Not just Ancronyms
Is this holding down the DOW from Eleven thousand?
10921 today. If the Federal government isn’t going to buy any mortgage backed securities as threatened… The stock market ought to look like October 29th 1929
How am I going to pay more taxes to cover the insurance premiums for others?
Bond market has been a rollercoaster for a week, yet little is mentioned in the news media about how scary this really looks.
3/30/2010
3/29/2010
3/26/2010
FHA premium JUMPs to 2.25% ASAP get a case number
It appears in response to this week's Federal Grand Inquistion into how we are to make Fannie Freddie and FHA independant companies FHA is boosting their premiums for Mortgage insurance to 2.25% vs. 1.75%. The only way to avoid this jump in costs is to have a house under contract and order a case number today.
Len Brutacao put a good word in Heaven for us.
I saw the lupine and poppies in their glory on highway 241. I say a prayer for the Brutacao
family. Cheers to thier great father, leader and visionary who now is in Heaven. The rosary
kast night was one of many demonstrations of how you changed the world.
family. Cheers to thier great father, leader and visionary who now is in Heaven. The rosary
kast night was one of many demonstrations of how you changed the world.
3/24/2010
Fannie Mae program to sell Foreclosures unveiled
FANNIE MAE HOME PATH May 27th
• Up to 97% financing
• No appraisal required (they have it)
• No mortgage insurance (MI) is required !!!– although Fannie Mae-required price adjusters will apply
• Flexible mortgage terms – including fixed-rate, ARMs or the Interest-Only payment feature
• Variety of property types allowed including previously approved condominium projects
• Credit scores as low as 660 with 80% LTV
www.homepath.com lookup your target location for listings
Interest Rates up a little this morning
Stock market slips after a week of giddy gains, but Americans do
not run in to buy equities.
I believe some stocks are buys in pull back days- Apple Sealy
light durable goods and things teens buy
• Up to 97% financing
• No appraisal required (they have it)
• No mortgage insurance (MI) is required !!!– although Fannie Mae-required price adjusters will apply
• Flexible mortgage terms – including fixed-rate, ARMs or the Interest-Only payment feature
• Variety of property types allowed including previously approved condominium projects
• Credit scores as low as 660 with 80% LTV
www.homepath.com lookup your target location for listings
Interest Rates up a little this morning
Stock market slips after a week of giddy gains, but Americans do
not run in to buy equities.
I believe some stocks are buys in pull back days- Apple Sealy
light durable goods and things teens buy
3/23/2010
SET FANNIE AND FREDDIE FREE?
Let them eat cake.
Interest rates unchanged, appear flat but….
Current Price of FNMA 4.5% Bond
1. Mortgage Bonds are starting the day near unchanged
2. Existing Home Sales for February were reported at 5.02M in line with expectations.
3. Inventory numbers up- sales swelled to month level from the 7.8 month reading in January,
4. The highest inventory level since August's 2010 9.2
5. The government's First Time Home Buyer Tax Credit ends soon
6. The only fix for housing is a stronger labor market.
7. Hearings begin today on the potential reshaping of the mortgage market Will Fannie Mae and Freddie Mac survive?
Someone please tell me where Wall Street really exists?
Wall Street is not in New York it is an international problem.
The US is not Married to Fannie or Freddie
. Barney Frank sent fear through mortgage and banking world with implications that the US guarantee of Fannie (FNM) and Freddie (FRE) isn't as ongoing and committed as has been assumed. Treasury Secretary Timothy Geithner is in the hot seat in front of the House of Representatives Financial Services
Committee today.
18 months ago $127Billion was given to Freddie and Fannie and they are still not making any money.
Mr. Geithner has no easy fix. Our bulky cumbersome and wasteful current system is all we have. If the US stops supporting Fannie Freddie and FHA, no one in America will be able to get a loan.
Republicans want the housing finance system privatized, but private capital/ pension funds/ foreign funds/ or some new investors (reinvent the old savings and loan concept) still are not buying. So who would be the primary source mortgage financing? Winding down Fannie Mae and Freddie Mac over a 4 to 5 year period is a plan without any solution.
Today Fannie and Freddie, along with the FHA, back over 90% of all home loans. So how can they be run like real business?
Fannie Mae pulled cash out of foreign banks in past two days to appear to make moves to be independent.
Interest rates unchanged, appear flat but….
