often the only means of financing available to potential homebuyers,” said Donovan. “FHA has an unprecedented opportunity to fulfill its mission by helping many homebuyers find affordable housing while contributing to neighborhood stabilization.”

With certain exceptions, FHA currently prohibits insuring a mortgage on a home owned by the seller for less than 90 days. This temporary waiver will give FHA borrowers access to a broader array of recently foreclosed properties.

“This change in policy is temporary and will have very strict conditions and guidelines to assure that predatory practices are not allowed,” Donovan said.

In today’s market, FHA research finds that acquiring, rehabilitating and the reselling these properties to prospective homeowners often takes less than 90 days. Prohibiting the use of FHA mortgage insurance for a subsequent resale within 90 days of acquisition adversely impacts the willingness of sellers to allow contracts from potential FHA buyers because they must consider holding costs and the risk of vandalism associated with allowing a property to sit vacant over a 90-day period of time.

The policy change will permit buyers to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales. This will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods and communities.

“FHA borrowers, because of the restrictions we are now lifting, have often been shut out from buying affordable properties,” said FHA Commissioner David H. Stevens. “This action will enable our borrowers, especially first-time buyers, to take advantage of this opportunity.”

The waiver will take effect on February 1, 2010 and is effective for one year, unless otherwise extended or withdrawn by the FHA Commissioner. To protect FHA borrowers against predatory practices of “flipping” where properties are quickly resold at inflated prices to unsuspecting borrowers, this waiver is limited to those sales meeting the following general conditions:

  • All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.
  • In cases in which the sales price of the property is 20 percent or more above the seller’s acquisition cost, the waiver will only apply if the lender meets specific conditions.
  • The waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program.

Specific conditions and other details of this new temporary policy are in the text of the waiver, available on HUD’s website.

Bobbie Files
Your Bristol and Plymouth County Realtor
508-238-5000 x.296  Office
508-521-9480  Direct
888-570-9907  Toll Free Direct Fax
bobbiefiles@kw.com Email

Visit my website at www.BerkleyMass.com

Search for Berkley Ma Homes at: http://BerkleyHomes.BerkleyMass.com

Search for Taunton Ma Homes at: http://TauntonHomes.BerkleyMass.com

For those struggling to pay your mortgage payments please visit: http://shortsales.berkleymass.com

To Make a Donation to the Haiti Disaster Relief please visit: http://haitirelief.berkleymass.com

ARE YOU INTERESTED IN PURCHASING ONE OF THE INCREDIBLE FORECLOSURE BUYS ON THE MARKET???
VISIT – http://JustForeclosures.BerkleyMass.com


Legitimate Locations to donate for Haiti Relief

January 17, 2010

Below are a list of legitimate organizations for you to make a donation.  These people need our help.  If you can only afford $1.00 that is great! Every dollar counts!!!!!!!

Airline Ambassadors – This organization of airline employee and members donates trips, in this case, to Haiti. The website reports:

Airline Ambassadors has acquired several aircraft from various major carriers. Each aircraft will carry 80,000 lbs. of critically needed, prescribed aid. Flights will depart from Denver, Miami, and JFK. We are currently working with Catholic Relief Services, Food for the Poor, LDS Charities, and Southern Command.

American Jewish World Service – Has a special Haiti-relief effort underway. From the press release:

“We are assessing where the gaps in service are and putting a process in place to help specific communities that might not be immediately served otherwise,” said AJWS’s vice president for programs, Aaron Dorfman. “Because of the economic and political situation in Haiti, disasters like this have devastating consequences throughout the country. Our long-standing partnerships with grassroots organizations in Haiti allow us to reach the poorest and most remote populations with the speed necessary to save lives.”

American Red Cross (Reportedly has contributed $200,000 to Haiti relief.)

AmeriCares Help For Haiti. Goes to their International Disaster Relief Fund.

American Friends Service Committee – From the email:

American Friends Service Committee is seeking donations for immediate Haiti relief. This (Nobel Peace Prize winning) organization has a strong track record for efficient delivery of aid that actually goes to those in need.


AMURT is Ananda Marga Universal Relief Team – From the website:

AMURT & AMURTEL staff and volunteers are already on the ground and support teams are flying there in the coming days to assist in the operation. We have a decade of experience with relief work in Haiti and facilitate many ongoing development projects there. We are going to respond to this calamity fast and effectively and we are committed to stay as long as it takes to alleviate the suffering this natural disaster has brought about.

