An summary update (by CAR.org) on the mortgage relief plan by the federal government, covering an article by The Mercury News:
In his State of the Union Address, President Obama laid out a plan to help responsible borrowers and support a housing market recovery. Details of that plan were released yesterday. However, funding for the proposed program must be approved by Congress, lowering the possibility that it will be implemented quickly. Making sense of the story:
- Operated by the Federal Housing Administration, the plan would allow underwater homeowners to refinance into cheaper federally insured loans. Borrowers with good credit who are current on their loan payments are eligible.
- The measure also streamlines the process of refinancing an underwater mortgage, eliminating the need for an appraisal or submitting a new tax return.
- To qualify, borrowers must be current on their mortgage, have a minimum credit score of 580, and must be refinancing a loan on a single-family owner-occupied principal residence.
- Lenders only need to confirm that the borrower is employed. Loans that are more than 140 percent of the home value probably would not qualify until banks wrote down part of the balance.
- Congress must approve $5 billion to $10 billion in funding, leading housing experts to praise the plan’s objectives with skepticism of it passing this year.
Read the full story from The Mercury News here: “More mortgage relief from the White House – but congressional ‘ok’ doubtful.”
With signs that sales are on the rise for residential real estate, mortgage rates have again dropped to their lowest point in history this week at 3.88% for a 30-year fixed rate mortgage, while 15-year fixed rate mortgage averaged in at 3.17%.
For more details, read Freddie Mac’s article here: “30-year Fixed-rate Mortgage Averages 3.88 Percent“.
Are you still resting comfortably on the fence or are you doing the same thing over and over again–which is the description of insanity!! Get out there now! Prices are great, interest rates are great! What else is there? Oh year, you need a great real estate agent to guide you! Well, since you are reading this and you know I am one with over 20 years’experience, I promise I will not bite!
On the other side of the coin, if you are struggling to make your house payments or about to, I will meet you one on one to go over your situation and help you explore all the avenues to keep your home at no cost. This offer is never made by the so-called gurus or big producer agents personally; you will only meet with their assistants. I have contacts in the legal and accounting arena that are also at your disposal for free, but you will need to contact me for that offer to be complete.
In listing a new property yesterday, the owners that I conferred with were so relieved to know that they have their best option after I counseled and reviewed their situation in detail. The relief and clear mind that was produced cannot have a value placed on it. there are so many options with consequences out there to keep or sell your home, that a consultation is the best prescription.
I am here to help.
If you know someone who is upside down or owes more on their property than it is worth of residential real estate, NOW is the time to really take a close, hard look at the law that has saved millions of homeowners over the past several years: the Mortgage Debt Forgiveness Relief Act that expires on January 1, 2013. Federal and California state guidelines are listed below.
For anyone you know in a modification, I strongly suggest you have your agreement reviewed ASAP with a real estate attorney if you haven’t already. For a referral, I can help; I keep in contact with several top-quality attorneys and accountants. The modification agreement in place may circumvent the Mortgage Debt Forgiveness Relief Act–causing liability for the difference of the home loan on your property of what it is worth, whether you let your home go to foreclosure, or sell the property as a short sale now or after this law expires this year.
Please do yourself, friends, and family a favor–YOU will always be remembered as the knight in shining armor to them if you help them out. And I can always help to answer any questions about this Mortgage Debt Forgiveness Relief Act and the effect it will have on you and them once it expires. Since short sales can take several months to process in some cases, immediate action is necessary, and with that a financial windfall is possible–even if there is no equity in your property. Call me now for details–(619) 890-3648!
Below you will find some of the details pertinent to the Federal and California government laws, but there are others as well (not noted here) that will also be expiring. I am here to help!
New law–Taxable years 2009 through 2012
California law conforms, with modifications, to federal mortgage forgiveness debt relief for discharges that occurred in the tax years of 2007 through December 31, 2012. The amount of qualifying indebtedness is less than the federal amount, and California imposes a state-only limitation on the total amount of relief excluded from the gross income. The following summarizes the differences between the Federal and California provisions.
Federal provision applies to discharges occurring in 2007 through the end of 2012, and:
- Limits the amount of qualified principal residence indebtedness to $2,000,000 for taxpayers who file as married filing jointly, single, head of household, or widow/widower, and to $1,000,000 for taxpayers who file as married filing separately.
- Does not limit the debt relief amount; it only limits the indebtedness amount used to calculate the debt relief amount.
- See the Federal law: Mortgage Forgiveness Debt Relief Act and Debt Cancellation for more information.
California provision applies to discharges that occurred in 2007 through 2012, and:
Taxable years 2009 through 2012
- Limits the amount of qualified principal residence indebtedness to $800,000 for taxpayers who file as married/registered domestic partners (RDP) filing jointly, single, head of household, or widow/widower, and to $400,000 for taxpayers who file as married/RDP filing separately.
- Limits debt relief to $500,000 for taxpayers who file as married/RDP filing jointly, single, head of household, or widow/widower, and to $250,000 for taxpayers who file as married/RDP filing separately.
Taxable years 2007 and 2008
- Limited the amount of qualified principal residence indebtness to $800,000 for taxpayers who file as married/(RDP) filing jointly, single, head of household, or widow/widower, and to $400,000 for taxpayers who file as married/RDP filing separately.
- Limited debt relief to $250,000 for taxpayers who file as married/RDP filing jointly, single, head of household, or widow/widower, ad to $125,000 for taxpayers who file as married/RDP filing separately.
You can read more about the Mortgage Debt Forgiveness Relief Act and Debt Cancellation via the IRS website.