Just read this article on CNNMoney.com
If you have lost your home in Minnesota on a short sale or through foreclosure, beware down the road. Even though a lender may release the lien on a property, does not mean they still can't come after you for the debt forgiven on the sale. Many sellers are getting letters in the mail from banks one to four years after a sale stating they are getting a judgement filed against them. The article is posted below:
You lost your house - but you still have to payBy Les Christie, staff writerFebruary 3, 2010: 3:21 PM ET
NEW YORK (CNNMoney.com) -- As terrible as it is to lose your house to foreclosure, at least it's a relief to put your biggest financial headache behind you, right?
Wrong. Former homeowners may still be on the hook if there's a difference between what they owed on their mortgage and what the bank could sell it for at auction. And these "deficiency judgments" are ticking time bombs that can explode years after borrowers lose their homes.
It can even happen to people who got their bank to approve them selling their home for less than it is worth.
Vanessa Corey, for example, short sold her Fredericksburg, Va., home in April 2008. She and her husband built the house in 2004, but setbacks, both personal (divorce) and professional (housing bust), made it impossible for the real estate agent to keep her home. So she negotiated the short sale and thought that was the end of it.
"My understanding was that the deficiency was negotiated away," she said. "Then, last November, I got a letter from a lawyer telling me I owed my lender $65,000. I had to declare bankruptcy. There was no way I could pay it."
Many homeowners are now in the same boat. And not just those who took out bigger loans than they could afford or who did so called "liar loans" where they didn't have to verify their income.
Because of falling home prices, borrowers who always paid their mortgage but who have run into unforeseen circumstances -- like unemployment or a job transfer -- can no longer sell their homes for what they owe. As a result, they are being forced to short sell or foreclose and are getting caught up in deficiency judgments.
"After the banks foreclose, it's very common now to have large deficiencies with houses not worth the balances owed," said Don Lampe, a North Carolina real estate attorney.
Lenders mostly declined comment. Although Corey's lender, BB&T did indicate it was pursuing more deficiency judgments.
"They follow the rise and fall of foreclosures," said the spokeswoman, who would not discuss Corey's account.
Whether banks can and will pursue deficiency judgments depends on many factors, including what state the borrower lives in and whether there's a second mortgage or other liens. But if borrowers ignore the possibility of deficiencies, it could haunt them.
"Once they have a judgment, they can pursue you anywhere," said Richard Zaretsky, a board-certified real estate attorney in West Palm Beach, Fla. "They can ask for financial records, have your wages garnished and, if you fail to respond, a judge can put you in jail."
In the case of foreclosure, lenders can pursue deficiencies in more than 30 states, including Florida, New York and Texas, according to the U.S. Foreclosure Network, an organization of mortgage law firms.
Some states, such as California, are "non-recourse" and don't allow deficiency judgments. But, even there, if the original loan was refinanced, some or all of it may be subject to claims.
Deficiency judgments on short sales and deeds-in-lieu can happen in many more places. In these cases, extinguishing the debt is often a matter of negotiating with the bank.
But even when lenders are willing, many borrowers may not be aware that they have to ask for release. So, if you are pursuing a short sale, be sure your attorney asks the bank to release you from any further obligation.
"People shouldn't have a false sense of security that a deficiency judgment may not be later sought," Zaretsky said.
He expects many will be filed over the next few years, based on the fact that banks have sold many of these accounts to collection agencies and other third parties, at discount.
"The parties who bought those notes wouldn't have paid money for them unless they had the intention of acting," Zaretsky said.
What can be scary is that the judgments don't have to be obtained immediately. Lenders or collection agencies may wait until debtors have recovered financially before they swoop in. In Florida, the bank can wait up to five years to file. Once the court grants a judgment, the lender has 20 years there to collect, with interest.
It doesn't have to be a large amount of debt for a lender or collection agency to come after borrowers. Richard Varno and his wife short sold their Nashville home back in 2004 after he lost his job.
It wasn't until 2008, when the second lien holder asked him for $25,000, that he realized he still was liable.
"I told them, 'Hey, you guys released the title,'" he said. "As far as I know, I'm off the hook."
He wasn't. Releasing title does not necessarily end the debt. It's complicated because of variations in state law, but, generally, a mortgage has two parts: a pledge of collateral, represented by the home, and a promise to pay off the loan.
Lenders may release property liens in order to facilitate short sales without releasing borrowers from their obligations to pay under the promissory notes. The secured debt can convert to an unsecured one after the sale.
Zaretsky had one client who was so relieved to have arranged a short sale that he signed every paper his real estate agent shoved at him, even a confession that clearly stated he still owed the debt.
"He had no idea what he was doing," said Zaretsky. "All the lender had to do was go to court to convert the confession into a deficiency judgment."
Lenders are also very inconsistent. One of Zaretsky's short-sale clients was ready, willing and able to pay, but the bank did not even ask; another lender always reserves the right to pursue the deficiency.
Sometimes lenders go after borrowers walking away from their homes if they have other assets, according to Florida real estate attorney Larry Tolchinsky.
"Banks are pulling credit reports to see if it's a strategic default," he said. "If you're behind on all your other payments, you're okay. But if you're not, they'll come after you."
If borrowers have any doubts about their risks, they should seek legal advice. Or, at least, call non-profit organizations such as NeighborWorks for advice. According to Doug Robinson, a NeighborWorks spokesman, its counselors always try to negotiate away deficiencies when they facilitate short sales or deeds-in-lieu.
"We don't favor any short-sale contracts that leave any deficiency that can be pursued," he said.
Robinson himself knows what can happen. He paid off a deficiency after his own New Jersey house went through foreclosure 11 years ago
As if the Minnesota real estate market can get any worse.
See this article from cnn money:
By Blake Ellis, contributing writerJanuary 27, 2010: 11:05 AM ET
NEW YORK (CNNMoney.com) -- New home sales plunged to a 9-month low in December, according to a government report issued Wednesday.