 

CARE – Reportedly has an ongoing program that focuses on food, water, and health security in Haiti  For program info: http://www.care.org/careswork/countryprofiles/61.asp (donation link is in the name itself.)

Catholic Relieft Services – From an email:

Please add Catholic Relief Services to the list of organizations responding in Haiti. CRS has already committed to a $5 million emergency response, and its 300 staff in Haiti are well-positioned to commence immediate relief activities. CRS works with many local partner organizations in Haiti. Website: www.crs.org

Caritas Internationalis – From the email and website:

Caritas Internationalis always gets primary aid and medical workers on the ground very rapidly as it has a large network of charities and sister organizations. Caritas has been unable to contact its staff in the capital, although CRS has report the CRS office is intact and the staff present there at the time of the quake are safe. Please pray for the safety of all our staff and all the people of Haiti. An international emergency response team is deploying in Haiti, including Caritas Internationalis Communications Officer Michelle Hough.

Chuck Simmins also has this blog - http://northshorejournal.org/haiti-earthquake-aid - of coverage of the Haiti Earthquake Disaster and where to donate, including any organizations that may not be listed here.

Compassion International – From email:

Compassion International is already established in the Haiti, with Nationals in position to distribute aid. Take a look at their web site at Compassion.com They are a highly rated child advocacy ministry. They would be a good addition to your list.

Direct Relief International – From email:

Direct Relief International is aiding Haiti. They have a fantastic record of supplying medical supplies and aid.  (Based in Santa Barbara.)  

Doctors without Borders – Updated web page to reflect their Haiti assistance efforts.

Faith In Action International  - Founded in 1997 by Tom Braak, Faith in Action International is a Christian, grass-roots organization whose goal is to tangibly express God’s love to people living in impoverished communities.

Famine Relief Foundation – From email:

My Name is Pastor Mark Dreibelbis.

My Orphanage is in Citi Soleil, Haiti We are located down by the loading docks in Port Au Prince.

We are 7 miles from the epicenter of the quake.
We need donations badly!

Our organization is Famine Relief Foundation
The website is:
Faminerelieffoundation.com

Our orphanage is called Mission Ranch Orphanage
We are 501c3 here in the states and a registered NGO in Haiti.

Please get us on the donation list we need immediate help.

In His service

Pastor Mark Dreibelbis
President
Famine Relief Foundation
Mission Ranch Orphanage

Habitat for Humanity – HFH has a special Haiti page. They’re seeking financial support.

HaitiArise - HaitiArise has provided education and relief for the past six years. It’s a registered Canadian charity and reports that 100 percent of donated funds go directly to Haiti.

Haiti Emergency Relief Fund – by Vanguard Public Foundation in San Francisco. Established for Haiti before the Earthquake.

International Medical Corps – From their website:

 

International Medical Corps’ Emergency Response Team is on the way to Haiti, focusing on providing lifesaving medical care and relief to survivors of this devastating earthquake.

Islamic Relief – Islamic Relief has launched an appeal for £1 million to respond to the disaster.

Life In Haiti – Founded in 2007 by R.J. (Bob) Davisson. They have a school in Chabin and report they’re providing education to 400 children.

Life For The World - From an email:

My friends and my chldren at my orphanage and school are in deep trouble in Haiti. Eight years ago I built an orphanage and school in Source Matelas, Haiti called Maranatha Orphanage and School. We have 150+ children. We also feed thousands of the poor and befriend Haitians in Bon Repo and Port Au Prince. I personally know thousands of people that have been devastated by this disaster.

I am an American and you can go to our website at www.lifefortheworld.com and click on the lower right hand side to see the 50+ videos I have posted of our work and you will see me in at least half of them doing the work of feeding the poor in Port au prince and at our orphanage. We are seeking donations on our website to help the displaced with food, shelter and other necessities in the distressed areas of Port au Prince. You can also check out our facebook by searching facebook at “lifefortheworld”.

Thank you for your support of our distressed brothers and sisters in Haiti!

Lutheran World Relief – From the website:

 

Lutheran World Relief is responding to the affected communities through its partners on the ground in Haiti. The coming days are critical as teams dispatch to Haiti to conduct search and rescue efforts. LWR anticipates a large response. Every dollar donated to this life-saving effort is critical to providing the necessary emergency support to the people of Haiti.


