Foreclosures Help Information

Posts Tagged ‘reference’

Tax Foreclosure Properties In California

Question: What are the consequences for a foreclosure in California?

I know I will have bad credit for 5-7 years, but what other penalties or issues can I face? My house value has gone so far down that I’d rather just save the mortgage and property tax money and just pay off my credit card debt and what not and start fresh.

>

Answer: In California you have 120 days from the time the "Notice Of Default" is filed until the "Trustee Sale" takes place. You can legally live in the property that entire time and not pay any money. I'd suggest staying in the property and save as much of the house payment money so that you can rent a home at the end of the 120 days. Some foreclosing lenders will even offer a cash payment to the resident as an incentive to getting out without having to go through the eviction process after the foreclosure or even before. That eviction process can last 30-60 additional days after the Trustee Sale.

The owner of the property has 90 days after the Notice of Default is filed to make up (reinstate) all the back payments and legal/foreclosure fees. After that the lender can then demand the entire balance owned on the note to be paid in full in order to keep the property from being foreclosed on.

Point is, that the only real penalty that you face is the foreclosure itself and the resulting bad credit blemish. You will not owe a dime of taxes because of the Foreclosure Tax Relief Act of 2007 and the The Foreclosure Prevention Act of 2008 (S. 2636) .

If you have reasonably good credit, other than the foreclosure, very few property managers/landlords will hold that against you when you go looking for a new place to live. Fact is, I know that there is a good chance that these people will live in the property for a longer time than most because they won't be buying again for several years. I welcome these people as tenants. My average tenant stays in the property for at least 3 years.

Secret Foreclosures hidden in Tax Lien lists and tax sales

Foreclosure Law Nj

The climate of the subprime mortgage era and its loose lending guidelines are long behind us.

The subprime lending practices have left many homeowners on the brink of foreclosure due to risky ARM mortgage loans written between 2002-2006. The government recently started a rescue package bailing out insolvent banks. In this package there is a provision for these bank and hedge companies to place a moratorium on subprime mortgage foreclosures. This is mutually beneficial for the bank and the homeowner. The bank will see less losses due to foreclosure proceedings,and property values in return will eventually stabilize. The Hope Now program recently passed in government mandates that the lenders that got us into this mess, are to work with borrowers to curtail any further losses for the bank in foreclosure. This is great news for the struggling homeowner in forclosure. The lender is now, more than ever, willing to modify your mortgage(loan modification) to keep you in your home and agree on a reasonable monthly payment. You must be able to demonstrate a reasonable ability to pay, but a loan modification is about keeping you in your home.

Foreclosures are costly for neighborhoods and for banks. Foreclosure involves attorney retainers for 1000’s of loans on a banks books that could benefit from a loan modification. Some of these properties that could benefit from a loan modification have little or no remaining equity. A loan modification is a better alternative that a short sale for the homeowner and the bank. (SHORT SALE: Is where the borrower sells the property for less than the mortgage balance) A Short sale drives a neighborhood price down, the only person who benefits is the investor that buys the property via short sale. Your neighbors suffer a lower property value, The bank sustains losses, and you still have to leave your home with no money to rebuild after a significant set back. If the bank does a loan modification, gives you a more affordable payment, they lose potential interest gain. The bank secures interest and principal and you secure your home. The most costly proposition is a consummated foreclosure.

The bank does not want your home. The bank with do a loan modification if you or your attorney supervised counselor communicates with them.  The first step and first advantage of having a representative petition your mortgage servicer is the loan document audit. This is something that involves a knowledge of apr calculations,state fee thresholds,compliance regulations,and RESPA. The average homeowner is not aware that what the mortgage company did is illegal. We are seeing staggering numbers of TIL,RESPA violations. The predatory lending laws that are state specific have been the main culprit second to TIL (Truth In Lending Act) violations.

The lender is required to disclose the APR in the TIL. The lender that is in violation knows that litigation may be imminent if they don’t do a loan modification for a borrower in trouble. A loan modification needs to explain the reason for financial hardship. The lender will want to see that by modifying the loan you have the means to support the modified payment. A loan modification is not an interim solution. It is a long term conversion for an ARM to a lower,affordable monthly payment without closing costs.

If you or a loved one are facing foreclosure or fear you may not be able to make your next mortgage payment, you need to call me for a free consultation.

The longer you delay the further you become from HOPE NOW.