Current Price of FNMA 4.5% Bond
1. Mortgage Bonds are starting the day near unchanged
2. Existing Home Sales for February were reported at 5.02M in line with expectations.
3. Inventory numbers up- sales swelled to month level from the 7.8 month reading in January,
4. The highest inventory level since August's 2010 9.2
5. The government's First Time Home Buyer Tax Credit ends soon
6. The only fix for housing is a stronger labor market.
7. Hearings begin today on the potential reshaping of the mortgage market Will Fannie Mae and Freddie Mac survive?
Someone please tell me where Wall Street really exists?
Wall Street is not in New York it is an international problem.
The US is not Married to Fannie or Freddie
. Barney Frank sent fear through mortgage and banking world with implications that the US guarantee of Fannie (FNM) and Freddie (FRE) isn't as ongoing and committed as has been assumed. Treasury Secretary Timothy Geithner is in the hot seat in front of the House of Representatives Financial Services
Committee today.
18 months ago $127Billion was given to Freddie and Fannie and they are still not making any money.
Mr. Geithner has no easy fix. Our bulky cumbersome and wasteful current system is all we have. If the US stops supporting Fannie Freddie and FHA, no one in America will be able to get a loan.
Republicans want the housing finance system privatized, but private capital/ pension funds/ foreign funds/ or some new investors (reinvent the old savings and loan concept) still are not buying. So who would be the primary source mortgage financing? Winding down Fannie Mae and Freddie Mac over a 4 to 5 year period is a plan without any solution.
Today Fannie and Freddie, along with the FHA, back over 90% of all home loans. So how can they be run like real business?
Fannie Mae pulled cash out of foreign banks in past two days to appear to make moves to be independent.
3/22/2010
SHORT SALE IRS RULES
Excerpts from IRS website this is not legal advise:
The Home Affordable Foreclosure Alternatives (HAFA) program goes into effect April 5. This is an extension of the first HAFA which hopes to provide default solutions to homeowners. Lenders and sellers will receive cash incentives to complete short sales. There is no real incentive for lenders to complete costly short sales; hopefully the number of closed units will be published. In the past months Lenders did not staff up their loss mitigation departments to answer calls and receive packages and the process was slow and difficult. Many lenders have made the process more transparent by posting requirements and forms. These set of pointers will aid sellers and real estate professionals to move the bottle neck of pending defaults in to closed short sales.
1. Work together with a title company, a tax advisor and a lender. These transactions are complex and the tax consequences are very important to review in advance.
2. Have seller contact both the first and second. If the second is a different lender than the first they may not be willing to cut their losses to 90% or more.
3. Review the type of second. Purchase money seconds have less tax liability. Credit Unions and private money seconds may not be willing to cooperate at all. There is no incentive for these to take the loss on their books today.
4. Review offers which have more strict property requirements such as FHA and VA since there is no money to pay for property improvements the buyer will need to pay for any repairs and this may not be allowed.
5. If the seller is not doing termite, do not accept an offer which mentions termite as FHA and VA loans will not waive Section I and Section II if called for in any contracts or counteroffers.
6. Review title report for liens, Homeowner Association past dues and back taxes, these numbers are moving targets which will grow larger as time unfolds.
7. Time is of the essence. Today the Seller can get approval from their lender for the listing dollar amount before they have a buyer under contract.
OFFSET Capitol losses against gains or no more than $3000 a year.
Sellers can offset their capital losses against capital gains.With the absence of capital gains, the yearly cap is $3,000 ($1,500 for married couples filing separately) on the losses they can offset against their "ordinary income," meaning income from sources like salaries, pensions and withdrawals from retirement plans.
Terms and definitions:
1099-A There can be severe tax consequences for an owner who simply walks away because he or she has little or no equity and the lender takes over and sells the place. Unless the owner is insolvent they will receive a 1099-A as income to declare
Owner occupied residence bought for $300,000, down payment of $15,000 and a mortgage $285,000. He is personally liable for the mortgage. The bank accepts a voluntary conveyance of the house Value of house is $230,000.
Tax code treats the transaction as a sale. A nondeductible loss of $70,000, is adjusted basis of $300,000 exceeding its market value of $230,000. No deduction for the loss is available.
Add the income of $50,000 when the bank cancels the loan. The $50,000 is the amount by which the debt of $280,000 exceeds market value of $230,000.
When the property is foreclosed or repossessed, the bank sends a Form 1099-A to owner/borrower and the IRS. A 1099-A indicates the foreclosure bid price ($230,000), the amount of debt ($280,000), and whether he was personally liable. Debt cancellation (here, $50,000) is taxed at the rates for ordinary income, same as for salary.