Merlin-USA – From an email:

In the aftermath of a massive earthquake that hit Haiti last night, Merlin has launched an emergency appeal to bring urgent humanitarian aid and assistance to those affected. Early reports suggest many buildings have sustained massive damage, including hospitals. Port-au-Prince and the surrounding area is very densely populated and millions of people have been affected. Merlin is assembling a team to assess the damage and health needs in the disaster zone. The team will arrive in Haiti on tomorrow, January 14th. Their first task will be to assess the most urgent medical needs, likely to be water, sanitation, shelter and disease prevention…Our initial fundraising target is $500,000 which will cover one month of the emergency response.

Mercy Corps - Mercy Corps’ website is devoted to the Haiti Earthquake Disaster; they’re deploying a team bound for Haiti now.

Mountain Top Ministries – Based in Chicago, they’re organizing a medical team to go to Haiti.

Operation Blessing International – Operation Blessing International, the 7th largest international charity, has disaster relief teams on the ground and more en route. They are currently assessing the damage and beginning relief efforts.

Oxfam-America – From an email:


Has a Haiti Earthquake Response Fund. I choose them because they already had people in Haiti working on programs and created the donation link on their website within 2 hours.

Partners in Health – You can use the drop-down menu to specify donations to Haiti.

Real Help for Haiti – From the website:

The missionaries of RHFH count it an honor and a priviledge to serve the Haitian people. We trust as you prayerfully consider how to support what God is doing among the Haitian people, you too will see the beauty of the Haitians and be challanged and changed as well.

Sirona CaresHas a trip scheduled for next Tuesday.  Michelle Lacourciere’s the Director. You can contact her at the link to the blog.  The blog itself features posts on Haiti efforts and stories before the Earthquake struck.

The Salvation Army – The Salvation Army is active and on the ground in Haiti.  A representative was just on CNN’s Larry King tonight.


Three Angels Children’s Relief – Reportedly has a school and medical clinic in Petionville. 

Touch Ministries -  Recommended but no Haiti-specific page or announcement as of this writing.  

Yele Haiti – Wyclef Jean’s Haiti initiative to assist his native Haiti.

UNICEF - UNICEF has set up a special page for donations for the children of Haiti. In an email, UNICEF’s Alissa Pinck reports: “UNICEF’s country office in Haiti and the regional office located in Panama is on the ground and have already deployed emergency teams to assess the situation and determine what the additional emergency needs are for the people of Haiti.”

What If Foundation – From the email:

I read your entry regarding Haitian aid donations; the What If? foundation is heavily involved with a feeding and education program for children in St Clare parish. As of the last report they have not been able to reach their contacts but continue to try, and will doubtless be active in assisting the people affected by this disaster. Please view their website at www.whatiffoundation.org and consider including them on your list.

William J. Clinton Foundation – From an email and the website:



My UN office and the rest of the UN system are monitoring the situation. While we don’t yet know the full impact of this 7.0-magnitude earthquake, we do know that the survivors need immediate help. There’s a way you can help Haiti recover and rebuild right now. (The link takes you to a special page for Haiti relief.)

World Vision – Has a Haiti-specific page with a range of donation levels.  The organization says they’re on the ground in Haiti already.


2010 Real Estate Economic Forecast

December 16, 2009

Below please find the latest forecast for the Real Estate Market for next year as well as the ending economic numbers for this year.  There is a lot of promise that we have seen the worst and are heading out of this horrendous recession.

In all, 4.4 million Americans look to take advantage of the home buyer tax credit before it expires by the middle of next year. From the enactment in February of this year through October, NAR estimates 1.8 million households would have qualified to claim the first-time home buyer tax credit. Now with the tax credit deadline extended till the end of June 2010 (for closings, with contracts signed by the end of April, 2010) and also available to many move-up buyers, an additional 2.6 million families would likely claim the home buyer tax credit.

The expected boost to existing home sales by more than 20 percent in the first half of 2010 from comparable period one year before will sufficiently trim away inventory such that home values will begin to show increases by the middle of next year in many parts of the country. The median existing home price could rise by 2 to 4 percent in 2010. New home sales could jump by nearly 50 percent, though from very depressed levels to figures that would be less than half the pace as during the peak sales year in 2005.