The seasonally adjusted annual rate of new home sales dropped 7.6% to 342,000 last month, compared with a revised rate of 370,000 in November, the Census Bureau said.
Analysts surveyed by Briefing.com had expected December sales of new homes to hit an annual rate of 366,000.
"This is not a very encouraging number," said Mike Larson, a real estate analyst with Weiss Research. "You've got aggressive competition from banks and lenders trying to unload foreclosures, and many people are going to the existing home market because that's where the bargains are."
The largest December decline occurred in the Midwest, where the sales rate plunged 41% over the last 12 months.
While the market for new home sales has improved in the wake of the housing crisis, levels remain far below the July 2005 peak, when sales of new construction spiked to an annualized rate of nearly 1.4 million.
The rate of new home sales in November also disappointed analysts, plummeting 11.3%.
"What might be impacting sales in the last two months is a hangover effect because demand pulled forward earlier," said Larson. "What you're now seeing is the waning impact."
Price and inventory: There were 231,000 new homes for sale at the end of December. This marks the 32nd month of decline and leaves supply at the lowest level since April 1971, said Larson.
The current supply is enough to last for 8.1 months at the current sales rate, the Census Bureau said.
The median price of new homes sold in December was $221,300, up from $217,400 in the previous month. The average sales price was $290,600.
On Tuesday, the National Association of Realtors released its report on existing home sales for December, which sank 16.7% month-to-month to an annual rate of 5.45 million units.
Outlook: "These are some of the lowest levels in U.S. history," said Larson. "We're not going to see this go on forever, we're going to see rates stabilize."
Larson expects an uptick in demand, but not until "well into next year," once existing home inventory stabilizes.
"We're still oversupplied in that market, so until we work off that inventory we're not going to see anything spectacular happening in the new home market."
Here is an aricle I found on cnnmoney. For those of you that are struggling to make your mortgage payments, follow the steps listed on the article to try and get them reduced. The longer you wait, the harder it will be to get a modification done.
By Les Christie, staff writerJanuary 22, 2010: 3:04 PM ET
NEW YORK (CNNMoney.com) -- Struggling to pay your FHA mortgage? Now you no longer have to be late with your payments to get help.
On Friday, the Federal Housing Administration announced that it will assist borrowers before they become delinquent. All you need do is prove your problems were caused by a reduction of income from a job loss, fewer paid hours, slashed wages or a decline in self-employed business earnings.
You may also qualify because of a change in household circumstances, such as a death or disability.
"The FHA has always required lenders to establish early contact with delinquent borrowers to discuss the reason for missing a payment and to evaluate reinstatement options," FHA Commissioner David Stevens said in a prepared statement. "Now servicers will have additional options for those borrowers who seek help before they go delinquent, which increases the likelihood that the borrower will be able to retain their home."
The workouts available include forbearance, in which lenders agree to postpone or reduce payments for a specified period. This does not actually forgive the payments, they are just added to balance later in the mortgage term.
In more severe cases, borrowers may qualify for permanent payment reductions. This may be done by increasing the length of the loan, reducing the interest rate or even forgiving principal -- or a combination of any of the three.
Here is a great website to find an estimated current value of your property here in Minnesota.
www.zillow.com
Type your address into the search function and your property should pop up. You can also click to see recent home sales in your area to see how your house compares to the other sales.
If you want a more detailed opinion, email me and I can pull a full comparative market analysis.
steve@mnrates.com
Thought I would post this article I found on yahoo finance.
provided by
After a plunge lasting three years, houses have finally become cheap enough to lure buyers. That, in turn, is stabilizing prices, generating hope that the real estate market is beginning to recover.
Eight cities, including Chicago, Cleveland, Denver and San Francisco, showed price increases in May, up from four in April and one in March, according to data released Tuesday. Two other cities, Charlotte, N.C., and New York, were flat.
For the first time since early 2007, a composite index of 20 major cities was virtually flat, instead of down.
"We've found the bottom," said Mark Fleming, chief economist for First American CoreLogic, a data firm.
The release of the surprisingly strong Case-Shiller Price Index, compiled by Standard & Poor's, followed earlier reports that sales of existing homes rose last month for the third consecutive time, while sales of new homes rose in June by the largest percentage in eight years.
All of these improvements are tentative, and come after a relentless decline that knocked more than half the value off houses in the worst-hit cities.
Some skeptics say they believe the market is merely pausing before it resumes falling and that much of the life in the market is coming from speculators. Even the most enthusiastic analysts acknowledge that rising unemployment, another leap in foreclosures or a significant jump in interest rates could snuff out progress.
Still, hope is growing in some quarters that the worst has passed.
"Recession is over, economy is recovering — let's look forward and stop the backward-looking focus," John E. Silvia, the Wells Fargo chief economist, wrote Tuesday in a research note.
Kirit Shah decided to look forward a few weeks ago. A retired forensic chemist for the New York Police Department, he closed on a house in Royal Palm Beach, Fla.
Mr. Shah was not dissuaded when the salesman at K. Hovnanian Homes told him the five-bedroom place had been empty since it was finished three years ago. "It was waiting for me," said Mr. Shah, 64. "I'm on a lakefront. I never dreamed I would be on a lakefront. I'm within walking distance of a swimming pool."
But the thing he likes best is this: he paid $260,000 for the five-bedroom house, half of what that model was fetching during the boom. "An excellent deal," he said. "Plus I got a good rate on my mortgage, under 5 percent."
Turning markets are full of uncertainty. If Mr. Shah was one reason new home sales were up 11 percent in June from May, it is unclear just how many others like him are out there.