About the Author:

Shawn Peck is an active approved loan modification specialist. Mr. Peck has spent 10 years working with Chapter 13 debtors as a home loan modification specialist.Mr Peck works in tandem with attorneys who handle all apects of preparing forensic TILA,RESPA loan audits for his office. Mr. Peck has succesfully modified many mortgages notes on behalf of his clients in partnership with HUD’s Hope Now.
go to
www.learnloanmodsnow.com
for more info.
email the author
speck@learnloanmodsnow.com

Source – Hope Now Loan Modifications,loan Modification as a Chapter 13 Buyout Alternative

Foreclosure

Tax Foreclosure Sales Michigan

Investing in real estate provides ample benefits, ranging from passive income from rental properties to long-term value appreciation. However, another significant benefit of investing in Detroit real estate is the tax benefits, especially for those earners who fall into the high-income tax bracket.

Investing in Detroit Michigan real estate saves you extensively on your taxes – giving you the opportunity to use the saved taxes on more fruitful investments, or simply as an addition to your savings account.

The value of depreciation

For many investors in Detroit real estate, the most powerful tax incentive stems from depreciation. In fact, the IRS requires that all investors depreciate the value their investment properties, thus giving you a strong tax benefit.

Depreciation is a capital loss that you take on paper, which accounts for the wear and tear of the home, as well as any built-in obsolesce. However, keep in mind that the value of the land itself cannot be depreciated. Only the building structure on the property itself can be depreciable. Subsequently, as condominiums and town homes do not have any land value, the entire value of the Detroit investment property can be depreciated.

For a residential Detroit real estate investment, you can depreciate the value of the property over 27.5 years. For commercial Detroit real estate, the depreciation is calculated over 39 years.

Categorization as a “real estate professional”

If the IRS categorizes you as a “real estate professional,” which means that you invest 750 hours annually towards your Detroit investment properties, you have even greater tax benefits. In fact, if you invest this type of time, along with full participation in the management of your Detroit investment properties, then you have almost limitless tax deductions from your income taxes.

However, if you are not a “real estate professional” for your Detroit real estate, then the maximum you can deduct is $25,000 from your ordinary taxable income. However, keep in mind that this includes the depreciation value as well. In addition, should your annual income surpass $100,000, and you are not a “real estate professional,” then the $25,000 deduction begins to phase out, and after $150,000 in income, you are not subject to any deduction.

Nonetheless, you can still qualify as a “real estate professional” simply by hiring a property manager. You just need to make the major decisions, such as setting rents, interviewing tenants, and managing major expenses. However, you do not need to manage the day-to-day operating details. For the nearly unlimited tax expense deduction, this small effort may prove to be significantly worthwhile.

Value of a 1031 Exchange

Detroit real estate investments provide interesting tax benefits that are not matched by any other type of investment instrument. The 1031 Exchange allows any investor to sell a property, and then invest those proceeds into another similar asset. When this occurs, you can defer your capital gains tax.

As long as you invest your sales funds into another similar asset, you do not incur any capital gains or losses – and no other type of investment instrument can provide you with that type of tax benefit.

Deductions in Interest Expense

Another tax benefit to Detroit investment properties stems from your deduction of tax expenses. If you take on a mortgage for your Detroit real estate, then you can deduct the taxes you paid for this investment – saving you potentially tens of thousands a year in tax deductions.

Purchasing Detroit MI real estate provides ample opportunities, not only in passive rental income, “free equity” from renters, and long-term appreciation, but also significant tax benefits that can save you tens of thousands annually. No other type of investment can live up to those benefits.

About the Author:

Urban Detroit Wholesalers is dedicated to upgrading the value of your Detroit real estate portfolio. Read our market analysis, current news, and pertinent case evaluations of Detroit investment properties.

Source – Reaping the Full Tax Benefits of Detroit Investment Properties

Michigan Foreclosure Report T.V. – Episode 91

Foreclosure Help Bank Of America

Question: San Diego will be a “foreclosure sanctuary”?

http://moneynews.newsmax.com/financenews/bank_of_america/2008/07/23/115615.html

Here’s the link. Apparently, San Diego is sueing lenders to stop foreclosures in their city. Gosh, what do you think this will do to property value and future loan availability?

>

Answer: What a stupid idea! If a bank can't foreclose, no one will pay their mortgages. Why would you?

