Not Even Halfway Through The Foreclosure Crisis!

The National Association of Realtors Publication, REALTOR®Mag”, reported in their DAILY REAL ESTATE NEWS | THURSDAY, DECEMBER 01, 2011

“The nation is not even halfway through the foreclosure crisis,” suggests a new report from the Center for Responsible Lending, “Lost Ground, 2011.” In the report, the Center for Responsible Lending analyzed 27 million mortgages issued over a five-year timespan.

Researchers found that at least 2.7 million mortgages issued from 2004 through 2008, or 6.4 percent, have ended in foreclosure as of February 2011. Also during that time period, researchers found that 3.6 million households — or an additional 8.3 percent — are still at immediate or serious risk of losing their homes, according to the study.

The report also included a breakdown of how the foreclosure crisis has affected different races and ethnicities. As a group, whites were found to have lost more homes than any other due to foreclosure. However, neighborhoods with high concentrations of minorities as well as low- and moderate-income neighborhoods, in general, were found to been hard hit in the foreclosure crisis, too.

Researchers found that in areas of the country that faced moderate housing price appreciation during the boom, foreclosure rates were highest for low-income borrowers, which was most evident in places like Detroit, Cleveland, and St. Louis. On the other hand, in areas with strong housing appreciation before the foreclosure crisis, such as in areas like California, Nevada, and Arizona, researchers found that more middle and higher-income borrowers faced foreclosure.

To view rates of foreclosure and serious delinquencies by your metro area, download the report.

Unfortunately, too many homeowners who have been unsuccessful in their attempts to refinance are now facing foreclosure. Often they proceed without the assistance or advice of real estate professionals. Now more than ever, you need to find an advocate for you and your family’s interests, one who is prepared to handle your specific needs.

Real estate professionals with the Certified Distressed Property Expert (CDPE) Designation have trained extensively to understand the options, solutions, and effective methods for dealing with homeowners facing hardships. Don’t risk your financial future and the potential sale of your home with an agent who does not have all the solutions.

CDPEs fully understand that saving a home can save a life, which can save a family, which can save a future.

As a CDPE I am available for those who need my expertise to get back on the path to stability.

If you, or someone you know has questions about this information, or would like to get started creating a plan, call me today.

The more proactive we are, the better the chance of finding financial freedom and stability.

For a Free Report: Understand your options and learn what you can do next.

Or…I urge you to take a moment and call me…

Alexandra von Bryce— Direct: 603-387-1674

For more information on Short Sales visit my website at:   NHShortSale911.com

Alexandra von Bryce, REALTOR®
CDPE (Certified Distressed Property Expert) CDPE Advanced Member, Certified Short Sale Specialist, Certified Distressed Luxury Property Specialist

Direct: 603-387-1674

RE/MAX Properties
169 Daniel Webster Hwy.
Nashua, NH 03060
Direct: (603) 387-1674
Office: (603) 589-8800
Fax: (603) 768-4253

avonbryce@gmail.com

Source: Realtor.org

 

Nationwide Pending U.S. Home Sales Decline 1.2%. Especially Hard-Hit Was The Northeast Where Pending Home Sales Fell 5.8 Percent

 According to Timothy Holman of Bloomberg : Pending U.S. Home Sales Decline 1.2% as Lower Prices Fail to Stoke Demand

“The number of contracts to purchase previously owned U.S. homes fell in August, a sign that lower prices and borrowing costs are doing little to stoke demand.

The 1.2 percent decrease in the index of pending home sales followed a 1.3 percent drop the previous month, the National Association of Realtors said today in Washington. Economists forecast a 2 percent drop, according to the median of 43 estimates in a Bloomberg News survey.”

This fact was initilaly reported by the National Association of Realtors:  Pending Home Sales Dip in August | Daily Real Estate News | Thursday, September 29, 2011

“Pending home sales slipped in August with a mixed regional performance but are higher than a year ago, according to the National Association of REALTORS®.

The Pending Home Sales Index, a forward-looking indicator based on contract signings, declined 1.2 percent to 88.6 in July from 89.7 in July but is 7.7 percent above August 2010 when it stood at 82.3. The data reflects contracts but not closings.

Lawrence Yun, NAR chief economist, said the decline reflects an uneven market. “The biggest monthly decline was in the Northeast, which was significantly disrupted by Hurricane Irene in the closing weekend of August,” he said. “But broadly speaking, contract signing activity has been holding in a narrow range for many months.”

This again reiterates that the Housing Recovery (or lack thereof) is becoming increasingly regionalized. “The Pending Home Sales Index  in the Northeast fell 5.8 percent to 63.6 in August but is 1.3 percent higher than August 2010. In the Midwest, the index declined 3.7 percent to 76.2 in August but is 8.2 percent above a year ago. Pending home sales in the South rose 2.6 percent to an index of 96.9 and are 7.6 percent higher than August 2010. In the West, the index dropped 2.4 percent to 108.1 in August but is 10.5 percent above a year ago.”  This is causing more and more homeowners who are having a difficult time making their mortgage payments to consider a Short Sale. 

The US housing crisis has claimed millions of victims. Unfortunately, many New Hampshire homeowners are facing the prospects of losing their homes to the bank because either they think that there is no time for a short sale or a short sale will have the same financial effect as a foreclosure or they don’t know their options.

The good news is that homeowners don’t have to navigate this process on their own. I am available for those who need my expertise to get back on the path to stability.