One assumption underlying the home sales forecast is that the mortgage rates will continue to remain at near historically low around 5 percent and not more than 5.5 percent. Meanwhile, the unemployment rate is projected to stay high at slightly above 10 percent through the first half of next year, before steadily inching down. Another assumption is that the economy as measured by the GDP continues to expand at nearly 3 percent, thereby laying the foundation for eventual consistent net job gains sometime in the spring of next year.

There was indeed good news on the job front. In November, payroll jobs were reduced by only 11,000. Of course, job cuts are bad, but the momentum of fewer layoffs with each passing month is clearly positive news. Consider this: job cuts averaged 688,000 per month in the first quarter, 512,000 per month in the second quarter, 288,000 per month in the third quarter, and 111,000 in October. In the construction sector, the job loss in November was 27,000, but the pace of cuts has also been diminishing.

The average hours worked by an employee rose in November as well, implying more full-time hours over part-time. Moreover, employment information from households and not from established companies suggests a net job addition. A total of 227,000 jobs were added when based on household survey, thereby nudging the unemployment rate lower to 10.0 percent in November from 10.2 percent in the prior month. Usually, many start-up companies and consultancy jobs are not counted in the company survey data, which explains for the differences between household and company surveys on jobs. So as long as the job momentum moves for the better, the housing market forecast of 20 percent higher sales and stabilizing home values should hold up. An improving housing market and the very important development of home values and housing wealth stabilization will in turn better stimulate economic recovery.

Not all markets are equal, however. Detroit is hemorrhaging with 17 percent unemployment rate. The Washington D.C. area is buffered from so much government spending with the jobless rate at only 6 percent. Even if a bridge is built in Alaska, somehow jobs get created in D.C. Something right is being done in North Dakota with labor shortages and a state budget surplus. Bismark and Fargo have exceptionally low unemployment rates of only 3 percent.

On interest rates, the borrowing rate for a home purchase and refinance on a primary home has never been lower than it is now. The average rate on a 30-year fixed rate mortgage was 4.8 percent in early December. The rates will not move lower than this in 2010. All indications in fact point toward higher rates next year. The Federal Reserve could end the purchase of mortgage-backed securities (MBS) in March as currently scheduled, though my guess is that MBS purchases will continue for a bit further, though less aggressively. Even in the absence of the Fed’s MBS purchase, mortgage rates will not suddenly rise to alarming levels. At most, mortgage rates will rise to the high fives (5.6 to 5.8 percent). Given global financial market inter-linkages, we need to be mindful that the Australian central bank has already begun to raise its rates and Canada is looking to do the same very soon. The European central bank, though not planning on raising interest rates anytime soon, indicated it is looking to stop its quantitative easing policy and possibly move in reverse very soon. That means that, rather than the central bank buying government and private market bonds out of newly printed money, it plans to mop up excessive cash floating in the system to assure inflation does not suddenly pop out of the bottle. With these developments, the U.S. Federal Reserve will surely have to raise its fed funds rate sometime in the second half of 2010 and stop the purchase of private bonds, including MBSs. Otherwise, the dollar will lose its ground to other currencies and steadily cut into our standard of living here at home.

The very high federal budget deficits could also do us in. After an all-time high of $1.4 trillion in budget deficit in the fiscal year 2009, another trillion dollar deficit is on the card for 2010 and near trillion in 2011 and 2012. A big factor in lessening the deficit is how the economy grows. If the economy expands and leads to robust job creation, then the deficit will be lower than projected. If the economy hits many speed bumps along the way then the deficit will get quite ugly. Therefore, a way to get out of the deficit jam is to promote policies leading to economic growth. But unfortunately, the high deficit could also put focus on ways to raise more tax revenue by chipping away at mortgage interest deduction, property tax deduction, and capital gains tax exclusion on primary residence. This discussion could come alive in 2010 and if it does surface NAR will vigorously defend homeownership policies that have been the very foundation of stable middle-class based democracy, civic participation, and long-term middle class wealth accumulation. Any housing policy leading to unsuccessful homeownership (such as the ones associated with the recent housing bust and foreclosures) should be dropped. But policies that promote responsible and sustainable homeownership have incalculable societal benefits and must be defended. In addition, given that homeowners already pay nearly 90 percent of all federal income taxes, trying to extract more out of homeowners will in the end be counter-productive economically and politically.

