Realty

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10
Jan 12

Deciding on a Short Sale of Your Property to Avoid a Foreclosure

There are options available to owners who can no longer afford to make mortgage payments on their homes. Before bankruptcy or foreclosure proceedings you may want to consider a “Short Sale”.

When a lender agrees to do a short sale it means they are willing to accept less than the total amount that is due for the mortgage. One must be aware though, that not all properties or sellers may qualify for a short sale. If a lender finds it would make more financial sense to foreclose a lender may deny the short sale offer.

If as a seller you find your home is not worth what you thought, you might consider a short sale to avoid foreclosure on your property. If you find for instance your home would sell for ,000 and you owe 0,000 to your lender, your lender may agree to settle your debt for that amount to avoid the foreclosure procedure.

In theory this may seem like the ideal solution for a home owner who finds themselves facing foreclosure proceedings. With the help of a real estate agent to find a new buyer willing to purchase for an amount less than the mortgage, a seller may be able to accept that offer and then ask the lender to accept the new buyers purchase offer. When the lender agrees, the buyer will deliver the funds upon completion of sale, and the foreclosure proceedings are stopped.

There are four requirements to be met first in order to qualify for a short sale. The home owner must know with comparable sales that the home’s market value has dropped and is worth less than the unpaid balance due to the lender. The mortgage has to be in default, meaning the seller has fallen behind in payments. The seller has fallen on hard times. The seller must submit a letter of hardship that explains why he can no longer pay what is still due on the mortgage (examples are unemployment, divorce, illness, bankruptcy, and death). The seller cannot have any assets. If a lender finds that a seller has something he could use/sell to pay for the amount due, he may deny the short sale.

These types of sales do affect credit rating as they are still recognized as pre-foreclosures. Although they are not as bad a rating as a foreclosure or bankruptcy would be.

You must always seek legal consultation before attempting to pursue a short sale. As well a tax accountant can inform you of the amount of “short sale tax consequences” you may incur.

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9
Jan 12

Scott in Granite Bay Ask How to Avoid Short Sale Tax Consequences

Scott in Granite Bay ask how to avoid Short Sale Tax Consequences.

John Lanting: Hello my friends. My name is John Lanting from Keller Williams and this is my business partner Tomas Garcia and we’re here to answer all of your questions regarding short sales. The question for today came from Scott who lives in Granite Bay. And his question is, “How to avoid the tax consequences of a real estate short sale?” Tomas?

Tomas Garcia: Absolutely, very, very informed question. First thing I want to do is I wanted to qualify that I’m not a CPA, okay? However, we addressed this question already because we’re doing short sales. That question have two very important answers depending whether a property is a primary or an investment property. Specific to the primary, there are specific legislations that has been passed to protect you about the debt that is forgiven(ph). In other words, if there’s a 0,000.00 forgiven to that homeowner, if that was your primary residence, that they can be forgiven and there are no tax consequences. If that property is an investment property, things do change because if it’s an investment property that’s not your primary, there can be some capital gains with that and there can be some tax consequences.

However, I think the best and the most accurate answer that I can give is that you would speak to your CPA specific to those questions. Because honestly, as agents, our job is to sell the property, market it, bring in the best possible offer, but those tax consequences can be very real depending on the circumstances of that situation. So speak definitely to your CPA before making a final decision.

Tomas Garcia:: The advice — that’s the advice [Voice Overlap] contact your CPA. Absolutely.

John Lanting: Thank you Tomas.

[Laughter]

Tomas Garcia: We want to thank you very much for watching this video and your time is valuable to us. So again, thank you for your time and once again, our number, don’t forget, (916) 712-6391. Thank you and have a wonderful night.

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1
Jan 12

Internet Banking Made Simple – Swift And Secure For Everybody

For the fastest, most convenient way to manage your financial affairs, Internet banking makes it all easy. There are many more services available today other than just paying bills and looking at your statement.

Although many still feel that this type of banking is dangerous, and that others can see your information, improvements in security have been made in leaps and bounds. Your safety is guaranteed now by most banking institutions and you will bear a zero amount in liability. Your username is unique, your password is secure, and some banks require further information from you, such as a code or key word or number. And they make it as easy as possible for the customer so that one does not feel burdened or intimidated by a system that is not user friendly. You can also change your password any time to feel added security.

Also included in the enhancements to security these days is the elimination of auto complete functions by your browser. This can further ensure that an authorized person or persons cannot see your financial information. And with the zero liability your bank can assure you of safety with your funds and information.

