Temecula Real Estate, Murrieta Real Estate

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Temecula Murrieta Real Estate is Hot

Category: Real Estate News | Permalink

Published: Monday, May 31, 2010

Can you believe it, June is already here and the kids are getting out for summer vacation. This also means the summer real estate season is upon us. Myself and my team at Pacific Coast Realty have seen a huge increase in buyers over the past month. We have buyers from all over the country moving to California, because they believe it will be the only time they can afford California real estate. Most listings in today's market recieve 5 or more offers and end up selling over asking price. The market for $500,000 homes in Temecula and Murrieta continues to be HOT. Temecula and Murrieta have great access to San Diego and L.A. County, which drives our real estate market.

What is important in today's Temecula and Murrieta Real Estate Market is to control your inventory. What I mean by this is to have a large supply of listings to offer our buyer's. At Pacific Coast Realty Group we always have at least 30 to 40 listings with a number of pocket listings to offer to our clients. Real estate buyer's do not enjoy offering on 5-10 homes and not getting any of them. With our large network of investors we can always offer our clients the widest variety of homes in the Temecula and Murrieta area. If you need help buying or selling a home in the Temecula, Murrieta or surrounding areas, please give us a call at 951-695-9555.

Thank you,

James Brennan

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Penalty Period After Default on Fannie Mae Loan Shortened

Category: Real Estate News | Permalink

Published: Saturday, May 22, 2010

Here is some great news for all my clients who have been asking me this very question. Below are the updates to how Fannie Mae will handle homes previously in default and future purchases. Homeowners who have gone through a short sale or participated in a deed-in-lieu arrangement with their lenders may, beginning July 1, 2010, qualify for new mortgages under Fannie Mae programs in as little as two years from the recording of the short sale or deed-in-lieu arrangement. The current penalty period before recovery of credit is four years.

In order to qualify for the new loan after the two-year penalty period, the homeowner must:

save a down payment of at least 20% towards their new home; and
reestablish a good credit score under Fannie Mae's credit scoring system, which takes into account Fair Isaac Company (FICO) credit scores.

In special circumstances, a homeowner may be able to qualify for a new loan after the two-year penalty period without a full 20% down payment if they can prove that their short sale or deed-in-lieu was due to a special circumstance such as:

job loss
divorce or
medical expenses.

However, as Fannie Mae is requiring homeowners seeking this shortened two-year penalty period to reestablish their good credit under a FICO-based scoring system, non-traditional credit credit history which is not reported in FICO scores, such as rental, utility or cellphone bill payments will be ignored, cutting out a significant portion of the good financial behavior most homeowners established after the financial trauma of a short sale or deed-in-lieu.

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California Legislature Approves Tax Break for People in Foreclosures and Short Sales

Category: Real Estate News | Permalink

Published: Saturday, April 10, 2010

California Legislature Approves Tax Break for People in Foreclosures and Short Sales

The measure, which is expected to be signed by Gov. Arnold Schwarzenegger, would waive state taxes on mortgage debt that has been forgiven in a foreclosure or short sale.

Reporting from Sacramento

Thousands of Californians whose homes were foreclosed on or sold at a loss would get tax relief under a measure approved Thursday by the state Legislature.

The bill would waive state taxes on mortgage debt that has been forgiven in a foreclosure or short sale. It is expected to affect about 34,000 taxpayers.

Gov. Arnold Schwarzenegger said he would sign the measure, which would also provide about $60 million in tax credits to green-energy companies, when it reached his desk. Californians can already claim the tax breaks on federal returns. Lawmakers passed the measure in time for people to take advantage of it by the April 15 deadline for filing tax returns.

"The mortgage-debt tax relief provision in this bill will provide financial shelter for tens of thousands of Californians who have lost their hopes and dreams in the housing market crash, and it's about time we gave these folks a helping hand," said state Sen. Ron Calderon (D-Montebello).

The short-sale provision would mean about $34 million less in tax revenue for the state over three years, according to the Franchise Tax Board.

The "green" credits are a response to the federal American Recovery and Reinvestment Act, which provides grants to firms for power plants that produce renewable energy. The federal government does not tax the grant money. Under the bill approved Thursday, California would provide similar relief.

Other parts of the measure, SB 401 by Sen. Lois Wolk (D-Davis), were called tax increases by Republicans. Even though they supported the tax-relief element, several GOP members of the Senate and Assembly voted against the bill, which was opposed by the Howard Jarvis Taxpayers Assn.

The Republicans objected to a provision that would reduce deductions for charitable gifts, and to changes that would allow the state to tax more income earned by minor dependents.

The changes would also make it harder to qualify a home as a principal residence for purposes of escaping capital gains taxes when the property is sold, and some penalties and interest charges to corporations would be increased, according to Therese M. Twomey, a principal consultant for the Senate Republican Policy Office.