Brad Hunter, chief economist for Metrostudy, a research firm, said the new home numbers appeared to illustrate less a return of buyers like Mr. Shah and more a resurgence of investors and speculators. Metrostudy's own data showed that the number of buyers during the second quarter who actually moved into their new house declined 2.6 percent.
"Investors are turning right around and putting the houses on the market for sale or for rent," Mr. Hunter said. "What appears to have been an absorption of excess inventory can be just a changing of ownership of that inventory."
The good news in the Case-Shiller index, the most widely watched source of price information about the housing market, is equally provisionary. Tracking only large urban areas, the monthly index does not represent the country as a whole.
The Case-Shiller figures released Tuesday showed May prices were down 17.1 compared with May 2008. As bad as that may sound, it was the fourth consecutive month that price declines slowed Â? a step in the right direction, but perhaps not cause for widespread celebration.
More attention was focused on the news that, when May was compared with April, the price index for 20 major cities showed a half-percent gain. It was the first month-over-month increase in the index in 34 months.
"It is very possible that years from now we will say that April 2009 was the trough in home prices," said Maureen Maitland, vice president for index services at Standard & Poor's.
When the numbers were adjusted for seasonal factors, however — the usual way housing figures are presented — the slight gain disappeared and the index was essentially flat. Half of the cities showed continued declines.
One reason the market is perking up in some places, real estate agents say, is the encouragement offered by such measures as the first time buyer's tax credit of $8,000.
All the more reason, said the National Association of Realtors, to not only extend the credit but expand it. The association is lobbying for the current credit, which expires in December, to be replaced with a $15,000 credit for all buyers.
"This is a relatively low-cost way to keep the housing market moving forward," said Paul Bishop, the association's managing director of research.
Another reason for the market's resurgence is the prevalence of foreclosures, which make up about a third of all existing home sales. In some troubled regions, agents say they cannot remember the last transaction that did not involve a bank disposing of a property.
These communities are not yet showing any improvement in prices. Las Vegas was the worst-performing city in the May Case-Shiller index, falling 2.6 percent. Prices have fallen there by a third in the last year.
"The mom and pop that work at the Hilton can now afford a home here again," said Justin Pechonis, a Las Vegas real estate agent. "Las Vegas is a great place to buy now." But not from him. Sickened by seeing so many clients foreclosed on, he is getting out of the business. He now drives a taxi.
All this uncertainty breeds a hesitancy that seems to show up in nearly every sale, especially at the higher end of the market. When Margot and Pascal Lalonde decided in April to sell their two-bedroom condominium in the North End of Boston, they methodically quizzed six experienced agents about a good price.
List it for under $500,000 unless you want to be here for months, said one agent. Two others said they should demand $675,000. The other three were in between.
"In a market with so few sales, no one knows what to do," said Ms. Lalonde, a consultant.
After 80 days on the market and two small price reductions, the condo is now under contract for $550,000. The buyers examined the apartment six times. The Lalondes, who are moving to Short Hills, N.J., expect to be no less careful when they buy.
I just saw this article from the star tribune.
The legal tool took effect June 15, but for borrowers facing imminent sheriff's foreclosure sales, timing is everything.
By STEVE BRANDT, Star Tribune
Last update: June 30, 2009 - 11:37 PM
When Dan Carlson heard last week that a state law scarcely a week old allowed people facing sheriff's foreclosure sales to postpone them for five months, he jumped into action.
With the sheriff's sale on his Greenfield home just a week away, he and his wife, Kathy, filled out a sworn statement, then filed it with the Hennepin County recorder.
With that, the couple became one of the first in the state to use the new legal tool to try to stave off foreclosure.
But Carlson wasn't able to block his sheriff's sale. The law requires the affidavit be filed two weeks before a foreclosure sale, and it's so new that Carlson didn't hear about it in time. Their home was sold Tuesday, though state law allows them to stay for six more months.
"If a year or two ago someone would say I'd be in this position, I would have laughed," Carlson said. "Well, welcome to reality."
Amber Hawkins, an attorney he contacted, is hoping that publicity about the law, which took effect June 15, will help others facing imminent foreclosure sales to act in time to save their homes.
"I'm certainly going to recommend that a lot of my clients do it," said Hawkins, an attorney at the Legal Aid Society of Minneapolis. "I think it's a great tool for the right person."
Checks with eight metro-area counties found Hennepin and Sherburne counties already reporting one filing apiece, while there have been at least four in Anoka.
"I think it's going to be used," said state Rep. Joe Mullery, DFL-Minneapolis, who got the law passed despite what he said was resistance from committee chairs in his own party to giving it a hearing.
Normally, property sold in foreclosure proceedings may be redeemed by the owner if the full loan amount is paid off within six months after the sale.
Minnesota home buyers need to be careful that they get themselves into when purchasing a foreclosed or short sale home. Here are some great tips to help you prepare for the purchase:
NEW YORK (CNNMoney.com) -- Foreclosures are dominating the housing market. Right now, there are 1.5 million such homes for sale, and more are expected to be available soon. That provides both opportunities and pitfalls for bargain hunters.
Just because prices are low doesn't mean you should make snap decisions or buy something that isn't right. Here are 7 tips for making sure you don't get taken for a ride.
1. Don't get caught up in a feeding frenzy
"Everybody and their grandmas are trying to buy foreclosures," said Glenn Kelman, CEO of Redfin, an online, discount broker. But that doesn't mean you should lose your head.
Banks put repossessed homes back on the market at cut-rate prices because quick sales help avoid the expense of upkeep, such as property taxes, insurance, heat and electricity.
Those lowball prices represent golden opportunities, but they also attract dozens of buyers who may bid until homes are no longer bargains.
Don't get caught up in a bidding war. Instead, carefully calculate what you want to spend and do not exceed that price.
2. Contact lenders directly
Smart buyers establish relations with asset managers at banks. This may reward them with inside information or first crack at new foreclosures hitting the market.