You need computer and Internet access to enjoy on line banking, and your browser will need to be supported by your bank. There are usually no problems with this as most popular browsers are accepted. Further, there is no special software needed at all. At this point, you will only need to register for the service.

You will need a social security number, and a credit or debit card with pin (personal identification number). If you do not have one of these cards, you can use an account number, such as your checking or savings, loan or mortgage account number, or home equity loan number.

If convenience is key for you, you will find that these on line services are wonderful. You may never even need to leave your home, if your computer and Internet access is there. This will save you money on gas and time as far as traveling to your bank. You will find it safe, fast and efficient, and you can do your banking twenty four seven, that is 24 hours per day, and 7 days per week. With on line confirmation notices and reference numbers to the transactions, you can be sure your action went through accordingly.

So what are the services you will enjoy? There is bill paying, of course. But you will also be able to view check transactions, atm (automatic teller machine) transactions, such as payments, deposits and withdrawals, and phone transactions. You will also be able to view your check images and statements for your checking or savings accounts. You might want to apply for a credit card increase, or other accounts or services. And some insurance product quotes, as well as brokerage and investment balances are available to you, as well. As far as online transfers to other banks, these also include credit unions and brokerage accounting.

So check with your banking institution today to make sure that you will receive all of the online banking services and assurances you require when you decide to use Internet banking.

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30
Dec 11

Banking secrets to earn you easy money!

How to manage your bank manager… secrets from the inside.

This is gonna sound a little like bank bashing – and there is a reason for that. Simply put…when you go and see your bank manager does he have YOUR best interest at the front of his mind or THE BANKS’ best interest? We know the answer to that one it’s the Banks best interest – otherwise your bank manager is out of a job. Yet the bank manager as an employee of the bank will do his or her best to appear to be your best friend and trusted banking professional who saves you money.

So when your bank manager appears all friendly and uses sales techniques against you – just remember – he or she works for the bank – not for you.

Ok so what are the sorts of things that they do to ensure that they work in the banks best interests?

Bank Secret number 1.

Ok this is something that EVERY bank will do and by doing this will save you THOUSANDS. When you get a mortgage, they will ask how frequently you want to make payments. If you say monthly… 
they’ll say ‘No Problems” and continue.

If you say Fortnightly…. they’ll say “no problems” and continue.

If you decide to pay fortnightly (AND YOU SHOULD), when you get your mortgage documents, if you are paying attention and haven’t gone glassy-eyed from reading all the legalese, you will see that they will amortise your fortnightly payments across the year so that you pay exactly the same as someone paying monthly. You pay exactly the same over the course of a year.

Now ask yourself why would they do that? Go ahead – ask your bank manager (and remember that he’ll use sales techniques against you) you probably won’t get the REAL answer…. Here it is.

There is 52 weeks a year, 26 fortnights a year…but only 12 months. So by choosing to pay fortnightly (AND NOT AMORTISING THE PAYMENTS) you are in effect making 13 months of payments in a year. You are making EXTRA payments (even though the difference to you is about the cost of a cup of coffee every fortnight). 

By not amortising the fortnightly payments, over the course of a 30 year mortgage, you will make an additional 19 payments earlier than you would normally have done so, and save yourself…72 mortgage payments.

Wait 72??? How is that possible I hear you cry? Because when you start paying your mortgage – for the first decade or so when you make a payment, the largest portion of that payment is paying off the interest – not the principle. Extra payments reduce both the principle and interest portion of the loan – and hence you pay it off that much faster. Don’t believe me? Go ahead ask your bank manager. I haven’t found one yet who’ll give me a straight answer – but they will all blush when they realize they have been caught out.

Bank Secret Number 2 – Banks and interest

DEBT VS LIABILITY
Ok this relates a bit towards Budgeting. Remember when I said that if you want something you plan for it in your budget? A LOT of people of course don’t do that – they use Debt. Debt is VERY different to Liability. Let me explain.

Debt
Lets say you want to go away on holidays to Fiji and laze by the pool drinking Pina Colada’s. You haven’t budgeted for it but you really need that holiday and so you use debt to fund it. Debt is paid for from income that you have not yet earned.Remember to take plenty of pictures when you are on holiday – because you will be paying for it for a LONG time if you use debt.

Liability
Lets say you borrow money to buy an income producing asset. Lets say property. At ANY TIME if you choose you can sell that piece of property to remove the liability associated with it. This is very different to the holiday in Fiji. You cannot sell your memories and holiday pictures to clear your debt. 

What has this got to do with the bank?