If you, or someone you know has questions about this information, or would like to get started creating a plan, call me today.

The more proactive we are, the better the chance of finding financial freedom and stability.

For a Free Report: Understand your options and learn what you can do next.

Or…I urge you to take a moment and call me…

Alexandra von Bryce— Direct: 603-387-1674

For more information on Short Sales visit my website at:   NHShortSale911.com   

Alexandra von Bryce, REALTOR®
 CDPE (Certified Distressed Property Expert) CDPE Advanced Member, Certified Short Sale Specialist, Certified Distressed Luxury Property Specialist

 

Direct: 603-387-1674

RE/MAX Properties
169 Daniel Webster Hwy.
Nashua, NH 03060
Direct: (603) 387-1674
Office: (603) 589-8800
Fax: (603) 768-4253

avonbryce@gmail.com

Sources: Bloomberg, NAR

Tax Consequences of A Real Estate Short Sale vs. Foreclosure

 Many of my clients have asked what are the tax ramifications of both NH Short Sales vs. a Foreclosure so I share a very well written article by Michael C. Gray, CPA

Tax Consequences of a “Short Sale” of Real Estate vs. Foreclosure

January 31, 2011

© 2011 by Michael C. Gray, CPA

Our nation is now seeing the effects of tightening mortgage credit after a liberal period. With increases in interest rates for adjustable rate mortgages and the conversion to amortization of principal for interest-only (or negative amortization) loans, home values for homes favored by subprime borrowers (and even other homes) are collapsing, and the debtors are either trying to “walk away” from their homes and allowing them to be foreclosed or are making “short sales.”

A “short sale” is selling the home for less than the mortgage balance and trying to get the lender to forgive the unpaid balance. This is a new use of the term, and is not the definition for this item in the Internal Revenue Code. In the tax law, a “short sale” is a sale of a borrowed item to be replaced at a future date, usually a security. The only case that I know about using the term “short sale” for this type of transaction is a 2008 decision, Stevens v. Commissioner.1 With the explosion of real estate short sales, we will undoubtedly soon see more cases with them.

A reason for debtors to consider a “short sale” instead of a foreclosure is to try to protect their credit history.

How are foreclosures (and deeds in lieu of foreclosure) taxed?

An important consideration in the results of a foreclosure (or a deed in lieu of foreclosure) is whether the debt is “recourse” or “nonrecourse.” If the debt is “recourse,” the debtor is personally liable for the debt. If the debt is “nonrecourse,” the debt is only secured by the property, and the debtor is not personally liable for the balance.

You should consult with an attorney to determine the status of your mortgage. In California, most mortgages that are used to purchase a residence are nonrecourse, but mortgages from refinancing a previous mortgage are usually recourse.

When a nonrecourse mortgage is foreclosed, the property is treated as being sold for the balance of the mortgage.2 This is important because the gain from a foreclosure of a principal residence may be eligible for the $250,000 ($500,000 for jointly-owned marital property) exclusion.

For example, for foreclosure of a nonrecourse debt,

Nonrecourse debt $500,000
Tax basis (cost to determine tax gain or loss)   300,000
Gain $200,000

If the holding period requirements are met and the residence was a principal residence, the above gain would be tax-free.

(Note: The above example is for consistency and contrast with the results for recourse debt. Most non-recourse debt for a residence is purchase-money debt, and would not exceed the tax basis (purchase price) of the residence. When the residence was a replacement residence for a principal residence sold before May 7, 1997, the tax basis can be less than the cost of the residence. Most of the mortgages for residences acquired in that scenario have probably been refinanced and are now recourse debt.)

For recourse debt, the debt is only satisfied up to the fair market value of the property. There is a sale up to that amount. If the lender forgives the balance of the mortgage, there is cancellation of debt income, which is taxed as ordinary income.3 (Regulations § 1.61-12.) (But see tax relief enacted for certain recourse debt secured by a principal residence, below.)

For example, for foreclosure of a recourse debt,

Recourse debt $500,000
Fair market value   450,000
Cancellation of debt (ordinary income) $ 50,000

(If the cancellation of debt was for “qualified principal residence indebtedness,” it will be excluded from taxable income. If the taxpayer still owns the home after the cancellation of debt, the excluded amount will be subtracted from the tax basis of the residence. See the section on “tax relief,” below.)

Fair market value $450,000
Tax basis   300,000
Gain $150,000

Again, if the holding period requirements are met and the residence was a principal residence the above gain would be tax-free, but the cancellation of debt would generally be taxable as ordinary income, except for certain “qualified principal residence indebtedness.” See the section on “tax relief,” below.

Tax relief enacted for recourse mortgage on principal residence debt forgiveness.

Congress has passed and President Bush has approved H.R. 3648, the “Mortgage Forgiveness Debt Relief Act of 2007.” The legislation is effective for discharges of indebtedness on or after January 1, 2007 and before January 1, 2010. The Federal Bailout Legislation H.R. 1424, passed on October 3, 2008, extended this relief through December 31, 2012.

Under the new law, a discharge of “qualified principal residence indebtedness” is excluded from taxable income. “Qualified principal residence indebtedness” is acquisition indebtedness secured by the principal residence of a taxpayer as defined for the deduction of residential mortgage interest, but the limit is $2,000,000 for the exclusion ($1,000,000 for the mortgage interest deduction) and $1,000,000 for married persons filing a separate return ($500,000 for the mortgage interest deduction). Also, the exclusion only applies to a mortgage secured by the principal residence of the taxpayer.