In the case of a short sale, for example, it can give the inside edge. If a buyer is pursuing a short sale -- buying a home for less than what the current owner owes on the mortgage -- she should talk directly to the property's asset manager. That way, if the short sale falls through and the bank repossesses the house, the asset manager knows she is still interested. It could lead to a quick sale without other bidders.
3. Get pre-approved from the lender you want to buy from
If you're trying to buy a property from, say Bank of America, it can help to get a pre-approved mortgage from Bank of America. Doing so may cause lenders to look more favorably on your bid if it's similar to others.
Plus, you're not locked in if other lenders offer you better terms. You can always change your mind and get your mortgage from another source.
4. Consider fix-ups
Most REOs, the industry term for bank owned properties, are sold as is. "The conventional wisdom is that banks will do nothing to the houses before the sale," said Kelman.
That can be problematic today because so many foreclosed homes are in less-than-mint conditions. Often, the former owners were struggling to pay their bills and may have neglected routine maintenance. Or, they may have trashed the properties before leaving
In 25% of cases, homebuyers persuade lenders to fix some of the problems before the sale closes. Most of the time, banks would rather sell the house to the next available bidder -- one who doesn't ask the bank to pay for repairs.
So be willing to consider a home that needs some work -- but budget accordingly.
5. Hire a real estate attorney
Once banks agree to sales, they often want to move fast and load contracts up with legal mumbo jumbo. As a result, buyers often do not have the time or expertise to figure all the angles.
The solution is to hire a real estate attorney -- even in states where home sales are usually completed without one. Considering you're making a six-figure investment, the legal fees are cheap insurance against the risks.
6. Wait to make an offer
Homebuyers may be well served to wait before making an offer. Let the house sit on the market for a few days, giving others a chance to set the bidding tone. Then jump in.
"Talk to the agent selling the property," said Kelman. "The agent may tip his hand. Call up and ask, 'Should I make an offer? What should I come in at?'"
The agent may tell you he has offers at, say $300,000 and you should bid a bit higher, giving you an advantage over earlier bidders.
7. Tour properties with contractors
With so many REOs in seriously deficient shape, it's essential to go over every inch with someone who can spot problems and tell you how much it will cost to remedy them.
A foundation crack can be a minor problem or a deal breaker, and most ordinary homebuyers have no way of telling the difference. Like an attorney, a contractor can be very worthwhile insurance.
Information posted on yahoo finance....
What Underwater Borrowers Have in Common
Risky Mortgages
Some 77% of option-ARM borrowers and 50% of subprime mortgage borrowers were estimated to be underwater as of the first quarter of 2009, according to the Deutsche Bank report. With option-ARMs, borrowers could make minimum monthly payments that didn't even cover the loan's interest. As the market declined, these balances grew over time. With subprime mortgages, borrowers often had poor credit scores and little documentation of their financial situation. In both cases, borrowers often ended up with a large mortgage relative to the house's price.
Date of Purchase
Individuals who bought their home between 2003 and 2008 are at risk of being underwater because they bought while prices were rising, Zandi says. The risk is greater for those who bought between 2005 and 2006, as the market approached its peak.
Excessive Borrowing
Many individuals borrowed against their home when it appreciated in value during the bubble by taking out a second mortgage or tapping into a home equity line of credit or home equity loan. This borrowing left their home with less equity to weather the drop in home values.
Home's Location
The areas that have been hit the hardest by plunging home values include the "sand states" of Arizona, California, Florida and Nevada because they brought the most speculation, easy credit and overbuilding during the bubble, Zandi says. Also hurt: the states where unemployment is especially high and manufacturing jobs have been eliminated like Michigan, Ohio and Indiana, Zandi says.
A thirty-day demand letter must be sent on conventional loans prior to the commencement of a Minnesota foreclosure.
Minnesota provides for non-judicial foreclosure when the mortgage deed contains a power of sale. A Power of Attorney authorizing an attorney to conduct the foreclosure along with a notice of pendency of the foreclosure must be filed of record prior to the commencement of foreclosure action. The Notice of Minnesota Foreclosure Sale must be published for six weeks. The Notice of Mortgage Foreclosure Sale must be served on the occupants of the mortgaged premises at least four weeks prior to the mortgage foreclosure sale. Minnesota foreclosure law states that all junior lien holders and parties with an interest in the property may file a request for Notice of Mortgage Foreclosure Proceeding. Notice is served on any requesting party by mail. Foreclosure sales are conducted by the Sheriff of the county where the property is located. The Sheriff issues a Certificate of Sale to the successful bidder. Outside bidder’s must have cash or certified funds sufficient to outbid the foreclosing lender.
A Minnesota foreclosure is subject to a statutory redemption period of six months. In a limited number of circumstances there is a twelve month redemption period. The twelve month period applies when the amount due as of the date of the Notice of Foreclosure Sale is less than 2/3 of the original principal amount; the mortgage premises exceed 10 acres in size with additional limitation; or the mortgage premises exceeds 40 acres in size. For mortgages executed after December 31, 1989 a court order may be obtained which reduces the redemption period to five weeks if the property has been abandoned.
During the redemption period an affidavit must be filed which details expenses advanced during the redemption period for taxes, insurance, and property preservation. The advances may not be collectable if the affidavit is not filed at least ten days prior to the expiration of redemption.
In order to obtain a deficiency judgment, the mortgage must be foreclosed by judicial action. Judicial foreclosure can also be used to cure title defects or if in a Minnesota Foreclosure by Advertisement the occupants of the property are avoiding service. This involves the filing and service of a summons and complaint and obtaining a judgment. After judgment has been entered, the matter is scheduled for a judgment and decree sale with the Sheriff. The Notice of Sheriff’s Sale under judgment and decree must be published and posted for six weeks. The difference between the amount of the debt and the bid will establish the deficiency. After completion of the sale, the court must confirm the sale results. Redemption will run from the date of confirmation. Collection of the deficiency can be commenced after confirmation of the sale.