Bobbie Files
Your Bristol and Plymouth County Realtor
508-238-5000 x.296  Office
508-521-9480  Direct
888-570-9907  Toll Free Direct Fax
bobbiefiles@kw.com Email

Visit my website at www.BerkleyMass.com

Search for Berkley Ma Homes at: http://BerkleyHomes.BerkleyMass.com Search for Taunton Ma Homes at: http://TauntonHomes.BerkleyMass.com

For those struggling to pay your mortgage payments please visit: http://shortsales.berkleymass.com

ARE YOU INTERESTED IN PURCHASING ONE OF THE INCREDIBLE FORECLOSURE BUYS ON THE MARKET???
VISIT –
http://JustForeclosures.BerkleyMass.com

Copyright National Association of REALTORS®, Reprinted with permission


Are you looking to buy?? You may want to act NOW!!

December 10, 2009

fha-changes

 

Our President and Congressmen and Senators  have been touting how the original and now extended (and expanded) first time home buyer federal tax credit has been helping the housing market and overall economy. Yet, now (and on the sly), they’re trying to pass legislation that will make it harder for home buyers both first and repeat to buy a home.

“You have to be kidding me, Bobbie?!?! The Government wouldn’t give money to buyers to increase home buying and then pass legislation that will decrease the number of buyers who can buy.  That would be just plain stupid!”

Yes, that is exactly what they are planning.

This is what they are proposing:

H.R. 3706 – The FHA Taxpayer Protection Act of 2009 was referred to the House Committee on Financial Services on October 1, 2009. This bill would require borrowers with FHA insured mortgages to make down payments of at least 5 percent of the purchase price and would prohibit rolling closing costs into the loan.

Currently, the minimum FHA down payment is 3.5 percent of the purchase price and closing costs can be rolled into an FHA loan.

In addition, the Secretary of Housing & Urban Development, Shaun Donovan on Wednesday outlined further plans to make sure FHA home buyers had more at stake and to put more money in the FHA’s reserves, which are extremely low at the moment.

Here are the highlights of the FHA policy proposal:

  • Reduce the maximum allowable seller concessions from 6 percent of sales price to 3 percent
  • Raise the minimum FICO score (aka credit score) required to qualify for an FHA loan from 620 to 640 (or more)
  • Increase the up-front cash that a borrower has to bring to the table in an FHA backed loan
  • Increase in the up-front mortgage insurance premium a buyer is required to pay
  • Ask Congress to raise the annual mortgage premium a FHA buyer has to pay

And here’s a scariest fact of all… The FHA can make most of these changes on their own with no additional authority or legislation required. Donovan claims that they will provide detail and public guidance for these changes by the end of January.

These are ONLY proposals at this point but unfortunately we are expecting it to pass.

If you are in the market to purchase and are or will be using an FHA insured loan than my best advice is to buy now!!!!

Bobbie Files
Your Bristol and Plymouth County Realtor
508-238-5000 x.296  Office
508-521-9480  Direct
888-570-9907  Toll Free Direct Fax
bobbiefiles@kw.com Email

Visit my website at www.BerkleyMass.com

Search for Berkley Ma Homes at: http://BerkleyHomes.BerkleyMass.com

Search for Taunton Ma Homes at: http://TauntonHomes.BerkleyMass.com

For those struggling to pay your mortgage payments please visit: http://shortsales.berkleymass.com

ARE YOU INTERESTED IN PURCHASING ONE OF THE INCREDIBLE FORECLOSURE BUYS ON THE MARKET???
VISIT – http://JustForeclosures.BerkleyMass.com


The NEWEST Short Sale Guidelines

December 3, 2009

The Obama administration laid out final guidelines on Monday that should make it easier for some financially troubled borrowers to sell their homes.

The guidelines are designed to encourage the use of short sales, transactions in which the borrower with lender approval sells the home for less than what is owed on the loan. The program also makes it easier for borrowers to voluntarily transfer ownership of properties through a “deed in lieu of foreclosure.”

Short sales can result in higher prices than foreclosures and can be less damaging to local neighborhoods, in part because homes aren’t left vacant and exposed to vandalism. But these transactions are often difficult to complete.

Under the plan, borrowers will receive $1,500 from the government if they sell their homes for less than the amount of their mortgages. Mortgage-servicing companies will also receive $1,000 for each completed short sale. The program is open to borrowers who may be eligible for the government’s loan-modification program, but don’t end up qualifying, or are delinquent on their modification, or request a short sale or deed-in-lieu transaction.

Related
Read a full copy of the guidelines.

