Friday, September 30, 2011
Fixed-Rate Mortgages Lowest on Record
Freddie Mac (OTC: FMCC) released the results of its Primary Mortgage Market Survey (PMMS), coming on the heels of the Federal Reserve's recent announcements. The conventional 30-year fixed averaged an all-time record low at 4.01 percent; likewise the 15-year fixed averaged an all-time record low at 3.28 percent for the week. Of the five regions surveyed in Freddie Mac's survey, the West region recorded the lowest average rate for the 30-year fixed dipping below 4.00 percent to 3.95 percent.
Wednesday, September 28, 2011
New Scam Dupes Homeowners into Fake Loan Audits
More home owners are being tricked into a fake forensic loan audit, a new scam that targets struggling home owners looking for a loan modification to save their home from foreclosure.
Several scam organizations, usually linking themselves to attorney and loan auditors, have popped up in the last 2 years offering forensic loan audits.
In the scam, the organizations claim to review a homeowner’s mortgage loan documents to determine whether their lender had complied with state and federal lending laws. They then promise to get the home owner a quick loan modification and possibly a principal reduction on their mortgage too. Home owners pay an upfront fee usually around $3,000 or even more.
However, home owners say that they aren’t getting a loan modification and usually nothing happens after they pay the upfront money.
They lure homeowners to believe that by hiring them for a review of a loan modification package, they can expedite the process and get better results, or they make false promises that they can get a loan modification and/or principal reduction. Homeowners are not typically getting any results at all. The scammers are just taking the money and disappear.
As always it is always better to deal with your own lender or call a lawyer as opposed to you replying to an unsollicited offer.
Several scam organizations, usually linking themselves to attorney and loan auditors, have popped up in the last 2 years offering forensic loan audits.
In the scam, the organizations claim to review a homeowner’s mortgage loan documents to determine whether their lender had complied with state and federal lending laws. They then promise to get the home owner a quick loan modification and possibly a principal reduction on their mortgage too. Home owners pay an upfront fee usually around $3,000 or even more.
However, home owners say that they aren’t getting a loan modification and usually nothing happens after they pay the upfront money.
They lure homeowners to believe that by hiring them for a review of a loan modification package, they can expedite the process and get better results, or they make false promises that they can get a loan modification and/or principal reduction. Homeowners are not typically getting any results at all. The scammers are just taking the money and disappear.
As always it is always better to deal with your own lender or call a lawyer as opposed to you replying to an unsollicited offer.
Saturday, September 17, 2011
Joke of The Week
Nighttime Prayers
A father put his 3-year old daughter to bed,
told her a story and listened to her prayers which ended by her saying:
"God bless Mommy, God bless Daddy, God bless Grandma and goodbye Grandpa."
The father asked, "Why did you say goodbye Grandpa?"
The little girl said,
"I don't know, Daddy, it just seemed like the thing to do."
The next day grandpa died.
The father thought it was a strange coincidence.
A few months later the father put the girl to bed and
listened to her prayers which went like this:
"God bless Mommy, God Bless Daddy and goodbye Grandma."
The next day the grandmother died.
"Holy Moley, thought the father,
"this kid is in contact with the other-side."
Several weeks later when the girl was going
to bed the dad heard her say:
"God bless Mommy and goodbye Daddy."
He practically went into shock.
He couldn't sleep all night and got up
at the crack of dawn to go to his office.
He was nervous as a cat all day,
had lunch and watched the clock.
He figured if he could get by until midnight he would be okay.
He felt safe in the office,
so instead of going home at the
end of the day he stayed there,
drinking coffee,
looking at his watch
and jumping at every sound.
Finally, midnight arrived,
he breathed a sigh of relief and went home.
When he got home his wife said,
"I've never seen you work so late, what's the matter?"
He said, "I don't want to talk about it,
I've just spent the worst day of my life."
She said, "You think you had a bad day,
you'll never believe what happened to me this morning.
My golf pro dropped dead in the middle of my lesson."
A father put his 3-year old daughter to bed,
told her a story and listened to her prayers which ended by her saying:
"God bless Mommy, God bless Daddy, God bless Grandma and goodbye Grandpa."
The father asked, "Why did you say goodbye Grandpa?"
The little girl said,
"I don't know, Daddy, it just seemed like the thing to do."
The next day grandpa died.
The father thought it was a strange coincidence.
A few months later the father put the girl to bed and
listened to her prayers which went like this:
"God bless Mommy, God Bless Daddy and goodbye Grandma."
The next day the grandmother died.
"Holy Moley, thought the father,
"this kid is in contact with the other-side."
Several weeks later when the girl was going
to bed the dad heard her say:
"God bless Mommy and goodbye Daddy."
He practically went into shock.
He couldn't sleep all night and got up
at the crack of dawn to go to his office.
He was nervous as a cat all day,
had lunch and watched the clock.
He figured if he could get by until midnight he would be okay.
He felt safe in the office,
so instead of going home at the
end of the day he stayed there,
drinking coffee,
looking at his watch
and jumping at every sound.
Finally, midnight arrived,
he breathed a sigh of relief and went home.
When he got home his wife said,
"I've never seen you work so late, what's the matter?"
