Monthly Archives: April 2011

Joyce’s Voice…..Bill to Speed Lender Response to Short Sales

Realtors® Applaud Bill to Speed Lender Response to Short Sales

Washington, April 13, 2011

A new bill to improve the process for approving short sales may soon bring relief to distressed home owners who are unable to keep their homes and hope to avoid foreclosure. The bill, introduced in the U.S. House yesterday and strongly supported by the National Association of Realtors®, would impose a deadline of 45 days on lenders to respond to short sale requests.

The legislation, the “Prompt Decision for Qualification for Short Sale Act of 2011,” was offered in Congress by U.S. Reps. Tom Rooney (R-Fla.) and Robert Andrews (D-N.J.).

“The current short sale process can be time-consuming and inefficient, and many would-be buyers end up walking away from a sale that could have saved a home owner from foreclosure,” said NAR President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I.

“Realtors® and consumers continue to raise issues about delays in the short sale process, because lenders are unable to decide whether to approve a short sale. After many months of delays, and with no response from lenders, potential buyers are losing patience and cancelling their contracts, often resulting in the property entering foreclosure. A short sale minimizes the negative impact on sellers and generally costs the lender less than a foreclosure,” said Phipps.

NAR has been actively pushing the lending industry to improve the process for approving short sales, which represent about 13 percent of recent home sales according to NAR data. Phipps praised Reps. Rooney and Andrews for their efforts on the bill and urged Congress to pass the bill quickly.

“As the leading advocate for home ownership and housing issues, Realtors® want to help more home owners avoid foreclosure by facilitating a short sale when a family is absolutely unable to keep their home; however, that can only happen if lenders and servicers approve short sale offers in a reasonable amount of time,” said Phipps. “Streamlining short sales transactions will reduce the amount of time it takes to sell the property, improve the likelihood that the transaction will close and reduce the overall number of foreclosures. This benefits sellers, lenders, buyers and the entire community.”

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.

Joyce’s Voice…Banks Get Failing Grade in Foreclosure Handling

 
Failing Grade in Foreclosures:
Banks continue to receive backlash for their handling of a flood of foreclosures across the country. A new report released this week by federal regulators finds that banks failed to do a good job in handling foreclosures and sometimes evicted home owners when they clearly should not have.

The problems were “significant and pervasive” and added up to “a pattern of misconduct and negligence,” according to the Federal Reserve. The Fed says it soon plans to announce monetary penalties against mortgage servicers.

The report revealed several cases “in which foreclosures should not have proceeded due to an intervening event or condition,” such as families in bankruptcy or home owners who were eligible for a loan modification or even in the process of doing a loan modification.

The report also noted that banks had inadequate and poorly-trained staffs and improperly submitted paperwork to the courts.

In response to the report, several mortgage servicers signed a consent agreement this week, agreeing to changes that include new oversight procedures of foreclosures and reimbursing home owners who were wrongly foreclosed upon. One of the servicers signing the agreement, JPMorgan Chase, says it would add up to 3,000 employees to meet the new regulatory procedures.

“The banks are going to have to do substantial work, bear substantial expense, to fix the problem,” says John Walsh, the acting comptroller of the currency.

About two million households are in foreclosure, and several million home owners have already lost their home to foreclosure.

More Penalties Coming

The banks still face punishment and settlement talks with other agencies. The state attorneys general are conducting their own probe into shoddy foreclosure procedures and working with the Obama administration to overhaul the foreclosure process to prevent future abuses.

Source: “Report Criticizes Banks for Handling of Mortgages,” The New York Times (April 14, 2011)

$165,000.00 Huge Price Reduction! 3Bd, 1.5Bth, 2 Car Garage Plus Shop

The Nusbaum Residence.

Joyce’s Voice…You alone are responsible if your taxes are wrong according to the IRS!Tips for Choosing a Tax Preparer

If you pay someone to prepare your tax return, choose that preparer wisely. Taxpayers are legally responsible for what’s on their own tax returns even if prepared by someone else. So, it is important to choose carefully when hiring an individual or firm to prepare personal returns. Most return preparers are professional, honest and provide excellent service to their clients. Here are a few points to keep in mind when someone else prepares your return:

  • A Paid Preparer is required by law to sign the return and fill in the preparer areas of the form. The preparer should also include their appropriate identifying number on the return. Although the Preparer signs the return, you are responsible for the accuracy of every item on your return. In addition, the preparer must give you a copy of the return.
  • Review the completed return to ensure all tax information, your name, address and Social Security number(s) are correct. Make sure that none of these spaces is left blank.
  • Review and ensure you understand the entries and are comfortable with the accuracy of the return before you sign.
  • Never sign a blank return, and never sign in pencil.
  • If you have provided specific authorization in a power of attorney filed with the IRS, you may have copies of notices or refund checks mailed to your preparer or representative; but only you can sign and cash your refund check. For further information on Powers of Attorney, refer to Topic 311.
  • A Third Party Authorization Check Box on Form 1040 allows you to designate your Paid Preparer to speak to the IRS concerning how your return was prepared, payment and refund issues and mathematical errors.