1099-C If you borrow money from a commercial lender and the lender later cancels or forgives the debt, you may have to include the cancelled amount in income for tax purposes, depending on the circumstances. When you borrowed the money you were not required to include the loan proceeds in income because you had an obligation to repay the lender. When that obligation is subsequently forgiven, the amount you received as loan proceeds is normally reportable as income because you no longer have an obligation to repay the lender. The lender is usually required to report the amount of the canceled debt to you and the IRS on a Form 1099-C, Cancellation of Debt.
You borrow $10,000 and default on the loan after paying back $2,000. If the lender is unable to collect the remaining debt from you, there is a cancellation of debt of $8,000, this is taxable income to you.
Is Cancellation of Debt income always taxable?
Not always. There are some exceptions. The most common situations when cancellation of debt income is not taxable involve:
• Qualified principal residence indebtedness: This is the exception created by the Mortgage Debt Relief Act of 2007 and applies to most homeowners.
• Bankruptcy: Debts discharged through bankruptcy are not considered taxable income.
• Insolvency: If you are insolvent when the debt is cancelled, some or all of the cancelled debt may not be taxable to you. You are insolvent when your total debts are more than the fair market value of your total assets.
.
• Non-recourse loans: A non-recourse loan is a loan for which the lender’s only remedy in case of default is to repossess the property being financed or used as collateral. That is, the lender cannot pursue you personally in case of default. Forgiveness of a non-recourse loan resulting from a foreclosure does not result in cancellation of debt income. However, it may result in other tax consequences.
Mortgage Forgiveness Debt Relief Act of 2007 ENDS 2012
Act allows exclusion of income realized as a result of modification of the terms of the mortgage, or foreclosure on your principal residence.
What does exclusion of income mean?
Normally, debt that is forgiven or cancelled by a lender must be included as income on your tax return and is taxable. But the Mortgage Forgiveness Debt Relief Act allows you to exclude certain cancelled debt on your principal residence from income. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief.
Does the Mortgage Forgiveness Debt Relief Act apply to all forgiven or cancelled debts?
No. Only forgiven or cancelled debt used to buy, build or substantially improve your principal residence, or to refinance debt incurred for those purposes. In addition, the debt must be secured by the home. This is known as qualified principal residence indebtedness. The maximum amount you can treat as qualified principal residence indebtedness is $2 million or $1 million married filing separately.
Does the Mortgage Forgiveness Debt Relief Act apply to debt incurred to refinance a home?
Debt used to refinance your home qualifies for this exclusion, but only to the extent that the principal balance of the old mortgage, immediately before the refinancing, would have qualified. Cash out refinance is a grey area.
What is limit on the amount of forgiven qualified principal residence indebtedness that can be excluded from income?
The maximum amount you can treat as qualified principal residence indebtedness is $2 million ($1 million if married filing separately for the tax year), at the time the loan was forgiven.
How do I know or find out how much debt was forgiven?
Your lender should send a Form 1099-C, Cancellation of Debt, by February 2, 2010. The amount of debt forgiven or cancelled will be shown in box 2.
Can I exclude debt forgiven on my second home, credit card or car loans?
NO. Only cancelled debt used to buy, build or improve your principal residence or refinance debt incurred for those purposes qualifies for this exclusion.
If part of the forgiven debt doesn't qualify for exclusion from income under this provision, is it possible that it may qualify for exclusion under a different provision?
Yes. The forgiven debt may qualify under the insolvency exclusion. It is not required to include forgiven debts in income to the extent that you are insolvent. You are insolvent when your total liabilities exceed your total assets. The forgiven debt may also qualify for exclusion if the debt was discharged in a Title 11 bankruptcy proceeding.
I lost money on the foreclosure of my home. Can I claim a loss on my tax return?
No. Losses from the sale or foreclosure of personal property are not deductible.
If I sold my home at a loss and the remaining loan is forgiven, does this constitute a cancellation of debt?
Yes. To the extent that a loan from a lender is not fully satisfied and a lender cancels the unsatisfied debt, you have cancellation of indebtedness income. If the amount forgiven or canceled is $600 or more, the lender must generally issue Form 1099-C.
The Home Affordable Foreclosure Alternatives (HAFA) program goes into effect April 5. This is an extension of the first HAFA which hopes to provide default solutions to homeowners. Lenders and sellers will receive cash incentives to complete short sales. There is no real incentive for lenders to complete costly short sales; hopefully the number of closed units will be published. In the past months Lenders did not staff up their loss mitigation departments to answer calls and receive packages and the process was slow and difficult. Many lenders have made the process more transparent by posting requirements and forms. These set of pointers will aid sellers and real estate professionals to move the bottle neck of pending defaults in to closed short sales.
