Justin Brennan's Blog
-
Deed in Lieu FAQ - Help with your options
Posted Under: Home Selling in San Diego County | May 24, 2010 6:14 PM | 680 views | No comments
Deed in Lieu
A Deed in Lieu of Foreclosure is an alternative to a foreclosure. This is a way to settle voluntarily and in good faith in which the borrower surrenders their home to the lender and moves on. The advantage for the borrower is that it releases them from the debt associated with the defaulted loan. The borrower avoids a painful and time consuming foreclosure. The advantage for the lender is a reduction in the cost and time of foreclosing on the property. Learn more a www.TheLaJollaLife.com
In most cases a lender will only accept a deed in lieu if there are no other liens, 2nd mortgages or debts attached to the property or these liens can be significantly negotiated. This is due to the fact that the bank does not want to be responsible for the other liens that are attached to the property; this is why most lenders will push for a foreclosure instead because it removes all junior liens. However, this being said, the laws and rules are rapidly changing every day and If you are in a tough spot and simply want advice or questions answered as to which direction may be best for you, give me a call. No obigation, just straigh talk. I hope this helps. Learn more about a Short Sale Vs Deed In Lieu?
Deed in Lieu of Foreclosure - FAQ Deed-in-Lieu
Frequently Asked Questions
Q: - When a mortgagor has been approved for utilizing a DIL of foreclosure, how much time does a mortgagee have to complete the DIL?
ANSWER -A DIL of foreclosure must be completed within 90 days of initiation of the process.
Q: - Does HUD allow $2,000 to pay off second liens when determining if a mortgagor is eligible for a DIL? (this is very important to know and we have utilized this option. Many so called experts say you can't use a Deed in lieu of foreclosure if you have two mortgages. )ANSWER - Effective with Mortgagee Letter 2002-2013, HUD increased the DIL of foreclosure consideration to not to exceed $2,000. Therefore, with the mortgagor's consent, this consideration may be utilized to pay off junior liens to clear the title as stated in Mortgagee Letter 2000-05. Want Short Sale FAQ?
Q: - What is HUD's process for acceptance of a DIL of foreclosure on an asset that is "structurally damaged?"
ANSWER - For servicing purposes, the mortgagee is to substantiate their business decision by what is stated within the mortgagee's Quality Control Plan. For conveyance purposes, the mortgagee is to seek approval from the REO Division Director that has jurisdiction over the property. Need a Short Sale expert in San Diego?
Q: - Can a mortgagee revert from a foreclosure process to the acceptance of a DIL from a mortgagor?
ANSWER - This is a business decision the mortgagee is to decide based upon what is stated in the mortgagee's Plan. You will need to speak with an attorney
Q: - Does a mortgagee have the ability to accept a DIL of foreclosure when there is an existing Partial Claim?
ANSWER - Per Mortgagee Letter 2000-05, page 37, paragraph E. Condition of Title, it is possible for a mortgagee to consider a mortgagor for a DIL when there is a Partial Claim lien. With the mortgagor's consent, the consideration payable to the mortgagor may be utilized to affect a discharge of lien.
For more info on comparing Deed in Lieu Vs Short Sale click here -
Should I Buy a House in this Market?
Posted Under: Home Buying in San Diego County | May 19, 2010 10:00 AM | 600 views | No commentsDo You Ask Yourself:
Should I Buy a House in this Market?
Look: Here is the deal. I know you are thinkin I must be writing this because I want people to buy so I ( Justin) can make some money regardless of whether it is a good decision for your family. The Truth: Yes I make money if you buy or sell, but my business is 95% referrals based on past clients who i serve flawlessly. It does me no goods to put people into a worse situation then they might have already been in by renting. I am telling you that you need to buy a home because if you don't buy while rates are low and prices are low, you will be punching yourself in the face in 12 months... mark my word. I am dead serious when I tell you this country is in trouble and the sooner you can grab you piece of the American dream with a 30 year 5% fixed rate mortgage, you are locked in for a smooth ride regardless of market turmoil. Now is the time people. Even if you don't use me, please buy if you can and write back in 3 years to thank me as I love great family stories. I hope all your dreams come true. If you want me to help you find that special deal and special home visit my website www.TheLaJollaLife.com
READ MORE REASONS:
During most of the last decade and in most of the country, renting a home has usually been a better financial move than buying one. This has been true in Southern California, San Francisco, Phoenix, Las Vegas, and large parts of Florida, the Pacific Northwest and the Northeast.