It’s important for taxpayers to find qualified tax professionals if they need help preparing and filing their tax returns. Unqualified tax preparers may overlook legitimate deductions or credits that could cause clients to pay more tax than they should. Unqualified preparers may also make costly mistakes causing their clients to incur assessed deficiencies, penalties, and interest. Here are some suggestions to consider when hiring a tax professional:

  • A paid preparer must sign the return as required by law.
  • Avoid preparers who claim they can obtain larger refunds than other preparers. If your returns are prepared correctly, every preparer should derive substantially similar numbers.
  • Beware of a preparer who guarantees results or who bases fees on a percentage of the amount of the refund. A practitioner may not charge a contingent fee (percentage of your refund) for preparing an original tax return.
  • Understand that the most reputable preparers will request to see your receipts and will ask you multiple questions to determine your qualifications for expenses, deductions and other items. By doing so they have your best interest in mind and are trying to help you avoid penalties, interest or additional taxes that could result from an IRS examination.
  • Choose a preparer you will be able to contact and one who will be responsive to your needs. Ask who will actually prepare the return before engaging services. Avoid firms where your work may be delegated down to someone with less training or some unknown worker. You should know exactly who works with your tax matters at all times and how to contact him or her; after all, you are paying for it. Determine if the preparer is exporting your return to a foreign country for preparation. Foreign countries do not have the same security and privacy laws as the United States nor is there any recourse should your information be compromised as a result of lax or nonexistent privacy procedures.
  • Investigate whether the preparer has any questionable history with the Better Business Bureau, the state’s board of accountancy for CPAs, the state’s bar association for attorneys or the IRS Office of Professional Responsibility (OPR) for enrolled agents or the oversight agency in states that license or register tax preparers.
  • Determine if the preparer’s credentials meet your needs or if your state mandates licensing or registration requirements for paid preparers. As of 2008, California and Oregon are the only two states that regulate paid tax preparers. Is he or she an Enrolled Agent, Certified Public Accountant (CPA) or Tax Attorney? Only attorneys, CPAs and enrolled agents can represent taxpayers before the IRS in all matters including audits, collection actions and appeals. Other return preparers may represent taxpayers only in audits regarding a return that they signed as a preparer.
  • Find out if the preparer is affiliated with a professional organization that provides or requires its members to pursue continuing education and holds them accountable to a code of ethics.
  • Check IRS.govfor information regarding abusive shelters and other tax schemes and scams. Remember, if it sounds too good to be true, chances are it is.
  • The IRS can help many taxpayers prepare their own returns without the assistance of a paid preparer. Before seeking a paid preparer, taxpayers might consider how much information is available directly from the IRS through the IRS Web site. Check out these helpful links:

Unfortunately, unscrupulous tax return preparers do exist and can cause considerable financial and legal problems for their clients. Examples of improper actions by unscrupulous preparers include the preparation and filing of false paper or electronic income tax returns that claim inflated personal or business expenses, false deductions, unallowable credits or excessive exemptions.

Tax evasion is both risky and a crime, punishable by up to five years imprisonment and a $250,000 fine. Remember, no matter who prepares a tax return, the taxpayer is legally responsible for all of the information on that tax return.

Joyce’s Voice…Is this your house? Are you losing energy?

If you live in Seattle, your home is eligible for a reduced-cost energy audit. The audit will provide you with a comprehensive analysis of your home’s specific energy attributes (windows, insulation, weather-stripping etc.) and heating systems. You also will receive information on how various energy- saving upgrade options interact with each other and a list of efficiency upgrades that are most appropriate for your home.

In addition, your home may qualify for a combination of rebates, low-interest financing and tax credits for energy improvements such as a new water heater, updated attic insulation, and weatherization.

