Tag Archives: short sale

Congress could play Grinch this Christmas for homeowners

Could it be a grim and Grinchy December for thousands of homeowners facing ongoing challenges with their mortgage payments and property values? Could popular deductions for mortgage insurance premiums and energy-efficient home improvements abruptly vanish?

That’s the way things are shaping up in the closing weeks of the post-election lame duck congressional session. Republicans controlling the tax-writing committees in the House and Senate say they have no plans to extend expiring tax code provisions such as mortgage debt forgiveness for financially troubled owners; mortgage insurance write-offs used by moderate-income first-time buyers; and deductions for purchases of energy-saving windows, insulation and other improvements.

All three benefits terminate Dec. 31. Unlike previous years, when Congress extended them, this year is different. There is strong sentiment, especially in the House, that a comprehensive overhaul and simplification of the tax code should be the priority, rather than piecemeal, end-of-the-year extensions of special-interest provisions that complicate that objective.

The failure to pass so-called extenders would be especially painful for large numbers of underwater owners who are unable to complete short sales, loan modifications or foreclosures before year-end. Many of them could face crushing tax demands from the IRS — or be forced to declare insolvency or file for bankruptcy.

Under the federal tax code, when a creditor cancels a taxpayer’s debt, the IRS treats the amount forgiven as income, taxable at ordinary rates. But in 2007, as foreclosures and short sales began to explode across the country, Congress enacted a temporary exemption for homeowners who received cancellations of mortgage debt as part of their loan modification deals with lenders. That exception has been extended periodically by Congress ever since.

read more at: http://www.chicagotribune.com/classified/realestate/ct-re-1127-kenneth-harney-column-20161122-column.html

 

Marketing Tool – Taking Over a Seller’s Loan

Homeowners with a mortgage insured by the Federal Housing Administration or the Department of Veterans Affairs should consider using their loan terms as a marketing tool when it comes time to sell.

Mortgage loans from both government agencies include a little-known feature known as assumability. In other words, the buyer of a home financed with an existing F.H.A. or V.A. loan may be able to take over, or assume, the seller’s loan, under the same terms, rather than take out a new mortgage.

Contact the appraisers at www.scappraisals.com they have VA and FHA certified appraisers that can answer your appraisal questions.

During periods when interest rates are rising, homes offered for sale with an assumable, lower-rate mortgage may have extra appeal for certain buyers.

“You could now have a seller saying, ‘I have a great house to sell you and a great mortgage to go with it, which is better than my neighbor, who only has a great house,’ ” said Marc Israel, an executive vice president of Kensington Vanguard National Land Services and a real estate lawyer. “It’s a very clever idea.”

The savings for buyers assuming a loan extend beyond a lower interest rate. Assuming a loan is cheaper than applying for a new one because there are fewer settlement fees. An appraisal is not required (though a buyer may want to obtain one anyway). And in New York, borrowers assuming a loan do not have to pay the hefty mortgage recording tax a second time, Mr. Israel said.

Read more at: http://www.nytimes.com/2013/09/22/realestate/taking-over-a-sellers-loan.html?_r=0&adxnnl=1&ref=realestate&adxnnlx=1379780189-lYijZBwT98cqscrTA/oVkw

Disclaimer: for information and entertainment purposes only

Short Sale Pitfalls

As thousands of would-be buyers have discovered, short sales can be a long shot.

Though selling houses for less than the amount owed on the mortgage has become commonplace, accounting for the lion’s share of transactions in many markets, such sales are fraught with complications that can short-circuit the deal. There are no, uh, shortcuts.

Here, courtesy of members of the National Association of Exclusive Buyer Agents, is a short summary of the ways in which a short-sale purchase can be derailed:

Often the house is not advertised as a short sale. That’s like advertising a house that is not really for sale, because the seller does not have the authority to sell the house at the advertised price, says the Phoenix-based association, whose members work only on behalf of buyers.

The negotiating process is far different in that the seller may not care how much is being offered since he won’t be taking any money from the sale. The seller may be so anxious to get away from his underwater mortgage that he’ll accept just about any offer. But the bank has the final say.

Many lenders will not even discuss a short sale with a seller until a purchase contract is in place. That means the buyer who makes the first offer is a guinea pig, because nobody knows whether the lender will even accept a short-sale offer.

Short sales are sometimes listed at a “ridiculously low price” just to get the ball rolling, the association warns. Similarly, a seller may agree to any offer, no matter how low and no matter whether it has a snowball’s chance of being accepted by the bank, just so he can begin negotiations with the lender.

Read more at: http://www.chicagotribune.com/classified/realestate/foreclosure/sc-cons-1115-short-sales-20121115,0,7838703.story

Disclaimer: For information and entertainment purposes only