Although renting would have typically saved thousands of dollars a year, the situation is getting more complicated because the housing bust has been playing out unevenly across the country. In New York and Los Angeles, average house prices have fallen enough that buying may now be a good deal for many families. The federal tax credit has urged an influx of people to take advantage of $8,000 before it expires and before mortgage rates begin to rise.
Camela Witters of Las Vegas explains that she plans to close on her first home, which is identical to the one she is now renting, when she found out that she could save money by doing so. She states that she "didn't buy a home when everyone else did, so I'm kind of taking advantage of all the foreclosures."
A simple way to calculate whether to rent or own is to review the Rent Ratio: the purchase price of a house divided by the annual cost of renting a similar one. If the ratio is above 20, then renting should be considered and if the ratio is below 20, the case for buying becomes a lot stronger. In New York, Los Angeles, and Houston, the average ratio is 16 or lower where in the Bay Area, it remains at 30.
"In most markets, you're better off buying," accounting professor, Thomas Lys, states. "But once the ratio gets to 25 or 30, I'd say, 'You know what? There may be a bubble.'"
Obviously, owning a home brings benefits that are not strictly financial offering stability and comfort. In other words, "A family confident that it will stay put for a decade or more may well be wise to buy today."Average house prices have fallen enough that buying now may be a good deal
Mortgage Rates are expected to rise in the coming months
If the Rent Ratio is below 20, the costs of owning can be less than the costs of renting
Owning a home offers stability and comfort
-
The New Liar Loans Part 2 : Truth Be Told for Modifications
Posted Under: Home Buying in San Diego | May 6, 2010 11:32 AM | 910 views | 2 commentsHate to play Devils Advocate: Don't Kill The Messenger
Does anyone really think that homeowners can afford to pay 60% of their income for housing? Apparently, the architects of the latest loan modification program called HAMP do. Government officials are touting that they are saving the housing industry by modifying more than 1 million loans to date, and converting 170,000 of those to "permanent" status, with many more to come. www.TheLaJollaLife.com for short sale info FAQ and more...Those so-called "permanent modifications" cost the Borrower 31% of their income today, but the Borrower still has 60% of their income going to total debt obligations (credit card, HELOC, car payment, etc.). These statistics, known as the Back-end Debt to Income ratio, can be found on page 4 located here . Although not disclosed, we believe most of these loans exceed 100% LTV today as well. This is nothing more than a fully documented version of the same garbage that took down the banking system two years ago, and this time the Federal government rather than Countrywide and New Century are underwriting it. Almost all of these Borrowers will eventually re-default. Compare a Deed in Lieu vs Short Sale?
It is very obvious that the architects of HAMP are short-term focused, and are tricking us into thinking they are solving the problem by calling these permanent modifications. Until these loans are renamed, let's call them "Liar Loans 2," except this time the liar is the Bank of the United States rather than the Borrower because this modification is anything but "permanent". We do believe that stabilizing home prices and the banking system are critical to the recovery of the U.S. economy, but let's at least tell the truth about what is being done.
