While President Obama’s proposed 2012 budget plan doesn’t specifically target the mortgage interest deduction by name, many believe it could be collateral damage from the 30 percent reduction in itemized deductions on income taxes — which the budget said is necessary to pay for a “three-year patch to prevent an increase in taxes on middle-class families through the Alternative Minimum Tax (AMT).”

The Obama budget plan argues that the reduction “would bring these rates back to where they were during the last year of the Reagan presidency, and if enacted, this provision would be the largest single reduction in revenue-spending since the 1986 tax reform.”

But while most observers agree that the new budget plan could reduce the mortgage interest deduction for some homeowners, they differ on whether this is a good policy for the country and the housing market.

Keep the Mortgage Deduction
“As the leading advocate for housing and home ownership issues, NAR firmly believes that the mortgage interest deduction (MID) is vital to the stability of the American housing market and economy,” said Ron Phipps, president of the National Association of REALTORS® in an official NAR statement opposing any mortgage interest deduction (MID) cuts. “NAR is actively engaged on behalf of the nation’s 75 million home owners and 1.1 million Realtors® to ensure that the current deduction is not modified as was recommended in the Deficit Reduction Commission report.”

Ditch the Mortgage Deduction
“When you look at other countries, like Canada, that don’t have the mortgage-interest deduction, they have similar, if not higher mortgage rates,” said Mark Calabria, director of financial regulation at the Cato Institute, who wants to eliminate the MID. “All it does is run up house prices, which to me makes housing less affordable, not more. It also increases the volatility of prices.”

Courtesy RealtyTrac Agent Newsletter March 2011

]]> http://justinleerealtor.com/?feed=rss2&p=355 0 http://justinleerealtor.com/?p=318 http://justinleerealtor.com/?p=318#comments Thu, 13 Jan 2011 20:33:49 +0000 admin http://www.bestutahrealtor.net/?p=318 During these times of economic uncertainty, many people are waiting to buy a home despite incredibly low interest rates. The solution? We have put together a package deal with our financing partners to gaurantee that your mortgage payment will be made for up to 6 months if you are laid off from your employment in your first 2 years in your home.  Even if you are unemployed on your 23rd month in your home, your mortgage will be covered for up to 6 months!

Contact us for details!

801-410-0375

Most lenders don’t start the foreclosure process until the payment is 90-120 days late. It starts with a “Notice of Default” (NOD). It is an official notice usually sent by certified mail. It triggers what can be as short as a 90 day process that ends in foreclosure sale. Until the date of the sale, Utah law allows you to redeem your home by catching up all the late payments. The lender may choose to negotiate with you to make a payment plan for the catch up (on top of your regular payments). If you run into a lump sum of cash, or suddenly have a significant increase in income, this may be an option for you.

This is the time when a loan modification may be a viable option. If requested, many banks may allow for this option. Some home owners are fortunate enough to effectively negotiate a loan modification on their own. This will constitute a reduction in interest on the mortgage, and subsequently a reduced mortgage payment. This reduced rate may be as low as 2%, but is often temporary: 3-4 years is common. After the initial period is over, the rate may increase incrementally over the following few years to a maximum that is capped. That cap may be lower than the initial rate before the default, so despite the increase, could be better than the initial rate.

You should seek the advice of a professional. However, be very careful as there are a lot of companies that make their money taking advantage of desperate homeowners. I have a few good companies that negotiate loan modifications, but not all homeowners qualify.

If you don’t come to some kind of resolution or modification agreement, the bank will proceed by issuing a “Notice of Sale” (NOS). You are notified that your home has been scheduled for FORECLOSURE SALE on ____(date) at ____(time) .
On the date of the scheduled Foreclosure Sale, your home will be sold to the highest bidder on the County courthouse steps. This bidder may be an agent for the bank itself, or an investor who purchases your home for their own purposes.

Once the Foreclosure Sale is completed and possibly sooner, if you have not already moved out, you will be served with a Notice of Eviction. On the eviction date, if you have not previously vacated the property, a Sheriff or Constable will escort you and your family out, lock up the property, including any personal effects that you have not removed, and change the locks on the property. You will not have access to the property or anything that may be left inside. A third party employed by the bank will then sort through any contents of the property and decide what should be immediately disposed of and what is worth storing for you to claim later. If you do not proceed through the claims process in time, your belongings will be disposed of 30 days after the eviction date.

YOU DO HAVE OPTIONS:
If you wish to avoid this process from proceeding as scheduled, you must act quickly.

In order to avoid foreclosure, you may chose to list your home with a Real Estate professional who specializes in Short Sales in order to pursue a buyer willing to purchase your home on Short Sale.

FACTS ABOUT SHORT SALES

What is a Short Sale?
The term “Short Sale” means that the bank accepts less than they are owed on your home mortgage to sell the home.

What is the Short Sale process?
First, your home is listed for sale by a Real Estate agent. You as the home owner complete a packet of information your bank will need to determine whether your home qualifies for a short sale. Potential buyers will view your home and make an offer. Your agent then submits the completed packet, the offer to purchase, and other required documents to your bank for consideration.

Next, the bank reviews the information and will likely issue a POSTPONEMENT OF FORECLOSURE to allow them time to process the offer. A Broker or Appraiser will walk through your home to determine whether the offer received is a reasonable based on your home’s condition and other comparable sales in the area.

Then, the bank will issue a Short Sale Approval letter to allow the sale to proceed, or a counter offer to attempt to get the buyer to a purchase price closer to their determined market value. If the buyer is unwilling to proceed, your agent will work to get another offer to present to the bank and the process starts over.

How long does a Short Sale take?
Depending on the particular bank or banks involved, whether your home has a second or third mortgage, and other factors, the Short Sale Process could take months. On average, 60-90 days is not uncommon, and the process can take even longer.

Do I have to move out for a Short Sale to take place?
No. While your home is under consideration for a Short Sale, the bank will postpone the foreclosure. Your home will remain yours and you may continue to live there.

What is a deficiency judgment?
A deficiency judgment is the difference between what you owe on your mortgage and what the bank received from the sale of your home. Whether your home is foreclosed, or sold on Short Sale, the bank can and may pursue you for the deficiency and this amount can be tens or even hundreds of thousands of dollars.

How can I avoid a deficiency judgment?
Many families, after losing their home to foreclosure or selling in a Short Sale find themselves in Bankruptcy in order to get relief from the deficiency. An experienced Short Sale agent may be able to negotiate with the bank for a release of the seller (you) from pursuit for the deficiency. This may require some cash from the seller at closing, but may be even less than the cost of filing for bankruptcy.

Will I ever be able to buy a home again?
Yes! Some sellers are able to buy a home again in as little as 1 year after a Short Sale. However, if you lose your home to foreclosure, it may be several years before you are able to buy again.

Is it true that some sellers even get cash from the Short Sale of their home?
Yes. In some cases you may even receive cash from the bank after your Short Sale is completed. This depends on what type of financing was used to purchase your home and your particular financial circumstances and is a part of the Federal Government’s Financial Bailout Plan.

What is the first step to Short Sell my home?
In order to exercise your right to Short Sell your home, you must act quickly by scheduling an appointment with a Real Estate Professional. You will need to do this within 3-5 business days of receiving your NOTICE OF SALE. If you fail to do so, you may be unable to stop your home from foreclosure.

Summary
Most homeowners get into this predicament through a series of unfortunate events often combine with fear to act. The most important thing is to take action! If you are going to avoid foreclosure, you have to make a move.

1. Price it right

Most sellers want to price above the market in hopes of getting tip dollar for their home. This is completely understandable, but in this market is the kiss of death. I have sellers all the time try to outguess the market. In the end, it costs them the sale every time. Pricing your home correctly is the most important key to selling in a down market. If you price too high, buyers quickly pass you by and NEVER look back. So even after the list price has been reduced to where it should have been, the initial interest generated by the new listing is gone and the listing is lost in the nearly 20,000 listings that plague our market.

2. Make sure it shows well

Most buyers begin their search online, so a great virtual tour can really help. Have your home ready for some great pics when you list so they can be seen when it is first listed and generate the showings to get your home sold.

Don’t over clutter! When buyers walk through your home, too much stuff (although valuable and important to you) make your home seem cluttered, crowded, and small. If you are  really going to sell your home, pack up the extra stuff and put it in storage. That way buyers notice your home, instead of your stuff. Wasn’t that the goal?

3. Use a full time Real Estate Professional

In a down market, many agents take part-time or full-time work elsewhere. This is understandable – they do have to feed their family. In listing your home, however, wouldn’t you want to use a full time professional, especially if the fee is comparable? Part time agents have to prioritize their full time job over selling your home. If selling your home is your top priority, why hire and agent who makes it the 2nd or 3rd priority? A full time agent is committing to make their living by helping people buy and sell real estate, which is what you hired them to do. They will have contact with more buyers and a better pulse on the market that a part-timer.

The overall key to selling in a down market is to commit to sell. If you are going to sell now, great. If not, don’t waste your time and your agent’s time and resources by dabbling. You overcrowd an already unprecedented number of listings and it won’t do you any good. Your home will not sell unless you are committed. By pricing right and having your home ready to sell, it can and will sell – even in this market.

That’s right! When you buy or sell with me, you use the truck for free!