My New Blog

A home owner in a distressed loan on their mortgage faces many concerns, not only to their immediate situation, but also to the down the road consequences of their decision. For some owners that are so deeply under water foreclosure may be the only option. However, this is a decision that they must thoroughly analyze and consider with the assistance and guidance from either a qualified lawyer or a Realtor familiar with the short sale process, or both. There are numerous issues that impact their decision, and if they choose the wrong mechanism for relief it will take years to recover, if at all.

Here is a compilation of the more common issues and their impact on a consumer. 

Future Primary Residence purchase if the consumer elects a foreclosure:

• Homeowner will be ineligible for a Fannie Mae mortgage for 5 years
• For an investor, the Fannie Mae period is 7 years
• Future rates will be impacted because of the foreclosure
• Credit scores may be lowered from 250-300 points for a period of at least 3 years
• Foreclosure will appear on their credit scores and as a public record for 10 years or more
• Any security clearance will be affected as this is considered a misdemeanor or felony conviction. If the borrower is in the military, or in any position that requires a security clearance, their position can be terminated
• With some employers a foreclosure can be considered a reason for immediate termination
• Future employers that require credit checks may challenge the prospective employee
• Banks can pursue a deficiency judgment for the outstanding loan value with interest and collection costs

Future Primary Residence purchase if the consumer elects a short sale:

• Homeowner will be eligible for a Fannie Mae mortgage after 2 years
• For an investor, the Fannie Mae period is 2 years
• There should be no future complications with credit rates
• Only late payments may show if the final settlement is not correctly terminated, which could result in as little as a 50 point drop for 12 to 18 months
• A short sale is not reported on credit history
• A short sale on it's own does not affect a security clearance
• A short sale is not reported on a credit report and is no challenge to current or future employment
• In some successful short sales, it possible that the lender will surrender the right to any future deficiency judgments against the homeowner.

It becomes very important that once the home owner recognizes their problem and has investigated all other possible avenues to resolve their financial problems that they meet with a qualified real estate agent as soon as possible and set up the plan to get the house sold and get the banks assistance and cooperation to get the loan closed with the least complications to the homeowner now and down the road.

If you or anybody you know is having problems with their mortgage, I may be able to help. Have them call me for a free consultation

Our Lady of Lebanon Maronite Catholic Church in Waterbury, Ct is holding it's annual Holiday Food Festival and Christmas Bazaar this weekend, November 21 & 22 at the Cedars Hall, located at the corner of East Mountain Rd and Rt 69.

Hours are:

 10:00 AM to 7:00 pm on Sat

10:00 AM to 4:00 PM on Sun

Lunch & Dinner will be available both days consisting of traditional Lebanese delicacies

        Lebanese and American Baked Goods

                 An Everything Chocolate Table set up by Fascia's Chocolates

                       Raffles and various hand made Christmas Items

           For the Children, there will be a visit from Santa Claus 

Admission is free               

The First Time Home Buyers Tax Credit has been extended and expanded.  Previously, the First Time Home Buyers Tax Credit was only available for first time home buyers (those buyers who had not owned a home in the three years previous to the current purchase) and was only available on homes that closed escrow before December 1, 2009.  However, President Obama signed an extension on this deadline to apply to any homes purchased from November 6, 2009 to May 1, 2010 and allowed all homes that have a binding sales contract signed by April 30, 2010 to qualify for the up to $8000 tax credit (based on purchase price of home), not just those homes that closed escrow.  In addition to the extension, existing homeowners may be eligible for up to a $6500 tax credit providing that they have used their current home as their primary residence for at least five consecutive years of the last eight years, meet the income requirements and are purchasing a new primary residence.  Vacation homes and income properties don't apply.

Requirements and Limits:

1. First time homebuyers who haven't owned a primary residence in the last three years.  Existing homeowners who have used their current home as their primary residence for at least five consecutive years of the last eight years.
2. For single or head-of-household tax filers, the limit for their modified adjusted gross income is less than $125,000.  For married couples who file a joint return, the limit is less than $225,000.
3. For consideration of partial tax credit, single or head-of-household tax filers can earn between $125,000-$145,000.  Married couples filing jointly who make between $225,000-$245,000 may also be eligible for a partial tax credit.
4. Purchase price of home must be less than $800,000 to qualify and must be the home buyer's primary residence.
5. Tax credit is considered refundable, meaning that if you owe less than the credit amount you qualify for, you will receive a tax refund for the difference of what you owe and the tax credit you are eligible for.  For example, if you are eligible for the full $8000 refund and you owe $5000 in taxes, you will receive a refund check for $3000 ($8000 tax credit minus the $5000 you owe).
6. You must make the home you purchased your primary residence for three consecutive years to keep the entire tax credit.  If you sell the property or stop using it as your primary residence within three years of purchase, you will have to repay the tax credit back to the government.

Remember that the amount of tax credit you are eligible for depends on the purchase price of the home.  So, the tax credit you actually receive may be less than the limit.  Also, the tax credit is only available on homes used for the home buyers' primary residence, not to any income or vacation property.