Banks prefer you to have debt rather than liability

What? Why would they do that? Because generally debt based products attract a higher rate of interest than liability based products. Your credit card has a high rate of interest in comparison to your home loan. (The bank will tell you that this is because risk assessment says that your credit card is a higher risk of default than your home loan). So why then when you borrow money from a bank do they structure it in such a way as to make it easy to get a credit card, and hard to alter the terms of your mortgage? 

Two reasons. 1) With a higher rate of interest they get more money and 2) It limits their ability to lend

You might scratch your head on that last one so here it is in more detail.

Lets say you have a piece of property worth M and you want 0,000 to go invest it into the share market. You rock up to your bank manager and make the request and he says something along the lines of…”Hmmm investing it into the market? I’m not sure, let me see what I can do I’ll have to ask head office.” (This by the way if you can’t recognise it is a sales technique). Inside the bank manager is jumping up and down, because for loaning 0,000, they now have as security a M asset. This security then lets the bank lend out about a further 2,000 to other lenders. You are most valuable to a bank when you have large assets and small liabilities, because they get to use your assets to make more money on top of the interest that you get charged. Neat eh?

Secret number three – When to borrow from the bank.

I’m probably preaching to the converted here on this forum but Timing is important. It’s important as well when you decide to borrow (or more correctly to receive approval to borrow) because of the way ecomonic cycles work.

Right now (when the share market isn’t great, the economy facing recession, unemployment up etc etc) trying to borrow money is bloody hard. Yet when should we be buying quality assets? When the bulls are running or the bears savaging?

It is of course better to buy quality assets when the markets are rubbish – but as I said, it’s bloody hard to borrow right now. So when should you seek pre-approval on an line of credit against your assets? Answer is when the market is BOOMING. You’ll then have the capacity to invest at the bottom of the cycle that those who don’t have your foresight do not.

Once again be very careful of your bank manager – They will be happy to lend you money at the top of the cycle, just make sure you are getting a facility that you don’t pay interest on unless you draw the funds. You want the capacity to draw, not have the money sitting in the bank account earning less interest than you are paying.

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26
Nov 11

Shorter Short Sales???

SHORTER SHORT SALES?

BofA Reduces Short Sale Approvals To 2 Weeks

I’ll believe it when I see it. Bank of America has been notorious in the past for long, drawn out short sales, but in an ‘exclusive’ webinar this week with BofA top brass the announcement of new policies and procedures to expedite short sale approvals was announced.

“We have some GREAT news for those of you that have your mortgage with Bank of America. I just attended an “exclusive” LIVE webinar with Kimberly Dawson, a Vice President at BofA that oversees their short sale operations. BofA holds almost 25% of the mortgage market and processed almost 100,000 short sales in 2010. They are estimating exceeding that in 2011…….They will close approximately 10,000 short sales per month.

How Bank of American is changing their short sales process?

BofA is “pre-approving” short sales before they are even listed on the MLS. This is much different from the “normal” short sale where we list the home, get a contract, gather all the paperwork, submit to the lender, and then WAIT. BofA is calling this a ‘Cooperative Short Sale.’”

In addition to the ‘pre-approving’ of short sales, Bank of America will also be utilizing a new internet software that will assist with document management and ultimately streamlining the entire process for the bank and short sale processors.

Bank of America’s program to help automate the short sale process
“BofA has also implemented a new web-based short sale tool called Equator (http://www.Equator.com). It is a transaction mgmt system that has GREATLY increased the speed and efficiency of the short sale process. We are very experienced in using the tool and we love it! It has made my life much easier. We used to fax documents to BofA and they would get lost….multiple times! It was a nightmare. No more.”
Ayers, Rich. “BofA is reducing short sale approval to approx 2 weeks!” The Ayers Team. WEBSITE: ayersteam.com/real-estate-blog/bofa-is-reducing-short-sale-approval-to-approx-2-weeks/ January 21, 2011 (accessed January 22, 2011).

Our personal experience with Equator is much less impressive then the article states. Our office handles a lot of short sale transactions and we have seen short sale paper work lost and sometimes Equator feels like a short sale purgatory. It would be great to see Bank of America get their short sale process time frame down considerably. The article also states that the typical BofA short sale time line from open to close is between 1 and 4 months. From our short sale experience, this could not be farther from the truth. Rarely do we see BofA approve a short sale in under 4 months, though we have had some quick BofA short sale closes, most of BofA’s short sales take much longer then 4 months to complete.

Overall, it is good that BofA is changing their short sale process, this part is long over due. Our major question with this new policy change is this…did BofA improve their short sale process because of internal mandates or pending legislation from investors and property owners?