The election to exclude the income from discharge of principal residence indebtedness is made on Form 982 (Re. February 2008), Part I, lines 1.e and 2. According to IRS Publication 4681, a basis reduction amount is entered at Part II, like 10.b. only if the taxpayer still owns the residence after the debt cancellation.4 IRS Publications aren’t considered legal authority and I haven’t found any other authority for not making a basis adjustment when the debt cancellation happens at the same time as a foreclosure or short sale.

The exclusion does not apply if the discharge relates to providing services to the lender or any other factor not related to a decline in the value of the residence or the financial condition of the taxpayer/borrower.

According to IRS Publication 4681, if the taxpayer continues to own the home after the debt cancellation, the tax basis of the residence (cost used to determine taxable gain or loss on sale) is reduced by any amount of discharge of indebtedness excluded from taxable income, but not below zero. There is no basis adjustment if the debt cancellation happens with a foreclosure or short sale. There will be two calculations. (1) Cancellation of debt income eligible for exclusion. (2) Sale of residence to apply applicable exclusion.

The new exclusion of income for discharge of acquisition indebtedness for a principal residence takes precedence over the exclusion relating to insolvency (discussed below), unless the taxpayer elects otherwise.

For example, if the previous example for a recourse debt was eligible for the exclusion, here are the tax results:

Recourse debt $500,000
Fair market value   450,000
Cancellation of debt excluded from taxable income   50,000
Fair market value $450,000
Tax basis 300,000
Gain $150,000

If the holding period requirements are met, the above gain would qualify for the exclusion ($500,000 married, joint or $250,000 single) for sale of a principal residence.

(Remember the foreclosure of a non-recourse mortgage is not a discharge of indebtedness, but a “sale” of the residence in satisfaction of the mortgage. Therefore, such a foreclosure won’t qualify for the new exclusion, but may qualify for the exclusion of gain for sale of a principal residence. Also, since the balance of acquisition indebtedness is almost always less than the tax basis (cost) of the residence, it would be highly unusual for there to be a gain from a foreclosure.)

Disqualified debt taxable first.

An “ordering rule” in the tax law says that the exclusion only applies to as much of the amount discharged as exceeds the amount of the loan which is not qualified principal residence indebtedness.5 The IRS explains how to apply the rule at Page 8 of Publication 4681.

For example, Julie Smith’s residence was foreclosed in 2008. The fair market value of her home was $200,000. The balance of her mortgage was $275,000. Julie had used $50,000 from refinancing her home to pay down her credit card debt, not for home improvements. $50,000 of the debt discharge that is not qualified residence debt would be taxable, and the remaining $25,000 that is qualified residence debt would be excluded from taxable income.

Another example, the residence of John and Mary Taxpayers was foreclosed in 2008. The fair market value of their home was $1,500,000. The balance of their mortgage, which was all acquisition indebtedness, was $2,250,000. Since the maximum qualified principal residence indebtedness is $2,000, 000, $250,000 of the debt was not qualified principal residence indebtedness. The $250,000 non-qualified debt cancellation would be taxable income, and the remaining $500,000 that is qualified indebtedness would be excluded from taxable income.

Amounts that are otherwise taxable in the above examples could qualify for exclusions under other exceptions, such as for insolvency or bankruptcy.

California extends debt cancellation tax relief for homeowners.

California has enacted relief legislation for cancellation of mortgage debt relating to the acquisition of a principal residence.

Governor Schwartzenegger signed SB 401 (Wolk), the Conformity Act of 2010, on April 12, 2010, while we tax return preparers were busy finishing income tax returns and extension forms.

Effective for taxable years 2009 through 2012, the maximum qualified principal residence indebtedness eligible for relief is $400,000 for taxpayers who file as married or registered domestic partners filing a separate return and $800,000 for taxpayers who file joint returns, single persons, head of household and qualifying widow or widower (other individual taxpayers). The federal limits are $1 million for married persons filing a separate income tax return or $2 million for other individual taxpayers.

The debt relief that can be excluded from taxable income is limited to $250,000 for married or registered domestic partners filing a separate return and $500,000 for other individual taxpayers. The federal exclusion is limited to the amount of qualified principal residence indebtedness.

Note that the amount that can be excluded from taxable income for California was increased compared to the amounts that could be excluded for 2007 or 2008, which was $125,000 for married or registered domestic partners filing a separate return and $250,000 for other individual taxpayers.

Those taxpayers who now qualify for relief for 2009 and who filed their 2009 California individual income tax returns should file amended returns, Form 540X, including an amended Schedule CA (540/540NR). When filing Form 540X, write “Mortgage Debt Relief” in red across the top of page one of Form 540X.

There is no California equivalent for Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness. use the Federal form marked “California” at the top.

Remember the tax basis of the residence is reduced for the excluded gain.

What happens with a “short sale”?

Short sales are taxed under the same rules as foreclosures.

Recourse debt cancellation is not satisfied with the surrender of the property, so any debt not satisfied with the sale proceeds would be taxable as cancellation of debt income, except for certain “qualified principal residence indebtedness.” See section on “tax relief” above. (Rev. Rul. 92-99, 1992-2 CB 518. Also see Treasury Regulations Section 1.1001-2(a)(2).)

Therefore, the tax consequences would be similar to the “recourse debt” example, above. The buyer and seller might also have legal concerns about whether the lender would consent to the transaction and whether (for recourse debt) the lender would in fact forgive the debt.

