Owning Home, Getting Income During Retirement

Plan your Path

Retirement planning around owning a home, receiving mortgage interest on a note, having a second gig, going back to work part time are issues to consider before you file your tax return

The Social Security earnings limit is the maximum amount of money you can earn while still receiving your full Social Security benefits. If you earn more than the limit, your benefits will be reduced.

The earnings limit for people who have not yet reached full retirement age is $1,770 per month or $21,240 per year in 2023. If you reach full retirement age in 2023, the limit on your earnings for the months before full retirement age is $56,520. Once you actually attain full retirement age, the earnings limit goes away.

The income that counts towards the earnings limit is employment income, which means gross employment wages if you're an employee and/or your net earnings from self-employment. The earnings caps are adjusted annually for national wage trends, and they differ depending on how close you are to full retirement age.

There is a special rule that lets the SSA pay a full Social Security check for any whole month they consider you retired, regardless of your yearly earnings. This rule can be used if you are working part-time or if you have a seasonal job.

Other considerations

If you receive Medicaid:

The income ceiling for Medicaid varies by state, but it is generally based on the federal poverty level (FPL). In 2023, the FPL for a single person is $14,580. This means that a single person in most states would be eligible for Medicaid if their income is below $14,580.

However, there are some states that have expanded Medicaid eligibility to include adults with incomes up to 138% of the FPL. This means that an adult in these states could be eligible for Medicaid if their income is up to $21,240 in 2023.

The income ceiling for Medicaid also depends on household size. For example, a family of four in most states would be eligible for Medicaid if their income is below $37,100 in 2023.

It is important to note that the income ceiling for Medicaid is just one factor that determines eligibility. Other factors, such as age, disability, and pregnancy, may also affect eligibility.

Owning property does not necessarily disqualify you from receiving Medicaid. However, the value of your home and other assets may affect your eligibility.

In most cases, your primary home is exempt from the asset limits for Medicaid eligibility. This means that the value of your home will not count towards your assets when determining eligibility. However, there are some exceptions to this rule. For example, if you own a second home or a vacation home, the value of those homes will count towards your assets.

The value of your other assets, such as savings accounts, investments, and vehicles, may also affect your eligibility for Medicaid. In general, you cannot have more than $2,000 in countable assets to qualify for Medicaid. However, there are some exceptions to this rule, such as if you are blind or disabled.

If you are considering applying for Medicaid, it is important to talk to an elder law attorney or other financial advisor to discuss your specific situation. They can help you understand the asset limits for Medicaid in your state and how owning property may affect your eligibility.

Here are some additional things to keep in mind about owning property and receiving Medicaid:

• If you sell your home, the money you receive from the sale will count towards your assets.
• In high cost states selling your home with a low basis may cause you owe income tax and capital gains tax.
• Balancing act of not paying extra taxes when you are retired takes planning
• If you give away your home, the value of the home will count towards your assets for a period of time. Gift taxes limit the amount the dollar amounts you can give to family.
• If you live in a nursing home, Medicaid may place a lien on your home to ensure that it can be repaid for the cost of your care.

It is important to plan ahead if you are considering applying for Medicaid and own property. By working with an elder law attorney or financial advisor, you can make sure that you are aware of the rules and regulations and that you are taking steps to protect your assets.

FHA Self Sufficiency Test

Watch out Sellers with triplex and fourplex for sale in high priced markets.

FHA offer may appear great but has some pitfalls to be aware of.

FHA's self-sufficiency test ensures that a property generates enough rent to cover its expenses, including the housing payment. The test requires that 75% of the total market rent for all units be more than the total monthly mortgage payment. The total payment includes principal, interest, taxes, mortgage insurance (PMI), and any other insurance (like homeowners insurance). 

The income needs to be over and above the buyer's maximum monthly mortgage payment, or principal, interest, taxes, and insurance (PITI). This income needs to account for the vacancy rate and estimated maintenance fees.

To pass the test, the building and the rents have to pass a self-sufficiency test. To get approved for an FHA loan based on rental income, the lender must calculate the net rental income plus the depreciation from schedule E of the tax returns, and then divide that by 12. If the rental property is new and you do not have a tax return to provide yet, the lender will use 75% of the rental income on your loan application. You may be required to provide copies of the leases along with proof of bank deposits. Short term rental doesn't apply as you are newby home buyer with no track record of managing STR

FHA self sufficiency test uses the MARKET rents on the units that the owner will not occupy. 75% of the rents needs to cover the mortgage payment (PITI). Much more strict than DSCR as DSCR uses the real rents and some no haircut some only 10% discount.