These changes would bring in more than $10 million in new revenue over five years, Twomey said.

"It's an issue of fairness," said Sen. George Runner (R-Lancaster). "You are giving money to one group of people and taking it away from another group of people."

With the plunge in the real estate market, many Californians have found themselves owing much more on their mortgages than their homes are worth. Some have been foreclosed upon or asked their lender to approve a short sale, in which a home is sold for less than the debt, some of which is waived.

The amount waived has been considered taxable income under California law. The measure passed Thursday would eliminate that tax when a bank agrees to accept less than what is owed on a home.

The governor vetoed a similar bill last month because it included a provision, since removed, that would have increased penalties against businesses and wealthy individuals who abuse tax credits.

Business groups including the California Chamber of Commerce and Western States Petroleum Assn. complained that the provision would have made businesses reluctant to claim the tax breaks for fear of making a costly error. The businesses also said California's tax penalties were already tougher than those in other states.

Wolk said the penalties would not have applied to honest mistakes.

The new measure would lift a great burden from the shoulders of Valarie Wood and her husband, who were facing a $10,000 state tax bill on debt that was forgiven in a short sale of their property in Ventura.

The 10-acre property, which included an avocado grove, had plummeted in value far below what they owed.

Health problems and a "mortgage gone awry" forced the couple to renegotiate their loan with their bank, which agreed to waive about $300,000 of debt on the house and property, Wood said.

"We've lost our dream home. We are in our 60s, and it was going to be our retirement," she said, her voice choking with emotion. "This bill is crucial for people like us. We are extremely relieved."

Schwarzenegger said during a news conference Thursday that he wants to give homeowners and businesses "the relief they need."

"We want to be helpful in every way we can, so we will sign it," he said.

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California Homebuyer Tax Credit 2010

Category: Real Estate News | Permalink

Published: Tuesday, April 06, 2010

Applying for the 2010 New Home/First Time Buyer tax credits: Applications must be submitted after escrow closes. The new application will be available by May 1, 2010. We will deny the application if the 2009 form is used or if we receive the 2010 application before May 1, 2010.

Check this page often. We will add updates as they become available.

General Information: These tax credits are available for taxpayers who purchase a qualified principal residence on or after May 1, 2010, and before January 1, 2011. Additionally, these tax credits are available for taxpayers who purchase a qualified principal residence on or after December 31, 2010, and before August 1, 2011, pursuant to an enforceable contract executed on or before December 31, 2010. The purchase date is defined as the date escrow closes.

These tax credits are limited to the lesser of 5 percent of the purchase price or $10,000 for a qualified principal residence. Taxpayers must apply the total tax credit in equal amounts over 3 successive tax years (maximum of $3,333 per year) beginning with the tax year in which the home is purchased. The tax credits cannot reduce regular tax below tentative minimum tax (TMT). The tax credits are nonrefundable and unused credits cannot be carried over.

The total amount of allocated tax credit for all taxpayers may not exceed $100 million for the New Home Credit and $100 million for the First-Time Buyer Credit. However, since many taxpayers will not be able to utilize the entire tax credit, the legislation specifies that the $100 million cap for the New Home Credit will be reduced by 70 percent of the tax credit allocated to each buyer and the $100 million cap for the First-Time Buyer Credit will be reduced by 57 percent of the tax credit allocated to each buyer. We will allocate the tax credits on a first-come, first-served basis.

Only one tax credit is allowed per taxpayer. If a taxpayer qualifies for both tax credits, the law specifies that we will allocate the amount under the New Home Credit.

Taxpayers will not be eligible for either tax credit if any of the following apply:

The taxpayer was allowed a 2009 New Home Credit.
The taxpayer is under 18 years old. (A taxpayer who is married as of the date of purchase will be considered to be 18 if the spouse/registered domestic partner (RDP) of the taxpayer is 18 or older on the date of purchase.)
The taxpayer or the taxpayer's spouse/RDP is related to the seller.
The taxpayer qualifies as a dependent of any other taxpayer for the tax year of the purchase.

New Home Credit: A qualified principal residence, for purposes of the New Home Credit, must:

Be a single family residence, either detached or attached.
Have never been occupied. Sellers must certify that the home has never been occupied in order for a taxpayer to receive an allocation of the credit.
Be eligible for the California property tax homeowner's exemption.
Be occupied by the taxpayer as their principal residence for a minimum of 2 years immediately following the purchase.

Tax credit allocation:

A Certificate of Allocation will not be issued if:
- The seller does not certify the home has never been occupied.
- We do not receive the application and a copy of the properly executed settlement statement within 2 weeks (14 calendar days) after the close of escrow.
- We receive the application or reservation request after the total tax credits available have been allocated.
FTB's determination may not be protested or appealed.