For example, for a recourse debt short sale,

Net sale proceeds $450,000
Tax basis   300,000
Gain $150,000
Debt $500,000
Pay off using net sale proceeds   450,000
Cancellation of debt (ordinary income) $ 50,000

(If the cancellation of debt was for “qualified principal residence indebtedness,” it will be excluded from taxable income and be subtracted from the tax basis of the residence. See the section on “tax relief,” above.)

For non-recourse debt short sales when the seller and buyer require the cancellation of the debt by the lender as a condition of the sale, the debt cancellation is included in the sale proceeds, like for a foreclosure.6

Therefore, a “short sale” can be a viable alternative to a foreclosure for debtors with nonrecourse debt and who qualify for the exclusion from income of the gain from the sale of a principal residence.

What about selling expenses for a recourse mortgage?

For simplicity, I have disregarded selling expenses in the above discussion. For a short sale, selling expenses reduce the sales proceeds available to reduce the loan. For a foreclosure or deed in lieu of foreclosure, selling expenses are added to the debt. (See Jerry Myers Johnson v. Commissioner, TC Memo 1999-162, affirmed CA-4, 2001-1 USTC ¶ 50,391.) The net result should be similar, assuming the fair market value of the property equals the selling price for a short sale.

For example, for foreclosure of a recourse debt,

Recourse mortgage balance $500,000
Selling expenses     50,000
Total debt $550,000
Fair market value   450,000
Cancellation of debt (ordinary income) $100,000

(If the cancellation of debt was for “qualified principal residence indebtedness,” it will be excluded from taxable income. According to IRS Publication 4681, if the cancellation of indebtedness happened relating to a short sale, no basis adjustment would be required. If the taxpayer still owned the hoome after teh debt cancellation, the exclusion amount would be subtracted from the tax basis of the residence. See the section on “tax relief,” above.)

Fair market value $450,000
Tax basis -300,000
Selling expenses    -50,000
Gain $100,000

For example, for a recourse debt short sale,

Sales price $450,000
Selling expenses -50,000
Tax basis  -300,000
Gain $100,000
Recourse mortgage balance $500,000
Pay off using net sale proceeds
  ($450,000 sales price – $50,000
  selling expenses)
  400,000
Cancellation of debt (ordinary income) $100,000

(Same caveat for “qualified principal residence indebtedness” as above.)

Other exceptions for cancellation of debt income.

Cancellation of debt income may not be taxable if the debtor is insolvent or has the debt discharged in bankruptcy.7 With recent changes in the federal bankruptcy laws, it is much harder for individuals to file bankruptcy than before the changes.

What if the fair market value of the home has dropped after purchase?

Example – Non-recourse foreclosure/short sale

Mortgage balance $500,000
Tax basis   700,000
Loss -$200,000

(The fair market value of the property is disregarded for a non-recourse mortgage.)

If this is a principal residence, the loss is a non-deductible personal loss.

Example – Recourse foreclosure/short sale

Mortgage balance $500,000
Fair market value   450,000
Cancellation of debt income $ 50,000

(But see the rules for exclusion for cancellation of “qualified principal residence indebtedness” in the section on “tax relief,” above.)

Fair market value $450,000
Tax basis $700,000
Loss (for personal residence, non-deductible) -250,000

Senator Grassley asks IRS to help homeowners with loan forgiveness tax bills.

Senator Chuck Grassley, R-Iowa, who is the ranking minority member on the Senate Finance Committee, has sent a letter to the Treasury Department and the Internal Revenue Service asking for help for homeowners who face big tax bills because of home loan debt forgiveness on a principal residence. Grassley asked that the IRS accept offers in compromise to eliminate or reduce the taxes for these transactions.

Grassley reminded the IRS that they may compromise to promote effective tax administration where compelling public policy or equity considerations identified by the taxpayer provide a sufficient basis for compromising the liability.

(Similar requests were ignored when taxpayers suffered tax disasters relating to stock option transactions during the stock market crash of 2000 and 2001.)

Considerations for rental real estate

Owners of rental properties often have accumulated suspended passive activity losses that can be applied against the income from a debt cancellation with respect to the rental.

Losses from the sale of income-producing properties may be deductible as ordinary losses under Internal Revenue Code Section 1231. (The loss is reported on Form 4797.) The loss may offset cancellation of debt income. If the property isn’t income producing, the loss may be a capital loss, limited to capital gains plus $3,000.

Taxpayers other than C corporations may elect to exclude cancellation of “qualified real property business indebtedness” from taxable income. (Internal Revenue Code Sections 108(a)(1)(D) and 108(c).) This is mostly debt incurred to acquire, construct, reconstruct or substantially improve real property used in a trade or business. The IRS Chief counsel has said that rental real estate is considered to be used in a trade or business, provided the taxpayer didn’t use the property for more than 14 days in the taxable year.8 Refinanced debt up to the qualifying amount of a previous debt also qualifies. The tax basis of depreciable real property is reduced for the excluded gain. The amount excluded is limited to the adjusted basis of depreciable real property before the discharge.

Exclusions for discharges of debt in bankruptcy in a title 11 case and up to the amount of insolvency are also available for cancellations of debt relating to investment real estate.

The tax basis of assets must be reduced for the excluded gain.