Contact your Realtor to request a Home Energy Audit  Or, contact Seattle City Light: www.seattle.gov/light/conserve/heat

Joyce’s Voice…Tax crackdown on second homes (Congress has changed the rules)

Congress has pulled the rug out from under vacation- and rental-home owners planning to squeeze tax-free profit from their second homes.

Under current law, you could sell your primary residence and take up to $250,000 of profit — $500,000 if you file a joint return — tax-free, as long as you owned and lived in the place for two of the five years leading up to the sale.

Then you could move into your vacation home or a rental property and, by living in it for at least two years, get a second bite of the tax-free apple. Even profit that built up while it was a vacation home or rental could dodge the IRS.

No more. To help pay for the big housing bill passed this summer, Congress has changed the rules so that some of your gain will be taxable if you convert your vacation home or rental unit to a primary residence after 2008.

The portion of the gain to be taxed is based on the ratio of nonqualified use — the time the property is used as a vacation home or rental unit after this year — to the total amount of time you owned the property.

Assume you bought a second home in 2000. Let’s say you convert it to your primary residence in 2011 and sell it two years later. In this example, the home would be used as a vacation property for two years after 2008, so one-seventh of the profit (two out of the 14 years you owned it) would be taxed at capital-gains rates. The remainder of the gain — up to $500,000 for couples — would be tax-free.

This tax-law change could be even more significant if you buy a second home after 2008. In that case, none of the time it is used for vacations or rental income qualifies for the tax exclusion. But if you convert it to your principal residence, the longer you live there, the less the profit from a sale will be taxed.

And you can avoid the crackdown altogether if you move in before the end of this year, says Raffaele Mari, a CPA in Corona Del Mar, Calif.
But what do you do with your current home? You could rent it to generate cash flow and buy some time before selling it in this slow housing market, Mari says. The tightening doesn’t apply in reverse: You’d still qualify for tax-free profit on the home as long as you sell it within three years to meet the two-of-five-years test.

By Mary Beth Franklin, Kiplinger’s Personal Finance

Financial concerns becoming more important to “mature movers”

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Buyers in the 55+ segment are becoming more practical when searching for a new home in the wake of the recession, with design considerations becoming less important. Instead, according to a recent study, financial concerns are becoming more prominent among “mature movers.”

While design, amenities and appearance of both the residence and the community remain important, those considerations are diminishing in the post-recession era.

The evolving preferences of the growing 55+ demographic were revealed in a joint study by the 50+ Housing Council of the National Association of Home Builders (NAHB) and the MetLife Mature Market Institute.

In contrast to previous studies, fewer 55+ buyers are depending on home sale proceeds to finance a new purchase.

The study, “Housing Trends Update for the 55+ Market,” explores housing data from the Census Bureau’s 2009 American Housing Survey (AHS). Researchers focused on households living in active adult communities, either age-qualified active adult communities where at least one resident must be age 55+, other non-age-qualified 55+ owner-occupied communities (not explicitly restricted to 55+ households but nevertheless occupied primarily by people age 55+), or age-restricted rental communities.

In 2009, only 55 percent of new age-qualified active adult home buyers reported their down payment came from a previous home sale, significantly down from 100 percent of respondents in 2005 and 92 percent in 2007. In 2005 and 2007, no active adult community buyers reported having to tap cash or savings for a down payment. That changed significantly in 2009 when 45 percent of the average buyer’s down payment came from cash or savings.

“By the year 2020, as Baby Boomers move into this age bracket, almost 45 percent of all U.S. households will include someone at least 55 years old,” said David Crowe, NAHB’s chief economist. That translates to a dramatic rise in the number of households seeking housing better suited to changing, he noted.

Relatively modest production of such housing is on the horizon, according to NAHB data. Abut 54,000 housing starts are projected in 55+ communities this year. That reflects a 30 percent jump from estimated 2010 levels. A more robust 79,000 housing starts in 55+ communities are anticipated in 2012.

Prices remain lower than 2005, when prices peaked. The analysis showed a big difference between buyers in age-qualified active adult communities and other 55+ community buyers. Average prices for 55+ homes dropped in 2007, but partially rebounded in 2009. Prices for age-qualified communities more than bounced back: they set a record with an average price of $319,000. Researchers found buyers in this group were more affluent, with average annual incomes of more than $80,000. More than one-fourth (27 percent) reported earning at least $100,000, a jump from fewer than 5 percent of such buyers in 2001.