Thought I would post this article for everyone that purchased a home in the past year. Hopefully you purchased before November 6th 2009.From CNNMoney.comBy Les Christie staff writerJanuary 16, 2010: 6:54 AM ET
Bad news: You still can't e-file your taxes if you want the cash. And there are long delays.On Thursday, CNNMoney revealed that buyers who purchased their properties after Nov. 6 were unable to claim the refund because the Internal Revenue Service had yet to release a new form and instructions. But on Friday, the IRS finally posted the new form 5405.
The two-month delay was frustrating to Florida resident Charles Teschke. "We are not broke or anything, but nevertheless we were still counting on getting the tax refund to help pay for the appliances and stuff we needed for our new home," he said. "The IRS told me they estimate it will take four months for me to get my refund!"
First-time buyers were able to immediately file for the tax credit after Congress approved it last February as part of the stimulus program. All they had to do was file an amendment to their 2008 tax returns (the ones they filed last April) and claim the promised refund of 10% of the purchase price, up to $8,000.
They were able to e-file, and they received their refunds promptly. One reader filed a claim the first week of August, and had the check by the third week in September.
But on Nov. 6 the rules changed. That's when Congress extended -- and expanded -- the tax credit, which was originally scheduled to expire on Nov. 30.
Now, the deadline is April 30, by when all contracts must be signed. (Closings must happen by June 30.) Plus, existing homeowners looking to trade up (or down) can qualify for a $6,500 refund.
And these new buyers can no longer file electronically. They have to mail in paper forms, including the new 5405, whether they are amending their 2008 taxes or claiming it on the 2009 taxes that are being filed this spring.
That is going to dramatically slow refunds, but taxpayers can't blame the IRS. Instead, it's people scamming the system who are at fault.
For example, in October tax preparer James Otto Price III was the first person convicted of this crime. He falsely claimed the credit for 15 clients.
So buyers must now file documentation with their taxes -- including proof of residency, a signed mortgage statement and drivers license -- which the e-file system is not equipped to handle.
"Because of the scams, the IRS started sending back the amended returns and asking for proof," said Mary Mellem of David & Mary Mellem, EAs & Ashwaubenon Tax Professionals. "The system has no way of sending along the documents they're requiring. Taxpayers must file a paper return instead."
The IRS points out that taxpayers can still use the electronic forms available on its Web site or consumer sites such as TurboTax; they just have to print them out, attach the proof and mail everything in. And that can take quite a while.
"Taxpayers are looking at another three months before they get their returns," said Mellem.
I just saw this on yahoo finance. Thought everyone could use this great information:
10 Ways to Increase the Value of Your HomeKatie AdamsFriday, October 30, 2009 This article is part of a series related to being Financially Fit In a dour housing market, wouldn't it be nice to know that your remodeling project would pay off when you went to sell the property? Remodeling Magazine evaluated the top remodeling projects, how the cost-to-value has changed since the housing market implosion, and which projects are still worth the investment. Using the magazine's "Cost Vs. Value Report for 2008-2009," let's look at some of the best projects you can undertake and recoup the majority of your cost.
Upscale Projects
Mid-Range Projects
While all of the mid-range projects dropped in value versus cost since 2007, there are still numerous projects that will net you a significant ROI. Here are a few of the best bets for your money:
Conclusion
If you have savings or access to reasonably-priced credit, it's worth it to consider home improvement projects that will produce the best return for your time and money. Make sure you work with a reputable, licensed contractor (to avoid costly errors or budget overruns), and before you undertake any project it's a good idea to check and see if it could significantly increase your property tax bill.While it may still make sense in the long-run to undertake the project and add overall value to your home, you may need to make a few budgetary changes so that you don't get caught off-guard when the tax bill comes.
Thought this aritcle was interesting:
Jim Gehrz, Star Tribune
The median Twin Cities home price was $175,000 in August, far below the peak. Prices are about where they were in August 2001.
Minneapolis-St. Paul area home prices rose 3.2 percent in August.It's the fourth straight month of improvement and second month in a row the Cities came out on top.
By KARA McGUIRE, Star Tribune
Last update: October 28, 2009 - 7:06 AM
The Twin Cities area was one of the nation's warmer housing markets this summer as home prices rose faster here than in other metro areas, according to a closely watched housing index released Tuesday.
But market observers still warn that economic uncertainty could cause prices to start sinking again in a "double dip" scenario.
Minneapolis-St. Paul area home prices rose 3.2 percent from July to August, according to the Standard & Poor's/Case-Shiller national home price index, compared with a 1.2 percent average increase for the 20 cities tracked by the index. Only Cleveland failed to show an improvement in prices.
This is the fourth straight month of improvement for Minneapolis-St. Paul and the nation. It is also the second month in a row that the Twin Cities came out on top of the index; prices here rose 4.6 percent from June to July.
Still, home prices have a long way to go before recovering what they've lost. In this market, median home prices are still 13.7 percent below August 2008 levels. That is slightly worse than the 11.3 percent that prices are down nationwide.
The Minneapolis Area Association of Realtors reported the August median home price for the metro area was $175,000. Case-Shiller data show August prices in the Twin Cities area are about where they were in August 2001.
David Blitzer, chairman of the Index Committee at Standard & Poor's, said the Twin Cities may be on the top of the index for the second month in a row because the area's prices peaked and bottomed earlier than the other areas tracked.
The median price peaked in September 2006 at $229,000 and bottomed in April at $153,000.
"Plus, the run-up was not as wild as some places, so the recovery is probably easier," he explained in an e-mail.
Buying before winter
Chris Galler, chief operating officer for the Minnesota Association of Realtors, said he thinks area prices have risen faster because of the area's many cold months.