Taxpayers who have a trade or business debt cancellation during 2009 or 2010 can elect to defer reporting the income. The taxpayer can be a C corporation or another taxpayer with trade or business debt. Based on the Chief Counsel Advice cited above, it appears acquisition debt cancellations for most rental properties will qualify.9 The income is reported ratably over a five-year period. For a cancellation during 2009, the income is recognized starting the fifth taxable year following the taxable year in which the cancellation occurs. For cancellations during 2010, the income is recognized starting the fourth taxable year following the taxable year in which the cancellation occurs. If the taxpayer dies, liquidates substantially all of the taxpayer’s assets, or ceases business, the rest of the income is reported in the year of the event. Pass through entities like partnerships and S corporations make the election at the entity level, but can apply on a partner-by-partner or shareholder-by-shareholder basis. If the interest in the entity is sold or otherwise terminated, the rest of the income is reported in the year of the event.10

If all of the rental properties are disposed of in short sales or foreclosures, there will be no tax benefit from making the deferral election.

The advantage of the deferral election is no basis adjustment is required for the assets of the taxpayer. The disadvantage is the tax eventually has to be paid.

(Thanks to Richard Ogg, EA, who brought the Briarpark decision to my attention!)

P.S. For more information, watch Michael Gray’s Financial Insider Weekly, interviews of attorney and CPA Scott Haislett, “California Short Sales and Foreclosures”, and attorney William Mahan, “How Mortgage Modifications, Short Sales and Foreclosures Work” and “Short Sales and Foreclosures – Tax Consequences”. Attorney Michael Malter of Binder & Malter, LLP also discusses short sales in Michael Gray’s interview for Financial Insider Weekly, “What you should know about bankruptcy for individuals”.

There are also explanations about foreclosures and cancellation of debt in IRS Publications 523, Selling Your Home; 552, Taxable and Nontaxable Income; and 544, Sales and Other Dispositions of Assets at www.irs.gov. Also see the instructions for Form 982. The IRS also recently issued IRS Publication 4681, Canceled Debts, Foreclosures, Repossessions and Abandonments.

For the latest U.S. income tax developments relating to real estate, subscribe to Michael Gray, CPA’s Real Estate Tax Letter. There is no charge or obligation to subscribe to this email newsletter.

IRS Circular 230 Disclosure: As required by U.S. Treasury Regulations, you are hereby advised that any written tax advice contained on this website was not written or intended to be used (and cannot be used) by any taxpayer for the purpose of avoiding penalties that may be imposed under the U.S. Internal Revenue Code.


 

If you, or someone you know is having difficulty in making the mortgage payments and are facing foreclosure it is time to consider a short Sale.

I you have questions about a short sale, or would like to get started creating a plan, call me today.

The more proactive we are, the better the chance of finding financial freedom and stability.

For a Free Report: Understand your options and learn what you can do next.

Or…I urge you to take a moment and call me…

Alexandra von Bryce— Direct: 603-387-1674

For more information on Short Sales visit my website at:   NHShortSale911.com   

Alexandra von Bryce, REALTOR®
 CDPE (Certified Distressed Property Expert) CDPE Advanced Member, Certified Short Sale Specialist, Certified Distressed Luxury Property Specialist

 

Direct: 603-387-1674

RE/MAX Properties
169 Daniel Webster Hwy.
Nashua, NH 03060
Direct: (603) 387-1674
Office: (603) 589-8800
Fax: (603) 768-4253

avonbryce@gmail.com

Source:    Tax Consequences of a “Short Sale” of Real Estate vs. Foreclosure

Michael Gray, CPA
2190 Stokes St., Suite 102
San Jose, California 95128-4512
(408) 918-3162
Fax (408) 998-2766
email: mgray@taxtrimmers.com
© 2011

New Home Sales Fall For The Fourth-Straight Month As Foreclosures and Short Sales Dominate The Market

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

New Home Sales Fall For The Fourth Straight Month

This shouldn’t be a surprise to anyone. As long as the very well priced Foreclosures (and Short Sales) dominate most major real estate markets new builders won’t have many takers. Here is part of an article from the New York Times.  New home sales fell for the fourth-straight month in August as the bursting of the housing bubble continues to plague the U.S. economy.

Sales fell by 2.3% on a monthly basis to a seasonally adjusted annual rate of 295,000, the Commerce Department said Monday. It was the weakest pace in six months.

Sales in July were revised upward slightly to a rate of 302,000 from a previously reported 298,000.

The results were in line with forecasts. Economists surveyed by Dow Jones Newswires had forecast sales would fall 1.0% to an annual rate of 295,000. Compared with a year earlier, however, new home sales were up 6.1%

Derek Kravits wrote in USA Today  “High unemployment, larger required down payments and tougher lending standards are preventing many people from buying homes. Plunging stocks and a growing fear that the U.S. could tip back into another recession are also keeping people from entering the housing market.Pierre Ellis, an analyst at Decision Economics, said that until wages increase and hiring picks up, home sales will languish.

The “bad news is the evident absence of optimism that sales will pick up to any degree,” Ellis said.While new homes represent less than one-fifth of the housing market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in taxes, according to the National Association of Home Builders.  Last year was also the fifth straight year that sales have fallen. It followed five straight years of record highs, when housing was booming.The median sales price of a new home fell nearly 9 percent to $209,100 — the lowest price since last October. That suggests builders are slashing their prices in order to compete with comparably lower-priced previously occupied homes.

