On Thursday April 23rd,2009 from 6-8 pm the Windermere Peninsula Properties office will be teaming up with Lender Vickie Nunez from Wells Fargo Home Mortgage, Real Estate Attorney Mike Spence, Tax Accountant Catherine Wolf & Real estate manager and Broker Richard Bell of Windermere Peninsula Properties to get the latest information on the current housing market.

We expect a great attendance and RSVP is recommended. You can reach the Windermere Peninsula Properties office at 360-275-5002. Or e-mail Rbell@windermere.com

There will be Straight Answers for Home Owners and Buyers given by experts in the field. The focus will be on short sales, foreclosures, & loan modifications. Know who to ask and what to ask from those who work with these issues everyday.

The workshop is free, and in the event you are unable to attend in person we will have information following the presentation available on the web at www.therealstateofrealestate.com

This is a great opportunity to get honest answers and reliable information on the best way to proceed in this new market. Whether you are a Buyer or a Seller or just want to understand the complexities of Real Estate Today... please join us!

We are all becoming more familiar with the Distressed housing Market. Not that the homes are distressed but it can be said that the owners are. Many of the properties show beautifully and are a great bargain...So why are they still on the market?

The easiest way to answer that question is to take a look at the process of getting an approval from the bank. It appears that it would be in the best interest of the lender to accept a sale now, even if the amount is less than owed than to go through months of negotiation and the potential of loosing a buyer only to foreclose, and submit to the process starting all over again.

• List property at a price that is less the amount owed to the lender

• Get a preliminary Title

• Permission forms signed by Sellers for Agents to speak directly with the bank on their behalf.

• Have the sellers write a hardship letter ( we provide samples to follow)

• Complete the Short sale Packet and fax to the lender. Keep successful Fax confirmation. A lender may have more than one acceptable fax number...send a copy to each until successful.

• Once an offer is received make sure the other agent noted that the property is a short sale as disclosed in the MLS, and is aware of the proper forms to use for such a sale. Request a HUD statement from the title company and forward it on to the Lender.

• Fax over the offer with the loan number on the top of every page you fax.Keep in mind there may be a second loan on the property and you must follow all of the steps for each loan.

• Call the  bank for each step, and to confirm that they have the permission form. This may have to be faxed to a separate fax number than the listing paperwork or the offer. Be sure and ask which fax number is required for every step.

• Resubmit any and all material that the Lender says they do not have, even if you have a successful fax confirmation.

• Keep a detailed log containing the names of who you spoke with, and include the date and time. Keep detailed notes, and have them handy to refer back to especially when talking with the lender.

• The Lender wil be requesting a BPO (Brokers Price Opinion) to ensure that the offer is within a certain percentage of current market value before accepting it. Typically this is 10%. 

One of the first things a lender will ask for in a loan modification or a short sale will be a hardship letter. It sounds simple enough...that is if you write them all of the time and have one in your file.

Our office has dealt with many of these lately and we often suggest to our clients to review our sample letter to get them started.

Sometimes starting is the hardest part.

This is not an easy position to be in, but we do our best to help in every way we can.

DATE

LENDER NAME
ADDRESS
LOAN NUMBER Dear Sirs,

Our names are/My name is [NAME] and I've/we've been paying the mortgage on our home at [ADDRESS] for __ years now. I'm/We're writing to you to explain why I/we have unfortunately fallen behind on our monthly payments.

Explain your Hardship (Include dates and specific incidents that caused you to get behind, also explain how it has been resolved).

We/I have sat down with my/our family and taken a very hard look at our financial situation and we all have agreed to make the following sacrifices in order to make certain that this situation never happens again.

Explain what steps you have taken to correct your Financial Position (cut back on spending, canceled some things... cable, eliminated activities, met with Credit Counseling services).

My family and I are truly grateful for the opportunity that you've given us to own our home and have every intention of keeping it for a long while, as well as making timely mortgage payments to you for it. Our children will grow up here and we hope that our grandchildren will also.

Thank you again and we wish you all the best!

Have everyone in your family sign the letter.

 

As a Distressed housing experts we pride our selves in being  up to date, knowledgeable and equipped with the latest information to guide our clients through the process of Short Sales and other Loan issues.The real estate market is constantly evolving and we, the real estate professionals, will be there with you every step of the way.

Be aware that there are scams targeted to Distressed home owners...

If you don't have the time or patience to dispute the inaccuracies on your credit report yourself, and if you want to know other methods of improving your credit score, an independent credit repair company or consultant could be just what you need.

But how can you tell who is genuine? The Credit Repair Organizations Act was passed to help you do just that. Avoid the scammers by knowing what to look out for.

1. Shop around for a company so that you get a feeling for the standards that they all have. As with all services, it is usually better not to respond to people who contact you cold, directly by telephone or letter. Even if you agree to meet them, do not be pressurized into signing anything until you have had a chance to shop around.

2. Avoid any company that tries to collect money from you up front. They should not require payment until they have performed some services for you.

3. Do not select a company that makes guarantees about the results that they will get for you - for example, if they promise you a credit score increase of 100 points. They can advertise the average results that they have gotten for other clients, but they cannot promise you a certain score because they do not control that. Until they see your report and know your circumstances, they cannot be sure that they can improve your credit score at all.

4. They must inform you that you have a right to repair your credit for yourself. You do not need to hire anybody unless you want to. If their written information does not tell you this, they may not be legitimate.

5. Do not enter a contract that you cannot cancel. You should be allowed to cancel at any time. You would have to pay for the work that they had done for you up to that point, but no more.

6. Avoid any company that offers file segregation. This is an illegal practice that involves creating a new credit identity for you.