He said, "I don't want to talk about it,
I've just spent the worst day of my life."
She said, "You think you had a bad day,
you'll never believe what happened to me this morning.
My golf pro dropped dead in the middle of my lesson."
Wednesday, September 14, 2011
Poverty Level Rises to Highest Level Since 1993
More Americans are living in poverty: The number of Americans living in poverty rose to 15.1 percent, its highest level since 1993, the Census Bureau reported Tuesday.
Median household income has fallen 7 percent since 2000 (adjusting for inflation) to $49,445, its lowest since 1996.
The largest drops in incomes were from young professionals and minorities. The median income for black households dropped 3.2 percent to $32,068.
Indeed, the number of households “doubling up” grew from 19.7 million in 2007 to 21.8 million in the spring of 2011, according to Trudi Renwick, the Census Bureau’s chief of poverty statistics.
Meanwhile, the only age group to prosper in the last decade: Americans aged 65 and older. Adjusted for inflation, their household income increased 7.5 percent over the decade, according to U.S. Census data.
States With the Highest Number of Underwater Borrowers
1. Nevada: 60 percent of all properties with a mortgage were considered underwater
2. Arizona: 49%
3. Florida: 45%
4. Michigan: 36%
5. California: 30%
2. Arizona: 49%
3. Florida: 45%
4. Michigan: 36%
5. California: 30%
Thursday, September 1, 2011
Rihanna Lawsuit Says $6.9 Million House Leaked and Prudential California Realty Real Estate Agent Didn't Give Her Comps
Rihanna, born Robyn Fenty, purchased the home in July 2009 for $6.9 million.
According to the suit, during the purchase of the home she was kept in the dark about several problems with the home, problems that came to light following a "moderate rainstorm" in January 2010.
"The rainwater pooled on the second floor balcony ad seeped into numerous rooms of the house, causing extensive water intrusion into various rooms," the suit alleges.
After the flood, the singer hired an engineering firm to assess the damage; during an inspection, the firm found "a host of defects in the property, including numerous waterproofing defects and evidence of water intrusion and associated damage."
Because of the defects, the suit alleges, the actual value of the home is "millions of dollars less" than the $6.9 million she paid.
Rihanna, who alleges professional negligence, negligence, breach of fiduciary duty, fraud, breach of contract and breach of implied warranty, is seeking unspecified damages, plus interest, court costs and attorneys' fees.
Read the full lawsuit here.
According to the suit, during the purchase of the home she was kept in the dark about several problems with the home, problems that came to light following a "moderate rainstorm" in January 2010.
"The rainwater pooled on the second floor balcony ad seeped into numerous rooms of the house, causing extensive water intrusion into various rooms," the suit alleges.
After the flood, the singer hired an engineering firm to assess the damage; during an inspection, the firm found "a host of defects in the property, including numerous waterproofing defects and evidence of water intrusion and associated damage."
Because of the defects, the suit alleges, the actual value of the home is "millions of dollars less" than the $6.9 million she paid.
Rihanna, who alleges professional negligence, negligence, breach of fiduciary duty, fraud, breach of contract and breach of implied warranty, is seeking unspecified damages, plus interest, court costs and attorneys' fees.
Read the full lawsuit here.
Wednesday, August 31, 2011
Deducting a loss on a real estate sale
Deducting a loss on a real estate sale
Due to the weak real estate market, many homeowners are forced to sell at a loss, if they are able to sell at all. But can a homeowner deduct a loss from income taxes?Unfortunately, the answer is NO, as a loss incurred on the sale of a personal asset such as a personal residence is NOT deductible.
But there is a way to deduct a loss on the sale of a home: You can convert it to a rental before you sell your home.
This requires you to rent out the home to someone who is not related to you for a reasonable market rent. Moreover, you'll have to report the rental income you receive to the Internal Revenue Service, but you may have little or no taxable rental profits due to depreciation and other deductions for rental expenses.
When you convert your residence into a rental, you convert it from a personal asset to an investment asset. Losses on the sale of investment assets are tax-deductible.
However, when you convert a residence into a rental home you will not be able to deduct its entire decline in value since you purchased the home.
Rather, your deductible loss upon the home's later sale is limited to the decline in value after the conversion to a rental. The reason for this is the way in which the home's adjusted tax basis (value for tax purposes) is calculated.
When you change property you held for personal use to rental use, your adjusted basis is the lesser of the following values:
- The property's fair market value at the time of the conversion; or
- Its adjusted basis at the time of the conversion.
Example: Joe purchased a home for $500,000 in 2002. In 2010, he decides to rent out the home. Due to the decline in the real estate market, its fair market value at the time of the conversion to a rental is $300,000.
Joe's adjusted basis in the home, therefore, is $300,000 since this is less than its original $500,000 basis. In 2011, Jack sells the home for $275,000. This leaves him with a $25,000 tax-deductible loss (a $275,000 sales price minus the $300,000 adjusted basis equals a $25,000 loss).
Any homeowner who is seriously thinking about converting his or her home to a rental should obtain an appraisal of its value from a qualified real estate appraiser. This will establish its fair market value at the time of the conversion.
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