Foreclosures and short sales — when lenders accept less for a house than a mortgage is worth — are forcing prices down. Those homes are selling at an average discount of 20%, and they are lowering neighboring home values. That’s made many re-sales a bargain compared with new homes, creating an average 30% disparity in prices.”

This places the traditional re-sale sellers in an increasingly difficult situation. Caught between bargain priced distressed properties and deeply discounted new homes, many sellers are finding themselves having to significantly reduce  the price of their homes further deteriorating the equity they once had. 

Then if the unimaginable happens:…they lose their job, they become sick or injured, a spouse dies…and now those property owners are now facing the prospect of foreclosure.   

The current U.S. housing market and financial crisis have caused tremendous stress and heartache for families across America. If you or someone you know is among the millions today affected by the prospect of foreclosure, understand that you are not alone

Unfortunately, too many homeowners facing foreclosure proceed without the assistance or advice of real estate professionals. Now more than ever, you need to find an advocate for you and your family’s interests, one who is prepared to handle your specific needs.

I am a Real estate professional with the Certified Distressed Property Expert (CDPE) Designation  who has been  trained extensively to understand the options, solutions, and effective methods for dealing with homeowners facing hardships. Don’t risk your financial future and the potential sale of your home with an agent who does not have all the solutions.

CDPEs fully understand that saving a home can save a life, which can save a family, which can save a future.

If you, or someone you know has questions about this information, or would like to get started creating a plan, call me today.

The more proactive we are, the better the chance of finding financial freedom and stability.

For a Free Report: Understand your options and learn what you can do next.

Or…I urge you to take a moment and call me…

Alexandra von Bryce— Direct: 603-387-1674

For more information on Short Sales visit my website at:   NHShortSale911.com   

Alexandra von Bryce, REALTOR®
 CDPE (Certified Distressed Property Expert) CDPE Advanced Member, Certified Short Sale Specialist, Certified Distressed Luxury Property Specialist

 

Direct: 603-387-1674

RE/MAX Properties
169 Daniel Webster Hwy.
Nashua, NH 03060
Direct: (603) 387-1674
Office: (603) 589-8800
Fax: (603) 768-4253

avonbryce@gmail.com

Sources: NYT and USA Today

Surprise 7% Increase In Home Sales | A Turnaround?| Not So Fast–Foreclosures Are Increasing Dramatically –Time To Short Sale Your NH Home!

Normally this would be the kind of real estate news I like reporting….home sales INCREASE by 7%.—WOW!

Time to celebrate?

Not so fast…

Foreclosures are increasing dramatically. Many major lenders such as: Bank of America, Wells Fargo, JP Morgan Chase and other are stepping up their foreclosrue filings…in some cases 200% month over month. And although the number of sales are up prices continue to fall nationwider and the overall housing market is showing clear signs of a significant slow down. So much so that leading housing economists are expecting the next few months to be ‘grim’ for home sales.

One thing is clear. Investors ARE buying. Specifically they are buying homes priced less than $100,000. Expect this trend to continue throughout the next 12-18 months.

So if you are having a difficult time making your mortgage payments your are not alone the US housing crisis has claimed millions of victims. Unfortunately, many New Hampshire homeowners are losing their homes to the bank because either they think that a short sale will have the same financial effect as a foreclosure or they don’t know their options.

The good news is that homeowners don’t have to navigate this process on their own. I am available for those who need my expertise to get back on the path to stability.

New Hampshire Homeowners Making the Right Choice for a Stable Future!

 

If you, or someone you know has questions about this information, or would like to get started creating a plan, call me today.

The more proactive we are, the better the chance of finding financial freedom and stability.

For a Free Report: Understand your options and learn what you can do next.

Or…I urge you to take a moment and call me…

Alexandra von Bryce— Direct: 603-387-1674

For more information on Short Sales visit my website at:   NHShortSale911.com   

Alexandra von Bryce, REALTOR®
 CDPE (Certified Distressed Property Expert) CDPE Advanced Member, Certified Short Sale Specialist, Certified Distressed Luxury Property Specialist

 

Direct: 603-387-1674

RE/MAX Properties
169 Daniel Webster Hwy.
Nashua, NH 03060
Direct: (603) 387-1674
Office: (603) 589-8800
Fax: (603) 768-4253

avonbryce@gmail.com

New Hampshire Homeowner Alert! A New Foreclosure Scam Is Plaguing Distressed Homeowners.

As the Foreclosure Crisis continues more and more New Hampshire homeowners are finding it increasingly difficult to pay their mortgage. Desperate, these homeowners are more inclined to turn to firms that promise a “quick fix”…  anything to save them from foreclosure, but beware!  It is probably another scam.

In addtion to the “Mortgage Modification” scams that have plauged homeowners across the nation this new scheme offers to include the homeowner in a lawsuit against the homeowner’s lender…. And as with all of the other scheme this one requires the homeowner to pay a fee. The catch? The lawsuit does not exist.

As reported by : KARK 4 News  in their article: AR Homeowners Alerted about New Foreclosure Scheme  “These scams offer to “save your home” or “fix your mortgage,” but in reality, most only generate a quick profit for the con-artist and provide no benefit to the consumer. Worse yet, homeowners who follow the advice of the scammers could lose their homes…

…”The latest scam we have seen is a direct mail piece from an organization purporting to be a California law firm,” McDaniel said. “It suggests that this firm has filed a lawsuit against the homeowner’s mortgage lender and that joining the lawsuit will provide the homeowner with relief from burdensome mortgage payments. In reality, there is no lawsuit and all!”