1. Work together with a title company, a tax advisor and a lender. These transactions are complex and the tax consequences are very important to review in advance.
2. Have seller contact both the first and second. If the second is a different lender than the first they may not be willing to cut their losses to 90% or more.
3. Review the type of second. Purchase money seconds have less tax liability. Credit Unions and private money seconds may not be willing to cooperate at all. There is no incentive for these to take the loss on their books today.
4. Review offers which have more strict property requirements such as FHA and VA since there is no money to pay for property improvements the buyer will need to pay for any repairs and this may not be allowed.
5. If the seller is not doing termite, do not accept an offer which mentions termite as FHA and VA loans will not waive Section I and Section II if called for in any contracts or counteroffers.
6. Review title report for liens, Homeowner Association past dues and back taxes, these numbers are moving targets which will grow larger as time unfolds.
7. Time is of the essence. Today the Seller can get approval from their lender for the listing dollar amount before they have a buyer under contract.
OFFSET Capitol losses against gains or no more than $3000 a year.
Sellers can offset their capital losses against capital gains.With the absence of capital gains, the yearly cap is $3,000 ($1,500 for married couples filing separately) on the losses they can offset against their "ordinary income," meaning income from sources like salaries, pensions and withdrawals from retirement plans.
Terms and definitions:
1099-A There can be severe tax consequences for an owner who simply walks away because he or she has little or no equity and the lender takes over and sells the place. Unless the owner is insolvent they will receive a 1099-A as income to declare
Owner occupied residence bought for $300,000, down payment of $15,000 and a mortgage $285,000. He is personally liable for the mortgage. The bank accepts a voluntary conveyance of the house Value of house is $230,000.
Tax code treats the transaction as a sale. A nondeductible loss of $70,000, is adjusted basis of $300,000 exceeding its market value of $230,000. No deduction for the loss is available.
Add the income of $50,000 when the bank cancels the loan. The $50,000 is the amount by which the debt of $280,000 exceeds market value of $230,000.
When the property is foreclosed or repossessed, the bank sends a Form 1099-A to owner/borrower and the IRS. A 1099-A indicates the foreclosure bid price ($230,000), the amount of debt ($280,000), and whether he was personally liable. Debt cancellation (here, $50,000) is taxed at the rates for ordinary income, same as for salary.
1099-C If you borrow money from a commercial lender and the lender later cancels or forgives the debt, you may have to include the cancelled amount in income for tax purposes, depending on the circumstances. When you borrowed the money you were not required to include the loan proceeds in income because you had an obligation to repay the lender. When that obligation is subsequently forgiven, the amount you received as loan proceeds is normally reportable as income because you no longer have an obligation to repay the lender. The lender is usually required to report the amount of the canceled debt to you and the IRS on a Form 1099-C, Cancellation of Debt.
You borrow $10,000 and default on the loan after paying back $2,000. If the lender is unable to collect the remaining debt from you, there is a cancellation of debt of $8,000, this is taxable income to you.
Is Cancellation of Debt income always taxable?
Not always. There are some exceptions. The most common situations when cancellation of debt income is not taxable involve:
• Qualified principal residence indebtedness: This is the exception created by the Mortgage Debt Relief Act of 2007 and applies to most homeowners.
• Bankruptcy: Debts discharged through bankruptcy are not considered taxable income.
• Insolvency: If you are insolvent when the debt is cancelled, some or all of the cancelled debt may not be taxable to you. You are insolvent when your total debts are more than the fair market value of your total assets.
.
• Non-recourse loans: A non-recourse loan is a loan for which the lender’s only remedy in case of default is to repossess the property being financed or used as collateral. That is, the lender cannot pursue you personally in case of default. Forgiveness of a non-recourse loan resulting from a foreclosure does not result in cancellation of debt income. However, it may result in other tax consequences.
Mortgage Forgiveness Debt Relief Act of 2007 ENDS 2012
Act allows exclusion of income realized as a result of modification of the terms of the mortgage, or foreclosure on your principal residence.
What does exclusion of income mean?
Normally, debt that is forgiven or cancelled by a lender must be included as income on your tax return and is taxable. But the Mortgage Forgiveness Debt Relief Act allows you to exclude certain cancelled debt on your principal residence from income. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief.