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22
Nov 11

How to Transfer Money Home Fast and Cheap

Step 1

Gather the account number information of your home country bank account that you want to transfer money to and from.

Step 2

Gather the account number information of the bank account in a different country that you would like to transfer money to and from.

Step 3

You can use this system to send money to and from yourself, or to and from your family and friends in other countries for very cheap rates. Much cheaper than normal bank transfers which often charge you + to send money, and sometimes another + to receive your funds. It is also cheaper than Western Union and other types of money wiring services. This is also an alternative to PayPal which is often not available or is limited in many countries.

Step 4

This payment transfer system is called Moneybookers. It’s very easy and you can use it to transfer money to and from almost all major countries.
Sign up for a free Moneybookers account here:
http://www.moneybookers.com/app/?rid=7338020

Step 5

Go here for a step-by-step guided process of the easy registration: http://uk.youtube.com/watch?v=OWr5S7-ur8Y

Step 6

Once you are signed up, you can easily add money to your Moneybookers account online from your bank account and transfer to a bank account in another country. You can also add money to your Moneybookers account from a credit card and transfer to another bank account. It really makes transferring money easy and is a much better and cheaper way to transfer money if you don’t want to pay for all of the bank transfer fees. Note: If you are signing up as a US resident, you should register with the foreign address that you will be sending money to or from. If you are adding a US bank account, you should enter your foreign bank account first, then your US bank account after.

Step7

This is a comparison of the fees to send money via bank transfer, check, and Moneybookers.

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10
Nov 11

Stop Foreclosure How to Use Right of Redemption Laws For Foreclosures

Once your home has been sold as a foreclosure property at an auction, right of redemption laws allow homeowners a certain amount of time to buy their property back. The thing about the law is that it can apply to more than just the homeowner. It can apply to any person that has a legal interest in the property. This could mean creditors as well as lending institutions. The amount of time the homeowner has to buy back or redeem their property can range from up to two years with some being as little as six months.

Right of redemption laws vary from state to state. Foreclosure lawyers can help you when it comes to stopping foreclosure. For those who live in illinoisn the redemption period can be 7 months from the time the foreclosure notice was filed or less depending on the time the final judgement was entered. In california the redemption period is different because it is dependent on how much the property will sell for, as in the case the home sells for enough to cover the mortgage the person will have 3 months to redeem the property. So if the home sells for less than what is owed on the home the period can be one year. 

For homeowners located in Florida the redemption period actually ends the day the property is sold, if the court reviews the sale of the home to confirm fair market value it could prolong the redemption process past the sold date. It is important to note that you will have to pay any outstanding mortgage principle along with interest payments, taxes and cost incurred by the lender.

If you are unable to repurchase the home during the redemption period you can sell your rights to someone else for a few thousand dollars. Some states are non judicial foreclosure which means home loans are collaterized as deeds of trusts rather than as a home mortgage so all sales are final and there is no redemption period after the home is sold at auction.

Non judicial foreclosures are quicker and easier, as well as less expensive, so for a real estate foreclosure investor they will have to take precautions when dealing with states that have redemption laws, it would be to your advantage to purchase the rights of redemption laws from the homeowner directly to maintain control.

Going through the redemption foreclosure process can be daunting, but you will be happy to know that once you default. You are in a positon to stop the foreclosure before your home is sold at auction. Many lenders will help you with a mortgage loan modification or forbearance.

If you find yourself in this situation caused by a wrongful foreclosure  and the holder of the deed to the property is Fannie Mae, try to negotiate with them especially if you are not in a position to pay all that is owed. It may help to work with a foreclosure attorney.

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3
Nov 11

The Future Of Ecommerce Sales Is Promising?but Is Yours?

There is no question that over time, ecommerce sales have continued to rise as more and more people turn to the internet for their shopping. It’s much easier to take a quick commute to your computer, surf the net for a short while, and purchase what you are looking for than it is to go out to a store for the same thing. Because of this, the future of ecommerce sales is looking bright.

The online market is growing at a level far above that of the retail market, which is making anyone with the need to make money turn to the internet. The problem is you aren’t the only one in the world with the idea to start an online business. With millions of people turning to the internet to try and strike gold with ecommerce sales, the competition has become ever so high online.

Anyone can start up an online business with the plan of making a large income.

However, because the competition is so steep, people don’t realize the effort that is required to make it in the internet business. If you have aspirations of becoming another statistic of someone successfully starting up a business online, you have to be willing to put in the effort to reach out to the public.

Without a doubt, the statistics are in favor of those going into ecommerce sales.

In the fourth quarter of 2005, US retail ecommerce sales totaled .5 billion. That was an increase of 27.5% just from the third quarter of 2005. So as you can see, more and more people are shopping online creating the possibility for success in an online business.

With the high competition online, it is essential that you have two things to make it in ecommerce sales; a well thought out plan and a quality marketing campaign.

If you create a website without planning out who your target market is, how you will advertise, and how you can keep in contact with customers, you are setting yourself up for failure.

The more in-depth your plan is to begin with, the better your chances will be of succeeding.

There is nobody saying you have to stick with your plan throughout your business’s existence, but it will help you develop into a money-making site. The marketing campaign is the same way. If nobody knows about your business, how do you expect to make money? The more thought out your marketing campaign is, the better chance you have of generating a higher traffic volume.

Despite the high competition in the internet industry, the future of ecommerce sales is bright.

As more and more people turn to the internet for their shopping, the availability and need for more online businesses will continue to increase throughout time.

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2
Nov 11

Study Sees Racial Makeup in California Complete Foreclosures

With all the fallout surrounding the kind of lending practices that started the recent recession, it’s no wonder that there’s a new group that has studiedcomplete in California and found some interesting statistics.

The Center for Responsible Lending is a nonprofit organization that has found that Latinos are more likely to suffer complete foreclosures than any other group of non-Hispanic borrowers that were studied in California. The study’s findings also indicated that many people did buy within their means and in fact 75% of the complete foreclosures were very modest homes that people bought within their budgets.

The center’s report also went on to find that Latino and African-American borrowers were at a higher risk of suffering with a complete foreclosure because they seemed to be more susceptible to the subprime mortgages that were a large part of the problem in the beginning.

It also looks like a push by various Hispanic groups to have their people enjoy the American dream may have backfired. The US Census Bureau reports that between 2000 and 2007 people of Hispanic background outpaced the rest of America when it came to home ownership. Latinos at that time were pressured by various groups including Hispanic lawmakers to buy at the exact moment when subprime mortgages were beginning to soar.

Although there are various factors contributing to the soaring complete foreclosures in California and nationwide, the fact remains that these homes remain a solid investment. Places like ForeclosureConnections.com have listings of thousands of complete foreclosures in every state in the country as well as a customer service department that is hard at work 24 hours a day seven days a week to serve you.

When you sign up at ForeclosureConnections.com, you’ll also get a FREE Foreclosure Listings Investment EBook that will help you answer many of your questions.

Andrew Jones is an author with great knowledge of complete foreclosures. He has several years of experience in writing about real estate. For more information on complete foreclosures please visit ForeclosureConnections.com.

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1
Nov 11

Avoid Foreclosure by Getting a Loan Modification

Many homeowners these days are facing tough economic times and are finding it increasingly more and more difficult to make ends meet. As unemployment rates around the country continue to spiral upward, homeowners are facing the sobering reality of possibly losing their homes. Many do not know how to avoid foreclosure. Banks are not really cooperating as they should and there are many reasons for that, but the big reason is that banks are not in the business of saving people money. They are huge, heartless corporations and could care less about anything but making money. This is the awful truth but the sooner that homeowners realize this, the faster they will realize that they cannot go directly to their lender to get a loan modification.

There are many reputable, licensed companies that offer loan modification services and you can find them by searching for them on the internet. You can also check up on them easily by going to the department of real estate site and checking their license status and see if there are any complaints or cases against them. You can also go to the Better Business Bureau (also online) and check to make sure there are no complaints. These companies do charge a fee, though most are not allowed to charge an upfront fee. That does not mean that they have to complete the modification before they get paid. It just means that they have to perform some services before they can charge anything. Again, you can check a company’s history and reputation fairly easily.

It is recommended that homeowners employ the services of these professional loan modification experts if they wish to avoid foreclosure. Many homeowners will think they are saving money by going directly to the lending institution and requesting a loan modification but they are taking a big risk. Most banks have very small Loss Mitigation departments and they are overwhelmed with requests from homeowners and from the loan modification companies. Most of the time, homeowners try and follow the steps provided by their lender but without guidance they may not indicate the correct amount of income or allowable deductions, or miss some of the numerous required documentation. When the loss mitigation department personnel open a file that is incomplete they may just automatically decline the modification request or request updated information. Most homeowners do not have the time or patience to follow through with all of these requests and so they just stop trying or they get discouraged once they are declined.

To avoid foreclosure and get a low monthly payment that they can afford they need to be patient and persistent. By going to a professional, reputable company they can avoid the pitfalls of going directly to their lender themselves.

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