If a bank can't foreclose on a mortgage, there is no collateral. No collateral means the mortgage is worthless. The banks will have to write off every mortgage in San Diego whether the home owner is making the payments or not. It will be the biggest banking disaster in history.

If the bank can't secure it's collateral there won't be any mortgages and the value of property in San Diego will drop like a rock because no one can get a mortgage to by it.

Bank of America recorded call regarding foreclosure Part 1 of 2

Michigan Tax Foreclosure Auction

In the third quarter of 2006, Detroit real estate suffered more foreclosures than other states; in fact, bank foreclosed on four times as many homes there as compared with the national average.

RealtyTrac is an online foreclosure resource, which documented that Detroit’s mortgage failures were up 43% since 2005.  Some contributing factors have been the steadily rising home prices, as well as the resetting of variable mortgage rates.

Two other cities suffering similar rates of foreclosures were Fort Lauderdale, FL and Denver, Colorado.

During the same time period, among metropolitan cities, Bethesda, Maryland, boasted the lowest foreclosure rate – about one in 5,500 homes, or roughly 1/68th of what was reported for Detroit.

Among cities with high foreclosure rates, only Indianapolis achieved any recovery during that same quarter, slowing just fewer than 3%.

Local dynamics of Detroit economics

The Detroit real estate landscape has been exacerbated by specific regional challenges, such as the local employment market.  Detroit foreclosures followed auto industry layoffs, which continue to be prevalent. 

In early 2007, Michigan’s unemployment rate was 7 percent, the highest in the country, as documented by the Bureau of Labor Statistics.  That rate of joblessness was began around 2003, when Ford made considerable cost cuts and eliminated jobs in its efforts to meet Japanese competition.

Loans carried by “solid” borrowers

Ironically, a higher percentage of Detroit area mortgages are prime loans, made to the most credit-worthy borrowers.  Nearly 80 percent of the loans originated in 2006 were “A paper,” a few points higher than the national average.

Even those homeowners in Detroit who are making timely mortgage payments are feeling the impact of the high foreclosure rate.  As neighbors’ loans default and Detroit REOs rise, prices quickly dropped 10 to 20 percent.  This kind of decline in value can leave homeowners upside down, owing more than the property is worth.

There is a type of “guilt by association.” A whole neighborhood is stigmatized when auction signs and bank foreclosures appear.  The good neighbor, who meets his payments and maintains his property, is nonetheless negatively impacted.

Even on Wildemere Street, an upscale Northwest Detroit neighborhood, there is some adversity.  The two-car garage, Tudor homes sell for twice the city’s median price, yet one fourth of the houses are vacant.  Many of the unoccupied properties display auction or foreclosure signs.

Taking profitable advantage of Detroit foreclosures

While the statistics regarding Detroit real estate seem a bit depressing, from an investor’s point of view, there may be ample opportunity.  The 30th Street area, a couple of miles from City Center, is nearly gutted, with the majority of row houses empty and dilapidated.  To some savvy investors, this bottomed out market phase can be the raw material for rebirth and even capital growth.

In Delray Beach, Florida, for example, builder Frank McKinney bought an entire block of similarly derelict homes on what is now called “Bankers Row.”  Many of the small bungalow style homes were vacant and unsecured.  McKinney applied his skills to renovate and beautify the block with municipal cooperation.  Buying the properties for back taxes, he created a new look to the block, which was then dual-zoned.  Today, Bankers Row is fully occupied by a mix of residential and commercial occupants.  Colorful paint schemes suggest Caribbean charm, and pretty awnings make the little structures seem just a bit larger, with a hint of whimsy.  Similar neighborhood uplifts followed the Bankers Row success story in Delray Beach, converting what were considered dangerous neighborhoods to communities.  Delray does not have an auto industry.  The major source of jobs is hospitality, mainly restaurant and bar services.  But in the case of that Florida city, perhaps the homes brought the people and the jobs.

Can Detroit be the next such revival?  With the severely discounted foreclosures and ample profitable opportunity, the answer may indeed be a resounding yes.

About the Author:

Urban Detroit Wholesalers is dedicated to upgrading the value of your Detroit real estate portfolio. Read our market analysis, current news, and pertinent case evaluations of Detroit investment properties.

Source – Foreclosure Homes for Sale in Detroit

Beginning Investor Seminar (Detroit, MI) – Tax Consequences of Foreclosures