Steve LorausRealtorTwin Cities Real Estate Group612-387-1326www.mnrates.comwww.stevesmnhomes.comwww.shortsalesmn.com
One Hundred Tenth Congress of the United States of America AT THE FIRST SESSION Begun and held at the City of Washington on Thursday, the fourth day of January, two thousand and seven An Act To amend the Internal Revenue Code of 1986 to exclude discharges of indebtedness on principal residences from gross income, and for other purposes. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE. This Act may be cited as the `Mortgage Forgiveness Debt Relief Act of 2007'. SEC. 2. DISCHARGES OF INDEBTEDNESS ON PRINCIPAL RESIDENCE EXCLUDED FROM GROSS INCOME. (a) In General- Paragraph (1) of section 108(a) of the Internal Revenue Code of 1986 is amended by striking `or' at the end of subparagraph (C), by striking the period at the end of subparagraph (D) and inserting `, or', and by inserting after subparagraph (D) the following new subparagraph: `(E) the indebtedness discharged is qualified principal residence indebtedness which is discharged before January 1, 2010.'. (b) Special Rules Relating to Qualified Principal Residence Indebtedness- Section 108 of such Code is amended by adding at the end the following new subsection: `(h) Special Rules Relating to Qualified Principal Residence Indebtedness- `(1) BASIS REDUCTION- The amount excluded from gross income by reason of subsection (a)(1)(E) shall be applied to reduce (but not below zero) the basis of the principal residence of the taxpayer. `(2) QUALIFIED PRINCIPAL RESIDENCE INDEBTEDNESS- For purposes of this section, the term `qualified principal residence indebtedness' means acquisition indebtedness (within the meaning of section 163(h)(3)(B), applied by substituting `$2,000,000 ($1,000,000' for `$1,000,000 ($500,000' in clause (ii) thereof) with respect to the principal residence of the taxpayer. `(3) EXCEPTION FOR CERTAIN DISCHARGES NOT RELATED TO TAXPAYER'S FINANCIAL CONDITION- Subsection (a)(1)(E) shall not apply to the discharge of a loan if the discharge is on account of services performed for the lender or any other factor not directly related to a decline in the value of the residence or to the financial condition of the taxpayer. `(4) ORDERING RULE- If any loan is discharged, in whole or in part, and only a portion of such loan is qualified principal residence indebtedness, subsection (a)(1)(E) shall apply only to so much of the amount discharged as exceeds the amount of the loan (as determined immediately before such discharge) which is not qualified principal residence indebtedness. `(5) PRINCIPAL RESIDENCE- For purposes of this subsection, the term `principal residence' has the same meaning as when used in section 121.'. (c) Coordination- (1) Subparagraph (A) of section 108(a)(2) of such Code is amended by striking `and (D)' and inserting `(D), and (E)'. (2) Paragraph (2) of section 108(a) of such Code is amended by adding at the end the following new subparagraph: `(C) PRINCIPAL RESIDENCE EXCLUSION TAKES PRECEDENCE OVER INSOLVENCY EXCLUSION UNLESS ELECTED OTHERWISE- Paragraph (1)(B) shall not apply to a discharge to which paragraph (1)(E) applies unless the taxpayer elects to apply paragraph (1)(B) in lieu of paragraph (1)(E).'. (d) Effective Date- The amendments made by this section shall apply to discharges of indebtedness on or after January 1, 2007. SEC. 3. EXTENSION OF TREATMENT OF MORTGAGE INSURANCE PREMIUMS AS INTEREST. (a) In General- Subclause (I) of section 163(h)(3)(E)(iv) of the Internal Revenue Code of 1986 (relating to termination) is amended by striking `December 31, 2007' and inserting `December 31, 2010'. (b) Effective Date- The amendment made by this section shall apply to amounts paid or accrued after December 31, 2007. SEC. 4. ALTERNATIVE TESTS FOR QUALIFYING AS COOPERATIVE HOUSING CORPORATION. (a) In General- Subparagraph (D) of section 216(b)(1) of the Internal Revenue Code of 1986 (defining cooperative housing corporation) is amended to read as follows: `(D) meeting 1 or more of the following requirements for the taxable year in which the taxes and interest described in subsection (a) are paid or incurred: `(i) 80 percent or more of the corporation's gross income for such taxable year is derived from tenant-stockholders. `(ii) At all times during such taxable year, 80 percent or more of the total square footage of the corporation's property is used or available for use by the tenant-stockholders for residential purposes or purposes ancillary to such residential use. `(iii) 90 percent or more of the expenditures of the corporation paid or incurred during such taxable year are paid or incurred for the acquisition, construction, management, maintenance, or care of the corporation's property for the benefit of the tenant-stockholders.'. (b) Effective Date- The amendment made by this section shall apply to taxable years ending after the date of the enactment of this Act. SEC. 5. EXCLUSION FROM INCOME FOR BENEFITS PROVIDED TO VOLUNTEER FIREFIGHTERS AND EMERGENCY MEDICAL RESPONDERS. (a) In General- Part III of subchapter B of chapter 1 of the Internal Revenue Code of 1986 (relating to items specifically excluded from gross income) is amended by inserting after section 139A the following new section: `SEC. 139B. BENEFITS PROVIDED TO VOLUNTEER FIREFIGHTERS AND EMERGENCY MEDICAL RESPONDERS. `(a) In General- In the case of any member of a qualified volunteer emergency response organization, gross income shall not include-- `(1) any qualified State and local tax benefit, and `(2) any qualified payment. `(b) Denial of Double Benefits- In the case of any member of a qualified volunteer emergency response organization-- `(1) the deduction under 164 shall be determined with regard to any qualified State and local tax benefit, and `(2) expenses paid or incurred by the taxpayer in connection with the performance of services as such a member shall be taken into account under section 170 only to the extent such expenses exceed the amount of any qualified payment excluded from gross income under subsection (a). `(c) Definitions- For purposes of this section-- `(1) QUALIFIED STATE AND LOCAL TAX BENEFIT- The term `qualified state and local tax benefit' means any reduction or rebate of a tax described in paragraph (1), (2), or (3) of section 164(a) provided by a State or political division thereof on account of services performed as a member of a qualified volunteer emergency response organization. `(2) QUALIFIED PAYMENT- `(A) IN GENERAL- The term `qualified payment' means any payment (whether reimbursement or otherwise) provided by a State or political division thereof on account of the performance of services as a member of a qualified volunteer emergency response organization. `(B) APPLICABLE DOLLAR LIMITATION- The amount determined under subparagraph (A) for any taxable year shall not exceed $30 multiplied by the number of months during such year that the taxpayer performs such services. `(3) QUALIFIED VOLUNTEER EMERGENCY RESPONSE ORGANIZATION- The term `qualified volunteer emergency response organization' means any volunteer organization-- `(A) which is organized and operated to provide firefighting or emergency medical services for persons in the State or political subdivision, as the case may be, and `(B) which is required (by written agreement) by the State or political subdivision to furnish firefighting or emergency medical services in such State or political subdivision. `(d) Termination- This section shall not apply with respect to taxable years beginning after December 31, 2010.'. (b) Clerical Amendment- The table of sections for such part is amended by inserting after the item relating to section 139A the following new item: `Sec. 139B. Benefits provided to volunteer firefighters and emergency medical responders.'. (c) Effective Date- The amendments made by this section shall apply to taxable years beginning after December 31, 2007. SEC. 6. CLARIFICATION OF STUDENT HOUSING ELIGIBLE FOR LOW-INCOME HOUSING CREDIT. (a) In General- Subclause (I) of section 42(i)(3)(D)(ii) of the Internal Revenue Code of 1986 (relating to certain students not to disqualify unit) is amended to read as follows: `(I) single parents and their children and such parents are not dependents (as defined in section 152, determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof) of another individual and such children are not dependents (as so defined) of another individual other than a parent of such children, or.'. (b) Effective Date- The amendment made by this section shall apply to-- (1) housing credit amounts allocated before, on, or after the date of the enactment of this Act, and (2) buildings placed in service before, on, or after such date to the extent paragraph (1) of section 42(h) of the Internal Revenue Code of 1986 does not apply to any building by reason of paragraph (4) thereof. SEC. 7. APPLICATION OF JOINT RETURN LIMITATION FOR CAPITAL GAINS EXCLUSION TO CERTAIN POST-MARRIAGE SALES OF PRINCIPAL RESIDENCES BY SURVIVING SPOUSES. (a) Sale Within 2 Years of Spouse's Death- Section 121(b) of the Internal Revenue Code of 1986 (relating to limitations) is amended by adding at the end the following new paragraph: `(4) SPECIAL RULE FOR CERTAIN SALES BY SURVIVING SPOUSES- In the case of a sale or exchange of property by an unmarried individual whose spouse is deceased on the date of such sale, paragraph (1) shall be applied by substituting `$500,000' for `$250,000' if such sale occurs not later than 2 years after the date of death of such spouse and the requirements of paragraph (2)(A) were met immediately before such date of death.'. (b) Effective Date- The amendment made by this section shall apply to sales or exchanges after December 31, 2007. SEC. 8. MODIFICATION OF PENALTY FOR FAILURE TO FILE PARTNERSHIP RETURNS; LIMITATION ON DISCLOSURE. (a) Extension of Time Limitation- Section 6698(a) of the Internal Revenue Code of 1986 (relating to failure to file partnership returns) is amended by striking `5 months' and inserting `12 months'. (b) Increase in Penalty Amount- Paragraph (1) of section 6698(b) of such Code is amended by striking `$50' and inserting `$85'. (c) Limitation on Disclosure of Taxpayer Returns to Partners, S Corporation Shareholders, Trust Beneficiaries, and Estate Beneficiaries- (1) IN GENERAL- Section 6103(e) of such Code (relating to disclosure to persons having material interest) is amended by adding at the end the following new paragraph: `(10) LIMITATION ON CERTAIN DISCLOSURES UNDER THIS SUBSECTION- In the case of an inspection or disclosure under this subsection relating to the return of a partnership, S corporation, trust, or an estate, the information inspected or disclosed shall not include any supporting schedule, attachment, or list which includes the taxpayer identity information of a person other than the entity making the return or the person conducting the inspection or to whom the disclosure is made.'. (2) EFFECTIVE DATE- The amendment made by this subsection shall take effect on the date of the enactment of this Act. (d) Effective Date- The amendments made by subsections (a) and (b) shall apply to returns required to be filed after the date of the enactment of this Act. SEC. 9. PENALTY FOR FAILURE TO FILE S CORPORATION RETURNS. (a) In General- Part I of subchapter B of chapter 68 of the Internal Revenue Code of 1986 (relating to assessable penalties) is amended by adding at the end the following new section: `SEC. 6699. FAILURE TO FILE S CORPORATION RETURN. `(a) General Rule- In addition to the penalty imposed by section 7203 (relating to willful failure to file return, supply information, or pay tax), if any S corporation required to file a return under section 6037 for any taxable year-- `(1) fails to file such return at the time prescribed therefor (determined with regard to any extension of time for filing), or `(2) files a return which fails to show the information required under section 6037, such S corporation shall be liable for a penalty determined under subsection (b) for each month (or fraction thereof) during which such failure continues (but not to exceed 12 months), unless it is shown that such failure is due to reasonable cause. `(b) Amount Per Month- For purposes of subsection (a), the amount determined under this subsection for any month is the product of-- `(1) $85, multiplied by `(2) the number of persons who were shareholders in the S corporation during any part of the taxable year. `(c) Assessment of Penalty- The penalty imposed by subsection (a) shall be assessed against the S corporation. `(d) Deficiency Procedures Not To Apply- Subchapter B of chapter 63 (relating to deficiency procedures for income, estate, gift, and certain excise taxes) shall not apply in respect of the assessment or collection of any penalty imposed by subsection (a).'. (b) Clerical Amendment- The table of sections for part I of subchapter B of chapter 68 of such Code is amended by adding at the end the following new item: `Sec. 6699. Failure to file S corporation return.'. (c) Effective Date- The amendments made by this section shall apply to returns required to be filed after the date of the enactment of this Act. SEC. 10. MODIFICATION OF REQUIRED INSTALLMENT OF CORPORATE ESTIMATED TAXES WITH RESPECT TO CERTAIN DATES. The percentage under subparagraph (B) of section 401(1) of the Tax Increase Prevention and Reconciliation Act of 2005 in effect on the date of the enactment of this Act is increased by 1.50 percentage points. Speaker of the House of Representatives. Vice President of the United States and President of the Senate.