First-Time Buyer Credit: A qualified principal residence, for purposes of the First-Time Buyer Credit, must:

Be a single family residence, either detached or attached.
Be eligible for the California property tax homeowner's exemption.
Be occupied by the taxpayer as their principal residence for a minimum of 2 years immediately following the purchase.

A first-time buyer is any individual (and the individual's spouse/RDP, if married) who did not have an ownership interest in a principal residence during the preceding 3 year period ending on the date of the purchase of the qualified principal residence.

Tax credit allocation:

A Certificate of Allocation will not be issued if:
- We do not receive the application and a copy of the properly executed settlement statement within 2 weeks (14 calendar days) after the close of escrow.
- We receive the application after the total tax credits available have been allocated.
FTB's determination may not be protested or appealed.

Applications: We will accept applications beginning May 1, 2010. Do not use the 2009 application. We will post more information by May 1, 2010.

Reservations: Taxpayers who qualify for the New Home Credit may, but are not required to, reserve a tax credit prior to the close of escrow. Reservations will become important as we near the $100 million cap for homes that may not close escrow before the cap is reached. To reserve a tax credit, the taxpayer and seller need to complete, sign, and submit to us a reservation request to certify that they have entered into an enforceable contract on or after May 1, 2010, and on or before December 31, 2010. A copy of the signed contract must be included with the reservation request. We will post the reservation form and details about the process by May 1, 2010.

If you are only applying for the First-Time Buyer Credit, you will not be able to reserve the tax credit before escrow closes.

Claiming the tax credit:

The taxpayer must receive a Certificate of Allocation from us to claim the tax credit on their California personal income tax return. The Certificate of Allocation will state the maximum amount the taxpayer can claim listed by tax year.
The taxpayer should refer to the 2010 New Home / First-Time Buyer Credit Publication for instructions on claiming the tax credit (the publication will be available by December, 2010).
Special rules apply to married/RDP taxpayers filing separately, in which case each spouse/RDP is entitled to one-half of the tax credit, even if their ownership percentages are not equal. For 2 or more taxpayers who are not married/RDP, the tax credit amount will have already been allocated to each taxpayer occupying the residence on their respective tax credit allocation letter.
If the available tax credit exceeds the current year net tax, the unused tax credit may not be carried over to the following tax year.
The tax credit may not reduce regular tax below TMT.
The tax credit is not refundable.
Any disallowance of the tax credit may not be protested or appealed.

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Loan Modifications Are A Bust

Category: Real Estate News | Permalink

Published: Tuesday, March 16, 2010

It is a well known fact that lenders and loan servicers have a marked aversion to loan renegotiations. Lenders do everything they can, and often deliberately avoid doing anything at all, to escape direct contact with the borrower. Federal incentives to encourage loan renegotiation have had low-level and mixed successes, at best; at worst, the loan modifications that result tend to lead to eventual foreclosure. The vast majority of homeowners who do achieve some form of loan modification are unable to reduce (cram down) the balance on their loans, and most redefault on their modified mortgages within six months.

It is an equally well-known fact that foreclosure is an expensive process for lenders and, under 2010 resale market prices, dramatically more expensive and (once initiated) unstoppable than any lost income from an individual loan modification. This second fact has led to some confusion among policy-makers and economists, who cannot comprehend lender rationale for avoiding loan modifications. A variety of economic hypotheses exist to explain lender aversion towards modifications, but policy makers are only beginning to comprehend the basis for this somewhat counterintuitive situation.

One of the most common explanations for the general failure of mortgage holders to renegotiate real estate loans in the face of high foreclosure and real estate owned (REO) resale costs is the high degree of securitization in the current mortgage markets. As loans were bundled into pools funded by Wall Street bankers' issuing mortgaged-backed bonds (MBBs) to thousands of investors, and ownership within the pools was divided between assorted parties (tranches) with differing priorities for claims on principal and interest, it became more difficult for those assorted tranches to agree to act in unison to prevent foreclosure, even when such an action was in their best interest. Much current policy, such as the federal Making Home Affordable (MHA) Plan, is based on this theory: if the road is cleared by small incentives, economists seem to say, lenders will rush to help buyers, and help themselves in the process.

My goal is to help as many people as I can by given them some options before they walk away from their homes or even answer any questions you have on the list below.

How long do I have once I get a Default Notice?
How long do I have once I get a Notice of Sale?
Can a notice of sale be postponed?
Should I just walk away from my home?
Should I short sale may home and why is that an advantage for my credit?
The truth about loam modifications?
Should I go with an attorney that uses Forensic Audits to do loan modifications?
The truth about lending laws (Tila, Respa, Reg Z)?
Don't ever pay up front for a loan modification, until you know you qualify.
How does a short sale work?
The advantage of a short sale over a loan modification?