Does the Mortgage Forgiveness Debt Relief Act apply to all forgiven or cancelled debts?
No. Only forgiven or cancelled debt used to buy, build or substantially improve your principal residence, or to refinance debt incurred for those purposes. In addition, the debt must be secured by the home. This is known as qualified principal residence indebtedness. The maximum amount you can treat as qualified principal residence indebtedness is $2 million or $1 million married filing separately.
Does the Mortgage Forgiveness Debt Relief Act apply to debt incurred to refinance a home?
Debt used to refinance your home qualifies for this exclusion, but only to the extent that the principal balance of the old mortgage, immediately before the refinancing, would have qualified. Cash out refinance is a grey area.
What is limit on the amount of forgiven qualified principal residence indebtedness that can be excluded from income?
The maximum amount you can treat as qualified principal residence indebtedness is $2 million ($1 million if married filing separately for the tax year), at the time the loan was forgiven.
How do I know or find out how much debt was forgiven?
Your lender should send a Form 1099-C, Cancellation of Debt, by February 2, 2010. The amount of debt forgiven or cancelled will be shown in box 2.
Can I exclude debt forgiven on my second home, credit card or car loans?
NO. Only cancelled debt used to buy, build or improve your principal residence or refinance debt incurred for those purposes qualifies for this exclusion.
If part of the forgiven debt doesn't qualify for exclusion from income under this provision, is it possible that it may qualify for exclusion under a different provision?
Yes. The forgiven debt may qualify under the insolvency exclusion. It is not required to include forgiven debts in income to the extent that you are insolvent. You are insolvent when your total liabilities exceed your total assets. The forgiven debt may also qualify for exclusion if the debt was discharged in a Title 11 bankruptcy proceeding.
I lost money on the foreclosure of my home. Can I claim a loss on my tax return?
No. Losses from the sale or foreclosure of personal property are not deductible.
If I sold my home at a loss and the remaining loan is forgiven, does this constitute a cancellation of debt?
Yes. To the extent that a loan from a lender is not fully satisfied and a lender cancels the unsatisfied debt, you have cancellation of indebtedness income. If the amount forgiven or canceled is $600 or more, the lender must generally issue Form 1099-C.
3/17/2010
Laguna Niguel City Fiddles During Fire
CITY OF LAGUNA NIGUEL FIDDLING WHILE THE CITY BURNS?
When Nero Claudius Caesar Augustus Germanicus built his last great theater in AD 68 the people of Rome began to revolt. Why is no one out picketing on Crown Valley Parkway the foolish spending of probably thirty million dollars for a palace that has no purpose? Is the City on happy pills? Are we unaware of the Great Economic Recession (heaven forbid I use the word Depression that we all think but hold in silence)?
Municipal buildings, brick and mortar structures and monuments to glory generally collect a good deal of dust. The tax revenue from Commercial business in Laguna Niguel does not support such and enormous expense. Laguna Niguel has little remaining vacant land to worry about the necessity for a planning department which is seperated from neighboring South County Cities.
The surrounding cities make more sense to be consolidated into centralized tri-city operations. Our water, power, gas, Sherriff, Fire Departments and two school districts all cross over and serve a variety of city lines. It makes far more sense to organize three sets of tri-city organizations which would manage more efficiently and save great wasted costs. For that matter we could easily consolidate both school districts into one modest centralized center. Cities ought to be realistically budgeting for tough times that will not quickly be corrected and be more responsible to long range planning.
When Nero Claudius Caesar Augustus Germanicus built his last great theater in AD 68 the people of Rome began to revolt. Why is no one out picketing on Crown Valley Parkway the foolish spending of probably thirty million dollars for a palace that has no purpose? Is the City on happy pills? Are we unaware of the Great Economic Recession (heaven forbid I use the word Depression that we all think but hold in silence)?
Municipal buildings, brick and mortar structures and monuments to glory generally collect a good deal of dust. The tax revenue from Commercial business in Laguna Niguel does not support such and enormous expense. Laguna Niguel has little remaining vacant land to worry about the necessity for a planning department which is seperated from neighboring South County Cities.
The surrounding cities make more sense to be consolidated into centralized tri-city operations. Our water, power, gas, Sherriff, Fire Departments and two school districts all cross over and serve a variety of city lines. It makes far more sense to organize three sets of tri-city organizations which would manage more efficiently and save great wasted costs. For that matter we could easily consolidate both school districts into one modest centralized center. Cities ought to be realistically budgeting for tough times that will not quickly be corrected and be more responsible to long range planning.
