Archive for the ‘Finance and Lending’ Category
HR 5830: The FHA Housing Stabilization & Homeownership Retention Act
On April 17, 2008, Rep. Barney Frank introduced in the House a bill that would enable the FHA to refinance home loans at 90% of current market value with the goal of keeping more home owners in their homes. I will track this bill through the House and Senate as I did with the Mortgage Forgiveness Debt Relief Act of 2007.
In essence, this would provide for a government guaranteed short refinance, where, like a short sale, the lender on the distressed loan takes less than is owed. I will post my analysis of the bill in a future post.
Here is the full text of the bill:
Short Sale and Phantom Tax Debt Relief Overview
Lots of questions have arisen from people since President Bush signed into law the Mortgage Forgiveness Debt Relief Act of 2007, whereby in certain circumstances, a homeowner does not have to pay federal income tax on debt forgiven on a loan secured by a qualified principal residence via a short sale, foreclosure, deed in lieu, loan workout or short refinance where the loan amount was reduced and forgiven in order for the homeowner to keep the property.
Bush Signs Mortgage Debt Forgiveness Act
With a stroke of the pen, President Bush signed into law H.R. 3648, The Mortgage Debt Relief Act of 2007, and dramatically changed the lives of homeowners across the country who are facing foreclosure, considering a short sale, negotiating a loan workout, or have done any of these since January 1, 2007.
While this bill has been long awaited by homeowners who would be penalized by the potential phantom tax, and real estate agents praying that it will open the flood gates to more business via short sale listings, the goal of the Administration and legislators is to reduce the number of foreclosures and the need for short sales by allowing homeowners to renegotiate their loans without tax consequences.
Mortgage Debt Forgiveness Passed by Senate
UPDATE: President Bush signs HR 3648, The Mortgage Forgiveness Debt Relief Act of 2007.
It took them close to two and half months, but the U.S. Senate finally got around to passing H.R. 3648, The Mortgage Forgiveness Debt Relief Act of 2007. Initially sent to the Senate on October 4th, the Senate passed this legislation on Friday, December 14th, allowing Senate Finance Committee Chairman Max Baucus to crow a bit about helping the U.S. homeowner dealing with foreclosure or a short sale.
Short Sales, Taxes and the IRS
UPDATE: 12/20/2007 - President Bush signs The Mortgage Forgiveness Debt Relief Act of 2007
UPDATE: 12/14/2007 - Senate Passes Mortgage Forgiveness Debt Relief Bill
Given the current state of the San Diego real estate market, it is no surprise that the most frequently asked question we get revolves around the potential tax consequences of a short sale. A short sale occurs when a property is sold for less than what is needed to pay off any loans on the property. When this debt is cancelled, the lender’s obligation by law is to file a 1099-C with the Internal Revenue Service.
San Diego Foreclosure Bargains - Fact or Fiction?
The most common "I want a killer deal" inquiry I get are from those looking for foreclosure property in San Diego - at 50 cents on the dollar. After all, it is a buyer market, sellers are desperate, and foreclosures almost out number real estate agents right?
Well… not quite. But how about $90,000 under market, when the market is was $399,000 based on identical units selling just two days earlier?
Citi to California Home Buyers: Just Say No
Times, they are a changin’ in the California mortgage business.
Last week we had Bank of America notify 7,000 mortgage brokers that their services will no longer be needed after New Years Eve, only to have Citi take it one step further on Halloween and tell California home buyers, "Thanks, but no thanks".
Bank of America To Cut Off Mortgage Brokers
Ken Lewis, CEO of Bank of America, the nation’s second-largest bank, announced on Friday that it will shut down its consumer real estate division and its wholesale lending unit, which offers residential mortgages through over 7,000 independent brokers, at the end of the year.
The move signals a commitment to focus on direct-to-consumer lending through its banking centers and loan officers, said Floyd Robinson, Bank of America’s president of consumer real estate and insurance services. “While we are extremely proud of our strong track record in the wholesale business, we believe our long-term opportunity lies in maximizing our more competitive retail channels.”
House Passes Mortgage Forgiveness Debt Relief
Many San Diego homeowners considering a short sale or facing foreclosure got a bit of good news today with the U.S. House of Representatives passing H.R. 3648, The Mortgage Forgiveness Debt Relief Act of 2007. The bill addresses the forgiveness of acquisition debt, which is that debt used to purchase real estate that is used as a primary residence. This debt forgiveness due to a short sale or foreclosure would not be subject to taxation as earned income. The bill now goes to the Senate.
The bill saw a few modifications from it’s original version approved by the House Ways and Means Committee.
UPDATE: 12/14/2007 - Senate passes H.R. 3648, The Mortgage Forgiveness Debt Relief Act of 2007.
UPDATE: President Bush signs The Mortgage Forgiveness Debt Relief Act of 2007.
Overview of debt forgiveness portion of bill: Short Sale and Phantom Tax Debt Relief Overview
Mortgage Forgiveness Debt Relief On The Fast Track
Someone lit a fire under Rep. Charles "Charlie" Rangel, which is good news for the San Diego real estate market in general, and many homeowners trying to determine the lesser of two evils, foreclosure or a short sale and the tax liability which goes with it.