“Most 55+ consumers—those who chose to move and those who stay in their homes—report they are happy with their homes and communities,” said Sandra Timmermann, Ed.D., director of the MetLife Mature Market Institute. She said those who moved to an age-qualified community reported the greatest satisfaction, rating their homes and communities at nine on a 10-point scale.

The desire to be near family and friends is the mature mover’s overwhelming motivation, the report noted. Buyers who fall into the 55+ age range that are moving into rental homes, both multi-family and single-family, cited a desire for less expensive housing as second in importance to living near friends and family.

Those who are able to buy are getting much more for less. In 2009, more than half the 55+ buyers said they were moving into better homes, but fewer than half reported their new homes cost more than the old ones.

“Proximity to work” was more important than in the past for those relocating to age-qualified, active adult communities. In 2009, twelve percent underscored the trend toward delayed retirement in this age group, up from 2 percent in 2001. There was also a reported increase in the share of 55+ single-family homeowners who say they work at home, a trend the researchers suggested is noteworthy for home designers.

A small, but growing share of older households is taking advantage of the ability to convert some of their home equity into a reverse mortgage or home equity conversion mortgage. They tend to be older, single-person households with lower household income and longer housing tenure. Those with reverse or home equity conversion mortgages represented more than 241,000 households in 2009, a 54 percent increase since 2007.

The report reflects trends in the American Housing Survey between 2001 and 2009. Characteristics are tabulated by the age of the occupants and structure type, as well as by community type.

“Housing Trends Update for the 55+ Market” can be downloaded from www.MatureMarketInstitute.com or from www.nahb.org/55PlusResearch.

Joyce’s Voice: What the future looks like for housing!

The Outlook
The aging echo-boom generation, augmented by immigration, will increasingly drive household growth over the next 15 years. The number of echo boomers is expected to swell to 92.9 million by 2025. Immigration is expected to grow to 86.5 million. “This highly diverse generation will give demand for apartments and smaller start homes a lift over the next 15 years,” the report stated.

Second-generation Americans (children born in the US to immigrant parents) among the echo boomers will be important in shaping the characteristics of future households since those aged 25-64 typically have higher household incomes than both foreign-born and other native-born households of all races and ethnicities.

Baby boomers will boost demand for senior housing. JCHS researchers say the units built over the next 10-20 years that intentionally cater to older Americans will be the housing available for generations to come. They expect senior housing issues will gain more urgency during the coming decade as a result of limited federal support for senior housing and the current funding system that encourages expensive trips to skilled nursing facilities rather than lower-cost, less institutional assisted living options and programs.

The State of the Nation’s Housing, released annually by the Joint Center for Housing Studies, provides a periodic assessment of the nation’s housing outlook and summarizes important trends in the economics and demographics of housing. The report continues to earn national recognition as a source of information regularly utilized by housing researchers, industry analysts, policy makers, and the business community.

The complete 44-page report on The State of the Nation’s Housing 2010 may be viewed and downloaded at http://www.jchs.harvard.edu/publications/markets/son2010/

Joyce’s Voice: Wake Up! Buying homes=Jobs

It is time to wake up the sleeping market…. According to the National Association of REALTORS®:  Good jobs enable people to achieve the American dream of home ownership. And every time a house is built, bought, or sold, jobs are created—lots of them—right here at home. Home sales in this country generate more than 2.5 million private-sector jobs in an average year. For every two homes sold, a job is created.

  • Each home sale touches 80 different occupations.
  • Every home purchased pumps up to $60,000 into the economy over time for furniture, home improvements, and related items.
  • Housing accounts for more than 15% of the Gross Domestic Product, making it a key driver in our national economy.
  • Housing has led this country out of six of the last eight recessions.

Joyce’s Voice: Don’t sit on the fence, now is the time to buy!

This is one of the best times I have ever seen for buyers to purchase homes. It is the best time I have seen since I first started selling real estate in 1987.

Interest rates are at an all time low, the prices of houses are down and the choices are great. If you are sitting on the fence and thinking that prices are going to go lower they very well may not. Don’t wait!….The problem with waiting is that you can never determine what interest rates will do, once they start to move up they can move quickly and it may be too late.  When interest rates are higher the amount of home you qualify for is less or perhaps you won’t qualify at all with a higher interest rate. You could miss out on a great buying opportunity. I know many purchaser’s are worried about the economy and it is a concern to all of us. However, you have to pay to live somewhere so if you qualify why not purchase a home when the market is at an all time low? People who buy when the market is low will win when the market turns around.!