The short-sale program is the latest addition to the Obama administration’s $75 billion foreclosure-prevention plan, which includes incentives for mortgage companies and investors to rework troubled loans. The government first said in May that it would include short sales in the program, but it has taken months to finalize the details.

Under the new guidelines, second-mortgage holders can receive up to $3,000 of the sales proceeds in exchange for releasing their liens. Investors who hold the first mortgages, meanwhile, can collect up to $1,000 from the government for allowing such payments.

Borrowers who complete a short sale under the program must be “fully released” from future liability for the debt, according to the guidelines.

Printed in The Wall Street Journal, page A6


Are you considering making an offer to purchase on a Short Sale?

November 21, 2009

Are you looking to buy a new home? Are you thinking that now’s a great time to find bargains? Before you make an offer, it pays to know a little about the seller’s situation.

If a home is being sold for below what the current seller owes on the property—and the seller does not have other funds to make up the difference at closing—the sale is considered a short sale. Many more home owners are finding themselves in this situation due to a number of factors, including job losses, aggressive borrowing against their home in the days of easy credit, and declining home values in a slower real estate market.

A short sale is different from a foreclosure, which is when the seller’s lender has taken title of the home and is selling it directly. Homeowners often try to accomplish a short sale in order to avoid foreclosure. But a short sale holds many potential pitfalls for buyers. Know the risks before you pursue a short-sale purchase.

You’re a good candidate for a short-sale purchase if:

  • You’re very patient. Even after you come to agreement with the seller to buy a short-sale property,  (REMEMBER the seller STILL OWNS the home so the SELLER negotiates and accepts the offer) the seller’s lender (or lenders, if there is more than one mortgage) has to approve the sale before you can close. I highlighted approve as it is a popular misconception that the lender accepts the offer, the homeowner accepts the offer and the bank approves the price and terms of the short sale.  When there is only one mortgage,  lender approval typically (with most banks but can take much longer with some lenders) takes about two  to three months. If there is more than one mortgage with different lenders, it can take four months or longer for the lenders to approve the sale.
  • Your financing is in order. Lenders like cash offers. But even if you can’t pay all cash for a short-sale property, it’s important to show you are well qualified and your financing is set. If you’re preapproved, have a large down payment, and can close at any time, your offer will be viewed more favorably than that of a buyer whose financing is less secure.
  • You don’t have any contingencies. If you have a home to sell before you can close on the purchase of the short-sale property—or you need to be in your new home by a certain time—a short sale may not be for you. Lenders like no-contingency offers and flexible closing terms.

If you’re serious about purchasing a short-sale property, it’s important for you to have expert assistance. Here are some people you want to work with:

  • Experienced real estate attorney. Only about two out of five short sales are approved by lenders. But a good real estate attorney who’s knowledgeable about the short-sale process will increase your chances getting an approved contract. Also, if you want any provisions or very specialized language written into the purchase contract, a real estate attorney is essential throughout the negotiation.
  • A qualified real estate professional.* You may have a close friend or relative in real estate, but if that person doesn’t know anything about short sales, working with him or her may hurt your chances of a successful closing. Interview a few practitioners and ask them how many buyers they’ve represented in a short sale and, of those, how many have successfully closed. A qualified real estate professional will be able to show you short-sale homes, help negotiate the purchase when you find the property you want to buy, and smooth communications with the lender. (All MLSs permit, and some now require, special notations to indicate that a listing is a short sale. There also are certain phrases you can watch for, such as “lender approval required.”)

Some of the other risks faced by buyers of short-sale properties include:

  • Potential for rejection. Lenders want to minimize their losses as much as possible. If you make an offer tremendously lower than the fair market value of the home, chances are that your offer will be rejected and you’ll have wasted months. Or the lender could make a counteroffer, which will lengthen the process.
  • Bad terms. Even when a lender approves a short sale, it could require that the sellers sign a promissory note to repay the deficient amount of the loan, which may not be acceptable to some financially desperate sellers. In that case, the sellers may refuse to go through with the short sale. Lenders also can change any of the terms of the contract that you’ve already negotiated, which may not be agreeable to you.
  • No repairs or repair credits. You will most likely be asked to take the property “as is.” Lenders are already taking a loss on the property and may not agree to requests for repair credits.

The risks of a short sale are considerable. But if you have the time, patience, and iron will to see it through, a short sale can be a win-win for you and the sellers.

For more Short Sale information please visit http://shortsales.berkleymass.com