So in realty not only does the homeowner lose their fee, but they also are far more likely to lose their homes, as well.

New Hampshire homeowners are advised on the HUD website:  Making Home Affordable .gov, that  they must “Beware of Foreclosure Rescue Scams – Help Is Free!”

​Foreclosure rescue and mortgage modification scams are a growing problem. Homeowners must protect themselves so they do not lose money—or their home.

Scammers make promises that they cannot keep, such as guarantees to “save” your home or lower your mortgage, oftentimes for a fee. Scammers may pretend that they have direct contact with your mortgage servicer when they do not.

The Federal government provides free resources to get you the help you need. Homeowners can call the Homeowner’s HOPE™ Hotline at 1-888-995-HOPE (4673) for information about the Making Home Affordable © Program and to speak with a HUD-approved housing counselor.  Assistance is available in English and Spanish, and other languages by appointment.
 
Tips to Avoid Scams
  1. Beware of anyone who asks you to pay a fee in exchange for a counseling service or modification of a delinquent loan.
  2. Scam artists often target homeowners who are struggling to meet their mortgage commitment or anxious to sell their homes. Recognize and avoid common scams.
  3. Beware of people who pressure you to sign papers immediately, or who try to convince you that they can “save” your home if you sign or transfer over the deed to your house.
  4. Do not sign over the deed to your property to any organization or individual unless you are working directly with your mortgage company to forgive your debt.
  5. Never make a mortgage payment to anyone other than your mortgage company without their approval.
What to Do if You Have Been the Victim of a Scam
If you believe you have been the victim of a scam, you should file a complaint with the Federal Trade Commission (FTC). Visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357) for assistance in English or Spanish.

Short Sales vs. Foreclosure.

 

New Hampshire Homeowners Making the Right Choice for a Stable Future!

 

The US housing crisis has claimed millions of victims. Unfortunately, many New Hampshire homeowners are losing their homes to the bank because either they think that a short sale will have the same financial effect as a foreclosure or they don’t know their options.

The good news is that homeowners don’t have to navigate this process on their own. I am available for those who need my expertise to get back on the path to stability.

If you, or someone you know has questions about this information, or would like to get started creating a plan, call me today.

The more proactive we are, the better the chance of finding financial freedom and stability.

For a Free Report: Understand your options and learn what you can do next.

Or…I urge you to take a moment and call me…

Alexandra von Bryce— Direct: 603-387-1674

For more information on Short Sales visit my website at:   NHShortSale911.com   

Alexandra von Bryce, REALTOR®
 CDPE (Certified Distressed Property Expert) CDPE Advanced Member, Certified Short Sale Specialist, Certified Distressed Luxury Property Specialist

 

Direct: 603-387-1674

RE/MAX Properties
169 Daniel Webster Hwy.
Nashua, NH 03060
Direct: (603) 387-1674
Office: (603) 589-8800
Fax: (603) 768-4253

avonbryce@gmail.com

Despite Another Drop In Mortgage Rates Applications For New Loans Remain Flat

According to CNBC’s Real Estate Reporter, Diana Olick, despite another drop in mortgage rates, applications for refinance loans dropped last week as a pool of qualified applicants shrinks. While, on the other hand, applications for new home loans were flat as potential home buyers remain on side lines.

 To view the video go to:   Diana Olick’s Housing Market Report

What this means to many sellers is that there are more and more homes, many of which are Short Sales or Foreclosed properties, competing for a smaller pool of buyers.  Other than taking their property off the market or holding fast to a unrealistic price while the market deteriorates around them, the only reasonable course of action for today’s sellers, especially those “must sell” sellers, is to reduce the price of the home. As prices continue to fall many sellers see their equity continue to dwindle to the point that an increasing number are finding themselves “upside down” on their mortgage.  This is especially true those who have elected to try and sell their homes themselves —known as FSBOs (For Sale By Owners)— because they felt they couldn’t afford to pay a commission and now despite their best effors they are still finding themselves in a negative position on their mortgage.

These are sellers are the most vulnerable to default.  Chances are, you or someone you know in New England is facing the possibility of foreclosure. But you need to understand that you are not alone.

Today, 1 out of every 6 homeowners in America is behind on mortgage payments. These are tough and frustrating times. Now more than ever, it’s important to identify your options. Foreclosure can be avoided, your credit can be saved, and your financial future can be salvaged.

Through my experience handling distressed properties at RE/MAX Properties Nashua, I’ve found that homeowners today have more questions than answers about their circumstances. I have created this site to help you understand the possible solutions to foreclosure, as well as provide a detailed explanation of short sales, which may be the best course of action for some homeowners.

I’m offering you a FREE Report to explain your options and help you decide on a course of action. The idea of losing a home can be overwhelming, and I feel it is vital for you to have all the facts necessary to make an informed decision. For the free report: Understand Your Options.

As an agent with the CDPE® Designation, I have a strong and unique appreciation of the factors affecting the market, and know that there are options available to you.

If you would like to know more about your options, please call me at (603) 387-1674.

I am here to help … in any way I can.

For more information on Short Sales visit my website at:    http://www.nhshortsale911.com

Alexandra von Bryce, REALTOR®
 CDPE (Certified Distressed Property Expert) CDPE Advanced Member, Certified Short Sale Specialist, Certified Distressed Luxury Property Specialist

 

Direct: 603-387-1674

RE/MAX Properties
169 Daniel Webster Hwy.
Nashua, NH 03060
Direct: (603) 387-1674
Office: (603) 589-8800
Fax: (603) 589-887

avonbryce@gmail.com

In Default on Your Mortgage? NH Foreclosure Laws in a Nutshell…Now Is The Time To Short Sale Your Home!