What this means for you is that the housing recovery that is being touted by elected officials is far from assured. There will be fewer homeowners thrown out on the street this month than would have occurred otherwise, but they will be tossed out later. The modification programs have helped stabilize home prices around the country, mostly because they have created so much confusion that people can live in their home for free for one year or more, and are buying time for thousands of banks to continue improving their balance sheets with earnings from good loans, while deferring the write-off of bad loans. The biggest beneficiaries of this program are the banks with the largest Home Equity Loan portfolios, which are also the banks needed to provide capital to businesses to start hiring again. Avoid Foreclosure. Get Tips and FAQ
How does this change things? We will be adding 170K additional future foreclosures to our forecast, with many more to come, and guiding our clients through these turbulent times by analyzing every indicator we can get our hands on. Despite the negative tone of this email, there are and will continue to be plenty of opportunities to make money, particularly taking advantage of the distressed selling that will go on for years, but having a long term investment horizon. Also, the national housing market is becoming more local than ever, which means those with local market knowledge, or the ability to roll up all of the local factors into a national view, will make the most money. In other words, those who do their homework will get straight A's. www.TheLaJollaLife.com for Short Sale info.
Source: John Burns Real Estate Consulting -
Short Sale FAQ | Deed in Lieu | Foreclosure Options
Posted Under: Home Selling in San Diego County | May 4, 2010 9:21 AM | 922 views | 1 comment
Deed in Lieu vs Short Sale?
Tax Consequences
The Mortgage Debt Relief Act of 2007 only applies to purchase money and doesn’t apply to cash out refinances unless you have proof that it went back into remodeling the home. Purchase money used to buy second homes or investment
properties is not eligible.Borrowers who's refinances do not qualify for the Mortgage Debt Relief Act of 2007 can turn to tax negotiators such as Tax Masters to help negotiate taxes after they have received a 1099C, help with proving insolvency for tax form 982, or any other debt cancellation from tax on the unpaid debt the servicer has written off. For more short Sale FAQ visit the
Short Sale FAQ center with Justin BrennanHow the Credit Agency Reports Short Sales
Most credit reporting agents have been reporting short sales as "settled less than full". Many agents tell their clients that it won’t affect their credit and/or it is reported differently, misrepresenting how the deficiency judgment is expressed on the approval letters.
- Have you ever told your clients, “Don’t worry, they won’t pursue the debt”?
- How about, “You can negotiate it on the back side”. This is true, but make sure they do their homework and find a company that can do this before they blame you later for giving them false information.
How Secondary Debt is Treated
- Most seconds reserve the right to collect the debt at a later time, so do not tell your clients that all of the remaining debt will be forgiven.
- If they do not plan to collect the debt, they will 1099C the client.
- Have you ever told your clients, “Don’t worry, they won’t pursue the debt”?
-
Great 4 Min April 2010 San Diego Real Estate Market Update. Youtube with Justin Brennan
Posted Under: Home Buying in San Diego | April 29, 2010 11:48 AM | 877 views | No comments
Real Estate Highlights:
March Sales at 2006 Levels: March 2010 sales were significantly higher than March 2009 sales and in fact reached near March 2006 levels. Trends seem to indicate a very strong selling season.
Inventory Declining: In January and February of this year inventory was rising probably due to seasonal factors. During the month of March inventory took a sharp decline, confirming a very strong Seller’s market. To get more info about La Jolla visit www.TheLaJollaLife.com
Prices Rising: According to the Case – Shiller Index, San Diego County aggregate prices continue to rise. Prices are rising the fastest in the bottom third of the market (below $306,000) while the top third of the market (above $460,000) is essentially flat. Note that year-over-year price levels are actually above last years prices in all price ranges.
Monthly Mortgage Resets: An updated version is shown (March 2010) of the Credit Suisse mortgage reset chart that usually appears in this presentation. The original chart was generated in 2007. For comparisons sake I tried to match the time frames between the two charts to see what has changed. If the 2010 chart is correct it shows resets and recasts will continue well into 2012 with a peaks in the second half of 2010 and late 2011/2012. Note that this chart projects the mortgage resets not really ending until late 2012. A major change between the two charts appears to be the earlier chart showing these adjustments ending in early 2012. The new chart also shows a reduced but still significant amount of resets and recasts in 2013, the previous chart showed 2013 being much lower.
Foreclosures Rise: Notices of Default rose sharply last month from the previous month but remained within the past range of about 2,000 to 3,000 per month. Interesting that the Notices of Default continue at a steady pace while inventory is shrinking.