People who file for bankruptcy almost always receive letters from companies promising to solve all of their credit problems in this way. They will say that it is legal but after your new credit file is set up, any time that you apply for credit you will have to lie on the application forms. Giving false information to obtain credit is fraud. You can be fined or even sent to jail.

There are plenty of legitimate companies out there that can help you with improving your credit score. Keep these points in mind and you will have no trouble avoiding the most common credit repair scams.

FIRST-TIME HOMEBUYER TAX CREDIT

For 2009, Congress has increased the credit to $8000 and made several additional improvements. This revised $8000 tax credit applies to purchases on or after January 1, 2009 and before December 1, 2009. Tax Credits -- The Basics

1. What's this new homebuyer tax incentive for 2009?

The 2008 $7500, repayable credit is increased to $8000 and the repayment feature is eliminated for 2009 purchasers. Any home that is purchased for $80,000 or more qualifies for the full $8000 amount. If the house costs less than $80,000, the credit will be 10% of the cost. Thus, if an individual purchased a home for $75,000, the credit would be $7500. It is available for the purchase of a principal residence on or after January 1, 2009 and before December 1, 2009.

2. Who is eligible?

Only first-time homebuyers are eligible. A person is considered a first-time buyer if he/she has not had any ownership interest in a home in the three years previous to the day of the 2009 purchase.

3. How does a tax credit work?

Every dollar of a tax credit reduces income taxes by a dollar. Credits are claimed on an individual's income tax return. Thus, a qualified purchaser would figure out all the income items and exemptions and make all the calculations required to figure out his/her total tax due. Then, once the total tax owed has been computed, tax credits are applied to reduce the total tax bill. So, if before taking any credits on a tax return a person has total tax liability of $9500, an $8000 credit would wipe out all but $1500 of the tax due. ($9,500 - $8000 = $1500)

4. So what happens if the purchaser is eligible for an $8000 credit but their entire income tax liability for the year is only $6000?

This tax credit is what's called "refundable" credit. Thus, if the eligible purchaser's total tax liability was $6000, the IRS would send the purchaser a check for $2000. The refundable amount is the difference

between $8000 credit amount and the amount of tax liability. ($8000 - $6000 = $2000) Most taxpayers determine their tax liability by referring to tables that the IRS prepares each year.

5. How does withholding affect my tax credit and my refund?

A few examples are provided at the end of this document. There are several steps in this calculation, but most income tax software programs are equipped to make that determination.

6. Is there an income restriction?

Yes. The income restriction is based on the tax filing status the purchaser claims when filing his/her income tax return. Individuals filing Form 1040 as Single (or Head of Household) are eligible for the credit if their income is no more than $75,000. Married couples who file a Joint return may have income of no more than $150,000.

7. How is my "income" determined?

For most individuals, income is defined and calculated in the same manner as their Adjusted Gross Income (AGI) on their 1040 income tax return. AGI includes items like wages, salaries, interest and dividends, pension and retirement earnings, rental income and a host of other elements. AGI is the final number that appears on the bottom line of the front page of an IRS Form 1040.

8. What if I worked abroad for part of the year?

Some individuals have earned income and/or receive housing allowances while working outside the US. Their income will be adjusted to reflect those items to measure Modified Adjusted Gross Income (MAGI). Their eligibility for the credit will be based on their MAGI.

9. Do individuals with incomes higher than the $75,000 or $150,000 limits lose all the benefit of the credit?

Not always. The credit phases-out between $75,000 - $95,000 for singles and $150,000 - $170,000 for married filing joint. The closer a buyer comes to the maximum phase-out amount, the smaller the credit will be. The law provides a formula to gradually withdraw the credit. Thus, the credit will disappear after an individual's income reaches $95,000 (single return) or $170,000 (joint return). For example, if a married couple had income of $165,000, their credit would be reduced by 75% as shown: Couple's income $165,000 Income limit 150,000 Excess income $15,000 The excess income amount ($15,000 in this example) is used to form a fraction. The numerator of the fraction is the excess income amount ($15,000). The denominator is $20,000 (specified by the statute).

In this example, the disallowed portion of the credit is 75% of $8000, or $6000 ($15,000/$20,000 = 75% x $8000 = $6000) Stated another way, only 25% of the credit amount would be allowed. In this example, the allowable credit would be $2000 (25% x $8000 = $2000)

10. What's the definition of "principal residence?"

Generally, a principal residence is the home where an individual spends most of his/her time (generally defined as more than 50%). It is also defined as "owner-occupied" housing. The term includes single-family detached housing, condos or co-ops, townhouses or any similar type of new or existing dwelling. Even some houseboats or manufactured homes count as principal residences.

11. Are there restrictions on the location of the property?

Yes. The home must be located in the United States. Property located outside the US is not eligible for the credit.

12. Are there restrictions related to the financing for the mortgage on the property?

In 2009, most financing arrangements are acceptable and will not affect eligibility for the credit. Congress eliminated the financing restriction that applied in 2008. (In 2008, purchasers were ineligible for the $7500 credit if the financing was obtained by means of mortgage revenue bonds.) Now, mortgage-revenue bond financing will not disqualify an otherwise-eligible purchaser. (Mortgage revenue bonds are tax-exempt bonds issued by a state housing agency. Proceeds from the bonds must be used for below market loans to qualified buyers.)

13. Do I have to repay the 2009 tax credit? 

NOW HERE IS A BIGGY! 

14. Do 2008 purchasers still have to repay their tax credit?

 The $7500 credit in 2008 was more like an interest-free loan. All eligible purchasers who claimed the 2008 credit will still be required to repay it over 15 years, starting with their 2010 tax return.