Stop Foreclosure Before It Starts

If you are behind on the mortgage payments on your New Hampshire property and confused by all of the terms here is the New Hampshire Foreclosure Law Summary taken from stopforeclosure.com

Quick Facts

-  Judicial Foreclosure Available: Yes

-  Non-Judicial Foreclosure Available: Yes

-  Primary Security Instruments: Deed of Trust, Mortgage

-  Timeline: Varies by Process; Typically 60 days

-  Right of Redemption: None

-  Deficiency Judgments Allowed: Yes

“In New Hampshire, lenders may foreclose on a mortgage or deed of trust in default by using either the judicial or non-judicial foreclosure processes or any of the following special methods: Entry under Process, Entry and Publication or Possession and Publication.

Judicial Foreclosure

In New Hampshire, the judicial process of foreclosure is very similar to that of the strict foreclosure process used in other New England states. The judicial foreclosure process is one in which the lender must file a complaint against the borrower and obtain a decree of sale from a court having jurisdiction in the county where the property is located before foreclosure proceedings can begin. Generally, if the court finds the borrower in default, they will give them a set period of time to pay the delinquent amount, plus costs. If the borrower does not pay within the set period of time, the court will then order the property to be sold. Anyone may bid at the foreclosure sale, including the lender.

Non-Judicial Foreclosure

The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A “power of sale” clause is the clause in a deed of trust or mortgage, in which the borrower pre-authorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee. Regulations for this type of foreclosure process are outlined below in the “Power of Sale Foreclosure Guidelines”.

Power of Sale Foreclosure Guidelines

If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed. Otherwise, the non-judicial power of sale foreclosure is carried out in the following phases:

A notice of sale must be recorded in the county where the property is located and then: 1) mailed to the borrower at least twenty-five (25) days before the sale; and 2) published once a week for three (3) weeks, with the first publication appearing not less than twenty (20) days before the sale, in a newspaper of general circulation in the county where the property is located.

The notice should contain the time, date and place of sale, a description of the property and the default, as well as a “warning” to the borrower, informing him the property is going to be sold and what rights he has to stop the procedure.

The foreclosure sale must be held on the property itself, unless the power of sale clause specifies a different location.”

(source : www.stopforeclosure.com)

So it is critcial to stop the foreclosure before it starts call now for information on Short Sales…

603-387-1674

If you would prefer to go to my website to learn more about Short Sales go to: www.nhshortsale911.com

I urge you if you or anyone you know is having trouble making their mortgage payments and needs to do something BEFORE their home goes into foreclosure, I can help.

Call me at 603-387-1674

 I am a Certified Distressed Property Expert who is trained to help you through the process.

Alexandra von Bryce 

 Alexandra von Bryce, REALTOR®
CDPE (Certified Short Sale Specialist); Distressed Property Specialist; Distressed Luxury Property Specialist

Direct: 603-387-1674

RE/MAX Properties
169 Daniel Webster Hwy.
Nashua, NH 03060
Direct: (603) 387-1674
Office: (603) 589-8800
Fax: (603) 768-4253

avonbryce@gmail.com

Streamlined Short Sales Now Making Up A Greater Share Of All Distressed Sales

 
According to RealtyTrac Inc.,  Foreclosure Sales, which include homes purchased after they received a notice of default or that were repossessed by lenders, accounted for 31 percent of the market in the April-June quarter. That is approximately one in every three homes that were sold in Q2 were distressed properties…

“But the good news is many of these distressed sales are clearing faster, with streamlined short sales now making up a greater share of all distressed sales. Banks are getting rid of troubled loans/properties before having to go the more costly route to foreclosure!” CNBC’s Real Estate Reporter, Diana Olick’s stated in her recent article:

  “The Housing Market Is Shrinking!”  …

Diana began by saying: “The foreclosure headlines today are that one third of all home sales in Q2 were of distressed properties (foreclosures and short sales), according to a new report from online foreclosure sale and data site RealtyTrac.

The discount on those homes from comparable non-distressed properties was 32 percent.

What the headlines don’t say is that while the percentage of the market that’s distressed rose from a year ago, from 26 to 31 percent, the actual number of distressed sales fell. The share only went up because the number of non-distressed sales fell, leaving the total pool smaller.

And there’s the biggest problem in housing today.

The granular, organic, whatever you want to call it…non-distressed market is withering away. Sellers are afraid to put their homes on the market for fear of losing too much equity, which means there are fewer potential move-up buyers. First time buyers are choosing to rent in droves, as unemployment and the wider economy recover far more slowly than expected. This, despite the fact that, nationally at least, it now costs about the same to rent as it does to own. Just look at where the mortgage payment-to-rent ratio has gone over the past few years.

Rent, as a percentage of income, is rising and household formation is slowing at an alarming rate, eating into that much-needed first time home buyer demand. The good news is that distressed sales are clearing faster, with streamlined short sales now making up a greater share of all distressed sales. Banks are getting rid of troubled loans/properties before having to go the more costly route to foreclosure.”

To read Diana Olick’s entire article go to:http://www.cnbc.com/id/44274402

For more information on Short Sales go to my website: NHShortSale911.com