Building Permits Level Off : Across the U.S. and in San Diego County building permits appear to be slightly rising from a very low level. This is the first uptick nationally since early 2006 and the first uptick in San Diego County since the middle of 2004. It is too early to determine if building permits are bouncing along the bottom or are actually getting ready for sustained growth. To learn more about Justin and his La Jolla Development with family check out TheLaJollaLife.com development page.
Economic Highlights:
Consumers continue to shed debt as this chart shows. Note the year-over-year decline in the Financial Obligations Ratio is the largest since at least 1980.
Unemployment Steady: The Unemployment Rate held steady at 9.7% and the Average Weekly Hours Worked rose from last month to 33.3 hours. Check out more market info and Short Sale FAQ at TheLaJollalife.com
Consumer Credit Continues to Decline: Year-over-year consumer credit continued to decline at almost a 5% rate while year-over-year revolving credit declined at a rate of about 10%. -
Wild Aerial Tour La Jolla, CA 3 Min Video
Posted Under: Home Buying in La Jolla | April 13, 2010 2:53 PM | 930 views | No comments
La Jolla Ca is such a beauitful place. La Jolla Agent Justin Brennan has created a wild 3 minute tour of La Jolla CA. If you are interested in buying or selling a home in La Jolla, CA or San Diego. Contact Justin Brennan. www.TheLaJollaLife.com
Justin uses a very unique marketing approach tarketed at the heart of emotional decision making in real estate.
"It's all about telling the story of your home. Facts tell, stories sell" Justin says.
"I have learned a lot about branding and marketing from my college dormmate and fraternity brother Madison Hildebrand from Bravo's "Million Dollar Listing. It is a true joy to help families find their dream home."
Learn more about his unique marketing approach. -
No More CA State Tax on Short Sales and Debt Foregiveness
Posted Under: Home Selling in San Diego | April 13, 2010 2:18 PM | 989 views | 2 commentsBreaking News: 4-13-10
More Short Sale FAQ and Short Sale Process
Read Below. Justin Brennan - San Diego Agent : News Alert.
Distressed homeowners no longer have to pay California state income tax on debt forgiven in a short sale, foreclosure, or loan modification. Enacted into law yesterday, Senate Bill 401 generally aligns California's tax treatment of mortgage debt relief income with federal law. For debt forgiven on a loan secured by a "qualified principal residence," borrowers will now be exempt from both federal and state income tax consequences. The existing federal exemption is for indebtedness up to $2 million, whereas the new California exemption is for indebtedness up to $800,000 and forgiven debt up to $500,000. Visit www.TheLaJollaLife.com for more info on San Diego Short Sales, FAQ, and Process with Justin Brennan
"Qualified principal residence" indebtedness is defined as debt incurred in acquiring, constructing, or substantially improving a principal residence. It includes both first and second trust deeds. It also includes a refinance loan to the extent the funds were used to payoff a previous loan that would have qualified.
More Short Sale FAQ and Short Sale ProcessThe tax breaks apply to debts discharged from 2009 through 2012. Californians who have already filed their 2009 tax returns may claim the exemption by filing a Form 540X amendment.
Taxpayers who do not qualify for the above exemptions (e.g., second home or rental property) may nevertheless be exempt under other provisions. Most notably, taxpayers who are bankrupt are exempt from debt relief income tax. Also, taxpayers who are insolvent are exempt from debt relief income tax to the extent their current liabilities exceed current assets.For more information about mortgage forgiveness tax consequences, go to California Franchise Tax Board's Mortgage Forgiveness Debt Relief Extended webpage and the Internal Revenue Service's Mortgage Forgiveness Debt Relief Act and Debt Cancellation webpage. The full text of Senate Bill 401 is available at www.leginfo.ca.gov.
C.A.R. provides REALTORS® with many legal articles covering a wide range of topics of interest. Some of the new or newly revised legal articles available at http://qa.car.org/ are as follows:
