House Squatters – Temporary epidemic or here to stay with chronic homelessness?

Beware of leaving your house vacant when trying to sell it…or even for any extended length of time.

Scammers can enter your house, change the locks with new keys, run ads in Craigslist or other places and get $$ from unsuspecting tenants and they can move into the home immediately and you might have to go to court to remove them from YOUR home!

Squtters in Georgia have right to stay in house?

Note: Follow up to the story – there is some confusion…when one attorney is asked, he said that “mediation between the parties is mandatory”…but when homeowner finally asked the Cobb County District Attorney, the decision there was criminal trespassing…this needs more clarification in state and local laws…

Sacramento realtors say squatting is on the rise.

Las Vegas realtors packing heat for protection against squatters.

In Los Angeles, a condo could be lost to squatters?

Punta Gorda squatters vacate woman’s rental home.

Neighbors fed up with squatters in Fresno neighborhood.

Realtors, neighbors concerned over increase in squatters across Albuquerque.

Property owner arrested in squabble with squatters in Germantown.

Neighbors say squatters are trying to take over a Myers Park home.

Some states are paying attention to this…others are in confusion.

New Washington State law to streamline process of removing squatters from homes. Police say if you own a vacant home, make it look like someone lives there. They recommend mowing lawns, turning lights on, and posting “no trespassing” signs.

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Daily Access Brokerage Real Estate News

7-24-2017:

Post #1: Freddie Mac news: Home prices are up, inventory is down. And that just means there’s a free market system in residential real estate…somewhat free.

Post #2: Illinois borrowed $17 billion to pay pensions that are unfounded by $130 billion…Chicago public schools borrowed $400 million @6.4% to pay pension obligations.

7-21-2017: How to Buy a Home.

7-20-2017: Sacramento realtors say squatting is on the rise.

7-19-2017: Foreigners buy record number of U.S. homes despite fears of immigration crackdown .

7-18-2017: Focus on Finance: When do you need a real estate survey? Note: Be sure to check with your closing attorney to determine impact on your enhanced title insurance coverage.

7-17-2017:

Post #1: Legislature passes construction defects legislation.

Post #2: Almost Half of Americans Have Buyer’s Remorse About Their House.7-14-2017:

Post #1: The difference between a real estate market correction and crash? Hint: 10% drop – more or less.

Post #2: Attorney pushes back on allegations against real estate agent.

Post #3: 7 Key Things That Help You Qualify For A Mortgage.

7-13-2017:

Post #1: A bizarre co-working scheme and the global rise of online real estate fraud.

Post #2: Focus on Finance: When do you need a real estate survey?

7-12-2017:

Post #1: 5 Tips for Tenants Renting a Foreclosure Property.

Post #2:Ask these questions before choosing a Realtor”.

Post #3:
Action 9 investigates a real estate secret that can haunt homeowners in Florida – open building permits from 28 years ago
.

7-11-2017:

Homeowners get taxed – California State Senate approves real estate transaction fee to fund more affordable housing.

7-10-2017:

Post #1: Indianapolis tightens rules to force landlords to clean up trashy houses, but realty agents say it won’t matter.

Post #2: NAR said 2016 may be best year for existing home sales volume since 2006 WSJ-8-25-16, C8 (Probably because new homes are so damn expensive.)

7-7-2017: June 28, 2017 WSJ, Page B8 Worker Shortage Squeezes Developers – About 2/3 of developers surveyed said they are having a challenge to finish jobs on time since they can’t find qualified contractors for concrete, interior finishing, masonry, electrical and plumbing. (My comment from experience and what I’ve witnessed in real estate: “NO”, illegal immigrants don’t have those skills either since most learn “on the job” what the developer/builder wants done.

7-6-2017: Protecting Yourself During a Move.

7-5-2017: Delaware raises its transfer tax to 4% of property price at closing. How will it affect the state’s economy? What is the transfer tax in your state? In Georgia, it is currently $1.00/$1,000 of property price paid at closing.

6-30-2017:

Post #1: Real estate broker accused of taking items from home. Allegedly sold $400,000 worth of personal and household belongings without homeowner’s permission.

Post #2: Fake Florida Board of Realtors scam alert. Elaborate scheme to get realtors to send $200+ to criminals.

Post #3: Scumbag Alert: Real estate agencies contacted by man attempted to lure women to properties. I assume this happens in other instances since some realtor photos make a female agent appear to be a sexy or more provocative looking female. Some photos I’ve seen makes realtors look like whores!

6-29-2017: Ontario proposes banning real estate agents from representing seller and buyer – Will the US follow the same path?

6-28-2017:
SCAM ALERT: Fake REal Estate Board targets REALTORS® again
!

6-22-2017: WSJ, May 30, 2017, Page A1 – Credit Picture Brightens…At least 6 million people will have their personal bankruptcies removed from their credit picture in the next 5 years.,,,Average FICO credit score in the US was 700…Mortgage foreclosures usually stay on credit reports for 7 years and personal bankruptcies stay for 7-10 years…Chapter 13 bankruptcies (those who work out payment plans) stay for about 7 years.

6-20-2017: Zillow’s real estate ‘Zestimates’ under fire. An Illinois real-estate broker filed a lawsuit based on the Zestimates and their accuracy. Even though Zillow offers disclaimer about acccuracy of Zestimates, people often use these estimates as real property values.

6-19-2017: Passive Income Is Great, But Are You Really Cut Out To Be A Landlord?

6-16-2017: Billionaires Beware: Taxpayer Funded Stadiums Nearing the End Zone.

6-15-2017: Using the Reverse Mortgage to purchase a home. Get a reverse mortgage loan of between 47% to 52% of the purchase price of the new home. It may be required to sell your current home to make the remainder of down payment.

6-13-2017:Buy A Home With A Reverse Mortgage.

6-12-2017: Treasury report expected to be harshly critical of consumer agency – The Consumer Financial Protection Bureau is targeted for disassembly and disposal.

6-10-2017: Homebuying secrets from the real estate battlefield.

6-9-2027:

Post #1: 8 Rookie Mistakes That Keep People From Selling Their Home.

Post #2: Real estate agent accused in killings prompts new law in South Carolina – and maybe across the country? Even though the application forms ask about previous federal criminal history, many states do not perform background checks as a condition of real estate licensing.
6-8-2017:

Post #1: Passive Income Is Great, But Are You Really Cut Out To Be A Landlord? .

Post #2: FHA has recently imposed requirements that to be eligible for an insured FHA loan, the association’s financial reserves must equal at least 20 percent of their annual budget.

6-7-2017: Zillow’s “Instant Offers” disrupts real estate community.

6-6-2017: . Case was dismissed on a technicality….bummer!

6-5-2017:

Post #1: Top 10 Markets With the Highest Hidden Costs of Owning a Home.

Post #2: >New Home Prices Are Falling—So Why Are There Fewer Sales?

6-3-2017: The pros and cons of using drones in the real estate business.

6-2-2017: How to Get Denied for a Mortgage After Preapproval. (Hints: Employment-debt-moving money – credit score changes too much.)

6-1-2017: 10 Crucial Real Estate Contract Terms Home Buyers Should Know Before They Sign.

5-31-2017: ‘Will An Exclusive Buyer’s Agent Really Look Out for Me?’

5-30-2017: 3 home insurance myths you need to dispel. Not everything is covered-no; flood insurance-no; and market value insured-no…

5-26-2017: Real estate agents share dos, don’ts for buyers, sellers.

5-24-2017: New home sales are down over 11% in April but national Association of realtors said that we’re on a slow and study upward trajectory on existing homes and the supplies of new homes should be rising as well. This should be good news for those that are in the market search for better inventory and for sellers to move to more choices. Source: WSJ, 5-24-2017, page A2.

5-23-2017:

Post #1
Zillow’s next step may disrupt real estate brokerages.

Post #2:

Three Things Home Buyers Should Never Do

5-22-2017: First-time buyers are snatching up homes in droves.

5-19-2017: How to Get Along With Your Contractor.

5-17-2017: The biggest regrets people have after buying a home. Not buying a bigger house. This was the No. 1 regret listed in studies. About 41% of homeowners said they were not aware of all of their loan options. About 1 in 5 home buyers wished they had had more information about their homes. Other findings in report from Nerdwallet were interesting.

5-16-2017:

Post #1: Real estate’s new normal: homeowners staying put.

Post #2: About 4% of employers offer mortgage assistance to relocating employees; 3% offer down payment assistance; 8% offer reimbursement of fees paid to real estate agents. The movement of employers now is to offer a lump sum amount to employees and not detailed coverages. It is suggested that employees try to negotiate for the best deal and consider the income tax implications of a lump sum payment for relocation. WSJ 5-5-17, Page M4.

5-15-2017: Real Estate’s New Normal: Homeowners Staying Put. The median length of time people have owned their homes rose to 8.7 years in 2016, more than double what it had been 10 years earlier. And now that interest rates have begun to turn up from their historic lows, the housing market may face a problem called “the lock-in” effect, where homeowners are reluctant to move, since moving might entail taking out a new mortgage at a higher rate.

5-12-2017:

Post #1: Do Schools Really Impact Property Values? YES…YES…and YES!

Post #2: 7 Snapchat tips for agents (i.e., How to better market to millennials).

5-11-2017: Is the Traditional Real Estate Model Under Pressure? (California may BAN Dual Agency?)

5-10-207:

Post #1: 3 Big Things Home Buyers Are Looking For In Their New Home .

Post #2: Efforts to overhaul Fannie Mae and Freddie Mac could lead to “a potential and significant shock” to the commercial real-estate sector.

5-9-2017: Homeowner sues Zillow, says ‘Zestimate’ is nonsense.

5-8-2017: A drop in new home construction (labor shortages, increased zoning regulations, rising prices of building materials, and caution among builders) and strong demand from Buyers pushing prices up is causing National Home Price Index to rise. With small chance of supply gut in near future, economists expect prices to continue to rise. Nationally it is estimated that home prices are 4% overvalued.
Source: Rising Home Prices Stir Overheating Fears – WSJ, 4-26-2017, Pge A2

5-5-2017:

Post #1: Arzona Real estate agent sick of burglaries drives into man he believed was stealing.

Post #2: 10 Most Common Real Estate IRA Questions Asked by Investors.

5-4-2017:

Poat #1: Home Values in 2017: Are We Facing A Real Estate Bubble?.

Post #2: Real Estate Sale: First 4 Steps After Deciding To Sell Your Home.

5-3-2017:

Post #1: NAR report highlights growing appraisal problems. Also, combined with financing issues comprises over 50% of issues preventing closings. Over 50% of mortgage originators interviewed in a separate survey said they had experienced difficulty with appraisals. But is this the fault of appraisers, or agents/homeowners pricing their homes too high?

Post #2: Are Your Title Insurance Fees Paying for Rangers’ Playoff Tickets?

5-2-2017: Minnesota Commerce Warns of Wire Scam involving Real Estate – spreading across the US. The scam profile: Criminals hack into the computers or email accounts of real estate professionals; find out when closings are happening; then send fake email containing instructions to wire funds to a different account. This works pretty well since most all closing attorneys don’t accept Certified Checks any longer for funds since they can’t be verified as legitimate.

5-1-2017: Rental-home success depends on quality of tenants.

4-28-2017: Should You Use a Real Estate Agent to Find Your Next Rental?

4-27-2017: Real Estate Lawyers Applaud New Jersey Supreme Court’s Ruling on Email Notice.

4-25-2017:H1-B Visas – can we have the evidence that US citizens are even considered?

4-21-2017: Commercial Lending Falls Amid Growing Risks.

4-20-2017: Why world tensions are making mortgages cheaper.

4-19-2017: Using Smart Home Devices to Help Seniors.

4-18-2017: What Happens When a Buyer Backs Out Last-Minute.

4-17-2017: What a New Glass-Steagall Act Wouldn’t Do.

4-14-2017: Homeowners and appraisers disagree on home valuations.

4-13-2017: Appraiser Opinions Keep Falling Short of Homeowner Expectations…ut some cities are bucking that trend.

4-12-2017:HUD Administrative actions against mortgage lenders.

4-11-2917: America now divided over Bible verses. And I would say to those who ask “what does this have to do with real estae?”…well, He’s Got the Whole World in His Hands!

4-10-2017:Real Estate Advice: Shop around for the right mortgage.

4-7-2017: U.S. Property Taxes Levied On Single Family Homes In 2016 Total More Than $277 Billion.

4-6-2017:Buyer Beware: Real estate scams exposed.

4-5-2017: Mortgage interest rates respond to the 10 year Treasury notes since most homeowners stay in their homes closer to 10 years than what used to be the typical 30 years.

4-4-2017: Hidden Costs That Can Diminish Your Rental Property Profits.

4-3-2017: Cost of Construction permitting has risen over past decade including storm water capturing devices, customized architectural plans, and $15,000 to remove a tree on a property, as well as other new regulations. The average cost of compliance with regulations has risen 30% in the past 5 years. WSJ, July 23-24, 2016.

3-31-2017: ‘No Knock’ Registry Is a Jab at Real Estate. Is this coming to a town near you? Doe it also include mailings and posted advertisements like “We Buy Houses”?

3-30-2017: Veteran with A Purple Heart received a free house. Isn’t that good news? Wells Fargo said that since 2012, the bank has donated about 300 homes, with a value of more than $50 million, to veterans in all 50 states. Wells Fargo has donated more than 200 through the Military Warriors foundation.

3-29-2017: FHA lost > $300,000 in transactions for three properties. Freddie Mac, also lost about $164,000 and Fannie Mae was allegedly also defrauded out of > $15,000.

3-28-2017: Real Estate Commissioner in California Issues Warning To Agents and Brokers – This warning also applies to all Brokers and Agents across the US.

3-24-2017:
Buyer Beware: Real estate scams exposed
. Never wire money to anyone in a real estaet transaction unless first verifying the Bank and Account info is legitimate.

3-23-2017: 10 Secrets to Selling Your Home Faster.

3-22-2017: How millennials are changing the real estate market. Millennials are in fact very civic-minded and believe in equality for all…willing to buy a smaller place in a less desirable area …increasing number of millennials accessing the internet exclusively on mobile devices, agents should also look into marketing avenues and mobile apps that could enhance their businesses.

3-21-2017: Ask the HOA Expert: Mold Conditions.

3-20-2017: What are Atlanta’s real estate hotspots of 2017?

3-16-2017: 4 Common Real Estate Scams That Smart People Fall For.

3-15-2017: After peaking at all time high of 69.2% in 2Q04, the US homeownership rate fell in 2Q16 to 62.9% (lowest rate in 50 years) but more likely skewed by the higher rate of renter household formation. WSJ, 7-29-16, A2. However, by January 2017, the rate has risen to 63.7%. Encouraging sign of growth?

3-14-2017: MBA Reports Double Digit Jump in New Home Purchase Applications.

3-13-2017: Understanding VA Minimum Property Requirements.

3-10-2017: Utah real estate agent gets 6 months in jail over waterless subdivision.

3-9-2017: 7 Things You Can Do Now To Instantly Up Your Home Value For Under $100.

3-7-2017: Should You Work With a Part-Time Real Estate Agent?

3-6-2017: How pot is firing up this real estate. A Cannabis REIT? – Innovative Industrial Properties, Inc. (IIPR)

3-2-2017: Retirement: Can I use my IRA to buy real estate?

3-1-2017: Six arrested in ‘elaborate’ real estate fraud scheme.

2-28-2017: Gap between housing affordability and availability will grow in the months to come. The National Association of Realtors (NAR) suggests homebuyers at many income levels could see an inadequate amount of listings on the market within their price range in coming months.

2-27-2017: Tight inventory of homes on the market causing decline in sales you say???? Yeah, plenty of crap homes on market and not enough decent inhabitable homes for decent prices…everybody wants alot for the crappy homes!

2-23-2017: Existing Home Sales and Prices Surge Despite Rate Increases

2-22-2017: Governing documents in a Condominium are similar to HOA CCRs in a subdivision and restrict your use of common elements and sometimes inside your home.

2-20-2017: U.S. Congress passed a law years ago that first time home buyers who purchase a home between April 9, 2008 and July 1, 2009 would be eligible for a $7,500 tax credit. As I understand it, $500 tax credit per year for 15 years or until the property ownership is transferred. If the ownership transfers prior to the 15 year period, then all cumulative tax credits are now owed to and to be paid back to the IRS upon ownership transfer. Furthermore, the US Congress passed another bill that made those first time homebuyers who purchased homes after December 31, 2008 and before December 1, 2009 would now be eligible for an immediate $8,000 non refundable (isn’t required to b paid back to the IRS) tax credit. I wonder how many homeowners are stuck in this position now that home prices are returning to re-crisis levels and they are ready to sell their homes and move?

2-18-2017: Six Reasons Why Wholesale Repeal of Dodd-Frank is Unlikely.

2-17-2017: 2016 Homebuyer Survey Contains Valuable Information For Agents and Home Sellers.

2-16-2017: Distressed Asset Stabilization Program (DASP) = 105,000+ loans sold to private investors & 10,000 remained in homes – worth taxpayer payout? Also per WSJ, 7-1-2016, A2 article – homeowners got to stay in 20% of the DASP homes. Regardless of actual %, was the payout from US taxpayers (via lower sales price of loan and through FHA loan losses) worth it?

2-15-2017: Realities of Real Estate: What’s the value of improvements when a home is sold? .

2-13-2017: Before anyone blames Trump for playing favorites with mortgage lenders, it was Fannie Mae and Freddie Mac (or more correctly Mel Watt (an Obama appointee) in charge of FHFA approved it. Fannie and Freddie agreed to arbitration over appeals from lenders in cases where Fannie and Freddie accused lenders of loan mistakes and compel them to buy back the mortgage loans. The result is that if lenders have a path to prove their innocence in arbitration, then they are more willing to make loans. Source: WSJ, 2-3-2016, Pag C6.

2-10-2017:Here’s Why More Millennials Are Living With Mom and Dad.

2-6-2017: Countertop Pros And Cons: What To Choose And Why.

2-3-2017: Question of the day: When a life insurance policyholder dies, is it up to the insurance company or the beneficiary to follow up to ensure payment?

2-2-2017: By 2020 there are forecast to be 54 million 55-plus households in the U.S..

2-1-2017: Hey – wait a minute….California residents demand repeal of zoning laws to provide more housing?

1-31-2017: YEs – yes, I know this the topic of REITs or Real Estate Purchase and Leasebacks aren’t my typical thing, but I found this a little humorous and sad at the same time. Online transactions are crushing “brick and mortar” retailers like Macy’s and Sears. But there is hope for future revenues and expenses. Macy’s is now partnering with Brookfield (property management company) to offer 50 real estate properties (100 more to come in 2017) for subleasing or development for other retailers or companies thereby generating lease revenue. Sears has created Seritage Growth Properties (who bought almost 300 Sears/Kmart properties and rents most back to Sears) to use their real estate assets to generate income as well. Sears and Macy’s got some level of cash infusion selling these properties and now are in a position to terminate any long term leases of stores that are not profitable. However, they have a good idea to sub-lease space in their stores for products and services that “can” make money and therefore, pay “rent”. AJC, 1-29-2017, Buyer’s Edge, Page 4.

1-30-2017: Real estate investors (many are small companies) may lose important tax tool – Section 1031 deferred tax exchange. US Congress may eliminate or seriously restrict the use of tax-deferred exchanges – property swaps – under Section 1031. This applies to commercial & rental properties only – Fixer-upper houses and other real estate held for short periods and then flipped to new buyers do not qualify for tax-deferred exchanges, nor do owner-occupied residences.

1-27-2017: Explanation of duties between Listing Agents and Buyer Agents.

1-26-2017: Post #1: City of Chicago to expand $1 lot program to 4,000 vacant properties.

Post #2: How to buy a property without a real estate agent.

1-25-2017: U.S. Home Affordability Drops to 8-Year Low in Q4 2016.

1-24-2017: 2016 Saw Mortgage Distress Recede Strongly.

1-23-2017: Where were home sales most likely to FAIL in 2016?

1-20-2017: Trump suspends the January 9th FHA mortgage insurance rate reductions on day of Donald Trump’s inauguration. Why? Congressional Republicans believe the fund isn’t sufficient to cushion taxpayer bailouts during any economic downturn since these loans are more risky than conventional loans.

1-19-2017: 6 Questions to Ask Your Real Estate Agent Before Buying a Home?

1-18-2017: Developer building up a portfolio by creating housing for millennials.

1-12-2017: Real estate scam bilks buyers, sellers during transactions. Email hackers and spoofers will pretend they are from closing attorney or real estate offices and send an email to you reportedly stating there has been a change of financial institution routing information. Normally, you may follow those instructions. However, you should call the closing office to verify any financial institution routing transaction information first before you execute any wiring transmission to the closing office. Cybercriminals who have hacked into the email accounts of real estate brokers, title companies and consumers who are in the process of buying or selling a home.

1-11-2017: Foreclosures Approach Normal Level.

1-9-2017: Breakdown of FHA’s Multifaceted MIP Cut. Annual FHA MIP drops by 25 bps effective February 1st and beyond.

1-6-2017: A New Twist on Owner Occupancy Fraud.Borrowers are applying for loans with the stated intent of investment property, using rent income to qualify for loan, then moving into property as personal residence….mortgage fraud!

1-5-2017: Buying More Affordable Than Renting in 66 Percent of U.S. Housing Markets.

1-4-2017: Banks make house flipping easier for investors.

12-31-2016: Wish for a Happy New Year in 2017 for you!

A SELECT FEW OF THE THOUSANDS OF FORECAST VISIONS for 2017 REAL ESTATE

Vision #1: Real estate agents predict low inventory levels in 2017.

Vision #2: What’s ahead for 2017? Headwinds form in real estate boom-bust cycle.

Vision #3: Speical Inman Report – Outlook for 2017 Real Estate. See full Inman Real Estate Report for 20176 here.

Vision #4: Rising interest rates in 2017 may not matter in housing demand and prices.

Vision #5: These 5 Trends Will Shape the Housing Market in 2017.

Vision #6: Top 5 real estate trends for 2017.

Vision #7: 2017 Real Estate could be bumpier. Although it’s not true that TRID has been implemented smoothly (there are still errors and as an agent, I don’t receive document before closing so when I see mistakes, it’s too late!) Interesting that PMI will no longer be tax deductible.

References to articles, sources, products, or services are not a specific endorsement and not guaranteed to be true or accurate, but the user must perform their due diligence and investigate whether the information provided is valid, or the product or service is right for them. I welcome any or all comments that would help others. Be careful – if it sounds too good, it probably is!

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Complaints about real estate agents – legitimate or reflection on client poor choices?

Volumes can be written on this subject alone…and “the cloud” is already filled with so much data, those volumes are not necessary. And there are those times where you blame your current or previous real estate agents for some type of errors or omissions in judgement or observations that if done appropriately at the right time, could have spared you grief at some level. Stuff like no coat closet on main floor of a house Mortimer rubs against a buyer…or not telling the Buyer about current events in the neighborhood or what was happening around them in the near future…or defects in the house that the agent may have been aware of before purchase but not a severe nature…or just caused more expense fixing it after closing than desired.

But are complaints legitimate, or just a reflection on the poor choices made by the Buyers or Sellers?

Each agent/broker pays money each year for what’s called professional “Errors and Omissions” Insurance. This covers some insurance for thefts through lock-boxes, errors or omissions in contracts, or performance of services. But like all other insurance coverage, it comes with a deductible and doesn’t cover ALL issues.

Bottom line: It’s difficult to prove complete incompetence and what the Agent knew or didn’t know before closing.

So…Buyer and Seller Beware – Be informed and perform your Due Diligence.

Let me know your thoughts.

Source of inspiration for post: Where to turn when you have a problem with your real-estate agent. Even though this article dealt with Ontario in Canada, complaints against real estate agents know no physical boundaries.

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Home Builders Remain Confident

The sentiment and index of new housing is as strong as it has ever been within the community of exiting home builders.

Not only are prices up, but the near future looks attractive for several reasons:

(1) Actual number of new home builders has shrunk to a low right now.
(2) The cost of any new builders entering the market is more difficult with respect to (a) obtaining a bank loan to start building and (b) buying available property that already got scooped up by other builders.
(3) Even though the pace of building new homes has slowed, that has resulted in lower “new” inventory. Coupled with a strong current demand by potential Buyers, this has pushed prices higher.

Now there are difficulties that builders are facing – mainly higher costs to acquire materials and a labor shortage.

Home sales have hit their highest pace in a decade – national median home price jumped almost 7% from last year – millennials are getting back into the market –

Bottom line: Existing home builders are riding the wave of higher prices, more profits, and fewer competitors…in other words, near nirvana.

Source: Wall Street Journal, May 16, 2017, Page B12 and Page A2.

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After closing – property tax bill and homestead exemption

Now this is an interesting, often ignored, topic.

Almost everyone who purchases a property in the State of Georgia signs a form similar to the sample document in this blog post at closing.

In addition to the Buyers and Sellers signing paperwork or documents at the closing table that they agree to cooperate to sign revised paperwork to correct inadvertent errors or omissions, the parties also agree that if estimates are used to calculate each party’s pportion of current or previous year’s property taxes, they agree to get together to share proration of any property taxes or tax assessments against the property after closing.

Attached is a typical statement that both parties sign reflecting that agreement.

Also, notice the other statement reminding the new Buyer to file a homestead exemption paperwork to extend or use all existing homestead exemptions to reduce property taxes.

Does anyone ever read this?

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Can an HOA prevent you from leasing your real property?

Yes and no – depending on your existing HOA CCRs and your HOA reaction to limitations placed on certain types loans (i.e., FHA) by lenders allowed to be used by Buyers if rentals/leases exceed certain thresholds and whether or not the HOA has elected to submit itself to the 1994 Georgia Property Owners Act (POA).

HOAs that agree to be compliant with the POA are not subject to Section 44-5-60 (4) of the Georgia Code. This code section states that “no change in the covenants which imposes a greater restriction on the use or development of the land will be enforced unless agreed to in writing by the owner of the affected property at the time such change is made.” This advantage is most readily apparent in those Associations who wish to pass amendments to their Declaration to enact stricter leasing restrictions.

So in the case where your HOA is now in compliance with the POA, leasing regulations can be enacted and the renewed lease with your tenant may be denied and you will no longer be allowed to lease the property.

Source: The Georgia POA Act and Your Association.

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Georgia Intangibles Tax – How much Does Georgia Collect each year?

Good question – since it amounts to HUNDRED$ of DOLLARS per mortgage transaction and it’s rolled into Georgia’s General Budget, nobody knows.

What is it?

Each time a real estate property (house, land, condo, etc) is purchased (not refinanced) with a mortgage, the Buyer is charged a fee at closing and the mortgage is filed/recorded in the public county real estate records where it is located in Georgia.

The fee is calculated by multiplying $1.50 by each $500 (or equivalent) of mortgage amount. For example, in the mortgage amount is $100,200, then divide it by 500 and you get 200.4 – round up to 205 and multiply by $1.50 and you get $301.50 Intangibles Tax.

The total proceeds are distributed to several State and local tax jurisdictions within the counties where the money is collected.

The total collected by each jurisdiction depends on the county’s millage rate multiplied by the standard state rate of 0.25.

It is unknown as of this writing how much Intangibles Tax collected each year in Georgia, but the most recent amount I’ve seen is 2002 number where the State of Georgia collected about $1.75 million. I’m sure there has been at least that much collected each year over the years…but somehow those numbers are hard to find – lack of transparency based on such a small portion of everyone’s budget I guess.

Source: Intangible Recording Tax information by the State of Georgia.

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How was the $110 Billion in bank fines spent?

Your guess is as good as the US Government’s!

Make sure you put on your big boy and big girl panties when you read this….

Major US banks paid about $110 Billion in fines over the mortgage banking crisis.

New York State spent some of their money on a new stable and horse barn at the state fair…

A mortgage firm in New Jersey received $8.5 million for reporting a bank’s bad conduct.

Large portion (about $50 Billion) of the fines stayed with the agency/organization levying the fines with limited disclosure where the money was spent.

The U.S. Treasury Department received about $49 Billion and there is no accountability where that money went.

The U.S. Justice Department collected about $450 Million and hasn’t disclosed any details about how that money has been spent. And by the way, there is a “Three Percent Fund” administered by the Justice Department. The fund is comprised of 3% of all civil fines or penalties collected by the department and yes – there is no accountability of funds.

Almost all US States received about $5 Million to spend as they saw fit.

The Federal Housing Finance Agency (FHFA) collected about $34 Billion, of which most went into the US Treasury which in turn $187 Billion helped bail out Fannie and Freddie, who subsequently were taken over (under receivership) by the Federal Government and all profits were also turned over to the US Treasury, with no accountability where those funds were spent (if any on housing related matters). And both Fannie and Freddie have been profitable since 2012 and have paid over $245 Billion in dividends to the US Treasury – and where have those funds been spent?

There has just been no disclosure as to where the fines went!

The U.S. Treasury has stated that the settlement money isn’t specifically tracked.

Source: WSJ, 3-10-2016, Page A1.

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HOAs might need FCAR’s 2015 Community Association Fact Book 2015

The Foundation for Community Association Research (FCAR) provides authoritative research and analysis on community association trends, issues and operations. FCAR supports and conducts research and makes that information available to those involved in association development, governance and management.

This publication is designed to provide accurate and authoritative information in regard to the subject matter: 2015 Community Association Fact Book.

References to articles, sources, products, or services are not a specific endorsement and not guaranteed to be true or accurate, but the user must perform their due diligence and investigate whether the information provided is valid, or the product or service is right for them. I welcome any or all comments that would help others. Be careful – if it sounds too good, it probably is!

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HUD’s reverse-mortgage program (HECM)

Update 2-14-2017: CONSIDERING A REVERSE MORTGAGE? (Pulished by CFPB)

I have no dog in this fight. I’ve heard closing costs may be high (especially lender costs) to get the equity but for those who are 62 or older who are cash strapped and need supplemental income to live or other emergency needs, this is a source of funds.

How does a reverse mortgage work?

Reverse Mortgage is a way to borrow from the sizable portion of equity if you are 62 years of age or older. It is a financial arrangement withdrawing the eligible equity (it is not all of the equity – but lender determines ultimate level) in your home in (a) lump sum, (b) fixed monthly payment, or (c) line of credit after loan closing costs are covered. The home must be your primary personal residence and the loan continues until (a) owner dies or (b) total amount of eligible equity is depleted. The loan must be repaid from the proceeds of its sale after (a) owner’s death, (b) owner moves out, (c) house is sold. Now, in addition to any other restrictions, the homeowner agrees to continue to (a) pay homeowner’s insurance, (b) pay property taxes, and (c) maintain the home in a livable condition and retain its value (i.e., exterior paint, deck, roof, hvac, and other repairs).

What are some features and benefits to the reverse mortgage loan?

  • Supplement their monthly income;
  • Pay off an existing loan;
  • Use funds to make home improvements or maintenance repairs;
  • Pay for health care expenses; or
  • Pay off debts or any other legal expenditure.

What are the closing costs?

  • Loan Origination fee – A lender can charge the greater of $2,500 or 2% of the first $200,000 of your home’s value plus 1% of the amount over $200,000. HECM origination fees are capped at $6,000.
  • 3rd party fees about the same as a typical mortgage (i.e., appraisal, inspections, title insurance, surveys, recording fees, credit checks, title searches, etc.).
  • FHA Mortgage Insurance Premium (MIP) – both the up front fee and annual fee (annual fee never disappears)
  • Loan Servicing Fees – typically less that $40/month.

Source #1: FHA website on reverse mortgages.

Source #2: Some features, pros and cons of reverse mortgages from bankrate.com.

Source #3: AJC, Buyer’s Edge Section, 11-6-2016, A2.

References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.

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