www.shortsalesmn.com
Your Benefits by going with Twin Cities Real Estate Short Sale Group:
1) Closing Rate - If you are in a position to need a Short Sale, it MUST get approved by the bank.Realtor Average - 19%Twin Cities Real Estate Group 91%
2) We WILL NOT close on the home unless the bank(s) agree to a full release of the lien. 3) We will give you a minimum of $500 out of our own pockets at closing. This is completely approved by the State of Minnesota - Department of Professional Regulation.
4) You will not lose, or have a lien on any other home you own. If you do not succeed in any aspect of the short sale, the bank(s) will come after all of your assets.
5) Your credit will recover in as little as 2 years. This is far better than the 7 to 10 years that most homeowners in your situation will face.
6) You will not have to go in to Foreclosure. That is what happens to over 80% of the home sellers that are in your situation.
7) You will not have to go in to Bankruptcy. This is exactly what will happen to you if you do not have the $$to pay the bank back the shortage.
8) You will not have to pay the attorney, title company, appraiser, or your Realtor (us) 1 penny. Most home sellers still must pay many of these expenses, thus costing them $1000s.
9) You get an entire team to assist you. Not just 1 agent running around like a chicken without its head.
10) You will not have to pay taxes on the default amount of money. www.shortsalesmn.com
Credit Effects:
Minnesota Short Sale -v- Foreclosure:
MN Foreclosure:*
The foreclosure in Minnesota is not a Judicial Foreclosure. This means that the seller would not have a judgement on your credit report. This means that if a person's home is foreclosed on, that they will not have a judgment against them on their credit report.
A foreclosure will remain on a credit report in the public records section for 10 years. The other issue with the foreclosure is that on loan application (for purchasing a new home), under Declarations, Section VIII it specifically asks a borrower if they have had a property foreclosed upon in the last 7 years.The other issue with a foreclosure in Minnesota is the Deficiency Judgment. The lender has the right to ask the court for a money judgment against the previous home owner personally.
The last problem is bankruptcy. The bottom line is that if previous home owner had the money to pay for the home, they would have.
In the end:The home owner will most likely have 3 judgments (including bankruptcy) and get docked at least 300 points on his or her credit report.
MN Short Sale:*
The short sale is very different. The nicest part of a short sale, is that it is NOT a judgment. It is an agreed apon arangement between you and the mortgage holder. The other nice feature is that banks do not generally ask for any of the losses back from you the previous home owner.
In the end:If the home owner does go through a MN Short Sale and the bank does not request a money judgment, the homeowner's credit will be affected by as little as 100 points.
Other good news:Fannie Mae now only requires 24 months' seasoning for a new loan.
Minnesota Short Sale
A Minnesota Short Sale will in NO Way affect your Credit as much as a Minnesota Foreclosure will!!
Don't let the bank force you into foreclosure, a deficiency judgment, garnishments,and bankruptcy.
Our Service is totally FREE to You -- The Bank Will Pay Us!(Walk Away - Pay $0 to Bank, Realtor, Lawyer, Title Company)We are YOUR LOCAL MN Short Sale Realtor(612) 387-1326
This process is very difficult. As of Thursday, October 26th:I can only take 5 more clients.
Here are some of the Banks we Have Negotiated with in Minnesota are:
And many many more!
www.shortssalesmn.com
Steps to Avoid Foreclosure
As a resident and homeowner in Minnesota, you have a few different options for avoiding a foreclosure. You should contact your lender immediately to let them know you are in financial hardship and are currently unable to make your mortgage payments. Here are some of the possible options you may have:
1. Lender modifies down to affordable terms. Ie-dropping the interest rate and payents
2. Short Sale your home(required bank approval)
3. Deed in-Lieu of foreclosure
All of these options save your credit report and are better options than giving your house back to the bank. The first option is the best if your lender is willing to modify your mortgage. Most will not agree to it if the property is not your primary residence or if you’re current on the mortgage. Most want to see the borrowers 3-6 months delinquent before they even consider a modification. Even then, the qualifications can be tough to meet, especially if you’re recently unemployed.
The third option is very seldom done since lenders typically don’t agree to it.
The 2nd option is typically the best for the borrower. A short sale is an approval from the seller’s lender to agree to sell a property for less than what is owed on the property. Banks typically like to see the borrower late on payments, but is not always required. I recently sold a short sale home in Andover where the seller was never late on a single payment. The bank realized that the seller was in serious hardship and that he owned 100k more than the house was worth. The bank was willing to write off the debt and relief the borrower of his mortgage obligations. If you are considering a short sale, please check out my site for more information. I have successfully closed 100% of all the short sale listings I have received.
Steve LorausRealtorTwin Cities Real Estate Group612-387-1326www.mnrates.comwww.stevesmnhomes.com
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