Buyer qualifies with their income plus 75% of the other rents. In high priced markets this makes the loan fail. This means no mortgage approval. Rents are not as high as the sale price in proportionate measure. Very common problem when price exceeds $500000. Triplex and fourplex rents also tend to be lower than SFR rents further exacerbating the problem.

Seller beware on units when offer is FHA because the inexperienced loan officer gets stuck on this problem after the appraisal on day twelve or later when they should have run the numbers before starting the loan. The appraiser determines the market rents with a survey (form 1007). This number now STICKS on the property just as an FHA appraisal is glued to the address for six months. FHA case number allows all subsequent lenders to see the valuation and the 1007.

1007 form licensed Appraiser uses determines the market rents. The appraiser surveys other advertisements and calls property managers to determine the monthly rental income for the square footage, location, and property type. The listing agent can provide this information BEFORE the appraiser starts, just like with assisting providing comparable sales it is vital that the listing agent provides the market facts to appraiser at the start. Doing a reconsideration wastes time and is very difficult to overturn a person's opinion. Your mortgage lender should be asking listing agent to provide all the comps and rental history possible as it only helps the deal close.

https://duchessdevonshire.etsy.com

Mobile Home Loans

Pier and beam foundation: This is the most common type of foundation for manufactured homes. It is made up of concrete piers that are sunk into the ground and connected by beams. This type of foundation is relatively inexpensive to install and can be built on a variety of soil types.

Slab foundation: This type of foundation is made up of a concrete slab that is poured directly on the ground. Slab foundations are more expensive to install than pier and beam foundations, but they can provide a more stable foundation for your home.

Crawl space foundation: This type of foundation is made up of a concrete crawl space that is dug beneath the home. Crawl space foundations are more expensive to install than pier and beam foundations, but they can provide better insulation and drainage for your home.

The type of foundation that is best for you will depend on your individual needs and budget. If you are looking for the most affordable option, then a pier and beam foundation is a good choice. If you are looking for a more stable foundation, then a slab foundation or crawl space foundation may be a better option.

It is important to note that not all lenders will offer mobile home mortgages for homes with certain foundation types. For example, some lenders may not offer mortgages for homes with pier and beam foundations. It is important to check with your lender before you choose a foundation type to make sure that you will be able to get a mortgage.

Here are some additional tips for lowering the cost of a mobile home mortgage:

• Put down a larger down payment: The larger your down payment, the lower your monthly mortgage payments will be.
• Get a good credit score: A good credit score will qualify you for lower interest rates on your mortgage.
• Shop around for the best interest rate: Compare interest rates from different lenders before you choose a mortgage.
• Consider a government-backed loan: Government-backed loans, such as FHA loans and VA loans, offer lower interest rates and down payment requirements than conventional loans.
• We offer mortgages on single wide, double and triple wide. 
• FICO score as low as 550
• No cap on acreage
• FHA, conventional, private money depending on your needs
• Call 949-  784- 9699 for terms and conditions
• This is not a commitment to lend

By following these tips, you can lower the cost of your mobile home mortgage and make it more affordable to own a manufactured home.

AI Bias in Mortgage

Did you know that AI can be biased in appraisal valuations, voice mirroring, and credit decisioning? 

This happens when the data used to train the AI algorithm is biased, leading to unfair results.  Or in simple terms the input is steered.

For example, if the data set only includes homes in white neighborhoods, the AI algorithm may value homes in white neighborhoods higher than homes in minority neighborhoods. Similarly, AI mirroring your voice to hack your bank account is a potential security risk. 

Attackers can record your voice and use AI to mimic it, potentially gaining access to your accounts. 

Additionally, AI credit decisioning in mortgage loans may not be democratic if the algorithm is not trained on a diverse data set. Awareness of these potential biases is key to mitigating them.

 Read more about regulation coming regarding AI bias here: https://archive.ph/fpcZ7

• AI bias in appraisal valuations can occur when the data used to train the AI algorithm is biased. For example, if the data set only includes homes in white neighborhoods, the AI algorithm may be more likely to value homes in white neighborhoods higher than homes in minority neighborhoods.
• AI mirroring your voice to be used to hack your bank account is a potential security risk. If an attacker can record your voice and then use AI to mimic your voice, they could potentially use this to gain access to your bank account or other sensitive accounts.
• AI credit decisioning not democratic can occur when the AI algorithm is not trained on a diverse data set. For example, if the data set only includes people with high credit scores, the AI algorithm may be more likely to approve loans for people with high credit scores, even if people with lower credit scores would be just as likely to repay the loan.

These are just a few examples of how AI can be biased. It is important to be aware of these potential biases so that we can take steps to mitigate them.

Here are some things that can be done to mitigate AI bias:

• Use a diverse data set when training AI algorithms. This will help to ensure that the algorithm is not biased towards any particular group of people.
• Use algorithms that are transparent. This will allow people to understand how the algorithm works and identify any potential biases.
• Use algorithms that are auditable. This will allow people to check the algorithm's output for any potential biases.

Can AI be used in a fair and equitable way?

California Probate

Probate settles a deceased person's estate in California. It's required if the estate is worth more than $184,500. Probate typically occurs when the deceased person died without a will, but it can also occur if the deceased person had a will but owned real property that is subject to probate. So Dad didn't put the house deed in a Living Trust and there is equity in the home and other checking, and savings accounts. Gather up all the paperwork. Start checking the mail for mortgage bills, insurance bills, bank statements and other papers you need to compile.
The probate process can take anywhere from twelve to eighteen months, but California law states that the personal representative should have completed probate within a year of being appointed.

 Probate fees are based on the gross value of the estate and are as follows: 4% on the first $100,000; 3% on the next $100,000; 2% on the next $800,000; 1% on the next $9,000,000; 0.5% on the next $15,000,000. There is also a filing fee of about $435.
If no one files probate, the court can freeze the decedent's assets, making them inaccessible to heirs and other beneficiaries until debts are paid.
You can avoid probate by making a living trust to avoid probate for virtually any asset you own. You can also set up a brokerage account to pass on your death to a named beneficiary or beneficiaries without going through probate.
The fee to file a probate petition is approximately $500, but may be slightly higher in some counties due to surcharges. There will be an additional fee of approximately $500 when the petition for final distribution is filed.
Higher fees can be ordered by a court in special circumstances and for more complicated cases.
You can complete probate on your own, but an attorney can make the process easier. Here is a list of some of the forms you need to file. They do not have to be typed but fill in all the boxes and read carefully.
Petition for Probate: Form DE-111, which can be downloaded and completed from the county website.
Original Will: If there is one
Notice of Petition to Administer the Estate: Form DE-121
Duties and Liabilities for Personal Representative: Form DE-147
Order to Probate: Form DE-140
Letters: DE-150
You can file the petition with the local court. The petition must be filed with the California Superior Court in the county where the deceased resided at the time of their death.

You can have up to one year after the person's death to file probate and settle the estate in California

Loan Origination Software Apps LOS

• Increased efficiency: LOS can automate many of the manual tasks involved in loan origination, such as data entry, document preparation, and underwriting. This can free up staff time to focus on other tasks, such as customer service and marketing.

• Reduced costs: LOS can help mortgage banks reduce costs by streamlining the loan origination process. This can be achieved by eliminating duplicate data entry, reducing the need for manual approvals, and automating tasks that were previously performed manually.

• Improved customer experience: LOS can help mortgage banks improve the customer experience by providing a more convenient and efficient loan origination process. This can be achieved by making it easier for customers to apply for loans, providing real-time updates on the status of their loans, and offering online access to loan documents.

• Enhanced compliance: LOS can help mortgage banks comply with regulations by providing a centralized system for storing and managing loan data. This can help banks to track compliance requirements and to identify and mitigate risks.

• Loan application: The LOS automates the loan application process, from gathering customer information to generating pre-qualification letters. This can save time for both the customer and the loan officer. PDF, word Docs, Tiff files can be enlarged to be able to read the fine print.

• Underwriting: LOS can help mortgage banks to automate the underwriting process, from assessing creditworthiness to verifying employment and income. Underwrite can see documentation uploaded in real time. This can help to ensure that loans are approved quickly and accurately.

• Document preparation: LOS can help mortgage banks to automate the document preparation process, from generating loan documents to tracking the status of documents. This can help to ensure that all required documents are completed and submitted on time.

• Closing: LOS can help mortgage banks to automate the closing process, from scheduling the closing to generating closing documents. This can help to ensure that the closing process is smooth and efficient.

1. Loan application  Borrower uploads and Loan Officer

1. Appraisal valuation AVM or vendor Appraisal Management System orders

1. Underwriting 

1. Credit approval  interface with various credit companies

1. Documentation upload and organize

1. Pricing engine that pulls the information together

1. Funding and final clear

1. Denial of the mortgage application 

1. Audit after close and to sale

1. Data base, CRM, track information 

1. Cloud based storage with encryption and security

The major providers of LOS for mortgage are:

• Encompass360 owned by ICE Mortgage probably the most well known and employed.

• Calyx Calyx Point, Calyx PointCentral, and Calyx Path

• BankPoint started in 1999 as VSI Solutions

• Newgen Software loan origination system mortgage automator  loan origination and servicing software for private and hard money lenders

• Finflux 

• TurnKey Lender 

•  FLoify

• i-Apply Relational Financial Solutions LMS and AroTRON). 

• Mortgage Automator

• Ncino

• Lending Pad

• Empower BKI

• Baker HIll

• Turnkey Lender Pte. Ltd.

• Loandisk

• LoanCirrus

• BNTouch Mortgage CRM
• Blend
•  Abrigo
• AFS
• Numerated
• Q2
• MeridianLink
• Black Knight Empower
• Lending QB
• Open Close
• Lending Wise
• Capterra
• Accusystems
• 10-Q
• Solifi

Which ones do you like?

Loan origination software and how it works for mortgage banks:

Loan Origination Software: A Must-Have for Mortgage Banks

Loan origination software (LOS) is a critical tool for mortgage banks. It helps automate and streamline the loan origination process, from application to closing. LOS can save mortgage banks time and money, while also improving the customer experience.

There are many different LOS solutions available on the market. When choosing a LOS, mortgage banks should consider their specific needs and requirements. Some factors to consider include the size of the bank, the volume of loans they originate, and the types of loans they offer.

Once a LOS is chosen, it is important to implement it correctly. This includes training staff on how to use the system and ensuring that all data is entered accurately.

LOS can provide a number of benefits for mortgage banks, including:

Loan Origination Software or LOS is a valuable tool for mortgage companies, lenders, and banks.

It is a digital application that provides efficiency, reduce costs, improve the customer experience, and enhance compliance.

Collins V GSE Us vs FHFA

District Court for the Southern District of Texas granted summary judgment to the FHFA on one of the last remaining claims in the Collins v. GSE lawsuit. The plaintiffs in the case, shareholders of Fannie Mae and Freddie Mac, alleged that the government overstepped its authority when it adjusted the stock-purchase agreements with the agencies and allowed net worth sweeps.

The court found that the FHFA had the authority to adjust the stock-purchase agreements under the Housing and Economic Recovery Act of 2008. The court also found that the net worth sweeps were a permissible exercise of the FHFA's conservatorship powers.

This ruling is a major victory for the government and a setback for the plaintiffs. It is likely to make it more difficult for shareholders to challenge the government's actions in the future.

The Collins v. GSE lawsuit is still ongoing, and the plaintiffs have other claims that they are still pursuing. This ruling is a significant blow to their case. I'm of the opinion that if the government didn't poney up with $191 billion dollars in capital injection Fannie and Freddie would not be here. The sweeps were intended to end in 2019 when it was guessed that both would either already have been made back as private companies or one died, or both. We in the mortgage market experienced huge profits in 2020- 2021 with interest rates falling into the two and a half to three percent range. Covid bad news created boom town for mortgage. In 2023 that has turned around to bust. With rates in the sevens and eights thousands of companies have filed bankruptcy and millions of employees are laid off. Back to the real topic- should preferred shareholders get money? If I'm on the jury I say no. Hey I lost $1,421,887 in the crash of 2008 and no one has offered to make me even pennies on the dollar.

Additional details about the ruling:

• The court found that the FHFA had the authority to adjust the stock-purchase agreements because the agreements were subject to the terms of the Housing and Economic Recovery Act of 2008.
• The court found that the net worth sweeps were a permissible exercise of the FHFA's conservatorship powers because they were necessary to protect the financial stability of the housing market.
• The court's ruling is a major victory for the government and a setback for the plaintiffs.
• The plaintiffs still have other claims that they are pursuing, but this ruling is a significant blow to their case.
• I expect we will see more class action cases not less

Legalese::

Plaintiffs claim that the Trump Administration would have ended the Third Amendment but for the unconstitutional constraints on presidential removal. Plaintiffs seek relief on six separate counts. These counts can broadly be split into two categories: (1) removal authority claims (Counts I, III, V, VI), and (2) Appropriations...

Removal authority claims, Plaintiffs request various forms of relief. 

First, Plaintiffs ask the Court to declare that FHFA's structures violate the separation of powers doctrine and declare void the provisions of 

HERA that insulate FHFA's director from oversight. 

Second, Plaintiffs ask the court to enter an injunction restoring Plaintiffs to the position they would have been in if not for the removal restriction, including by directing Defendants to eliminate the liquidation preference and by

the Court to enter an order setting aside agency action maintaining Treasury's liquidation preference or compelling agency action to liquidate the preference. With respect to the Appropriations Clause claims, Plaintiffs ask the Court to declare FHFA's structures violate the separation of powers doctrine and declare void the provisions of HERA that fund FHFA permanently by assessments on regulated entities; vacate and set aside the Third Amendment or the PSPAs in their entirety;  and enjoin FHFA and Treasury from implementing action under the Third Amendment. Finally, Plaintiffs ask for reasonable costs and any other relief the Court