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Frank Shamoo's Blog

By Frank & Jennifer Shamoo | Agent in Costa Mesa, CA
  • If I own a rental property in foreclosure, can I continue renting it?

    Posted Under: Home Buying in Orange County, Home Selling in Orange County, Foreclosure in Orange County  |  August 6, 2013 4:55 PM  |  348 views  |  No comments
    The owner of a rental property may continue renting it while there is a foreclosure case pending. Tenants are legally required to pay the rent during the foreclosure process. The borrower/owner only loses the right to collect rent upon the conclusion of the case when title is transferred to the winning bidder at the court sale (“the courthouse steps”). It is good practice and the right thing to do to be completely honest with the tenant about the legal status of a property in foreclosure and the landlord’s attorney can explain what is being done to defend the case. The lender has a remedy if it doesn’t like the fact the borrower is collecting rent and not paying on the mortgage—it’s called a “petition for assignment of rent,” which asks the court for an order ordering the tenant to pay the lender directly. Our firm has handled hundreds of residential foreclosures and has yet to see a lender pursue this relief.
  • Why Lenders ask if the borrower will repay the debt ...

    Posted Under: Home Buying in Orange County, Property Q&A in Orange County, Credit Score in Orange County  |  November 12, 2012 3:39 PM  |  286 views  |  No comments

    Lenders ask if the borrower will repay the debt. Lenders look at the borrower’s credit history, including the amount of money owed, the frequency of borrowing, the timeliness of bill payment, and a pattern of living within one’s means.

    The credit information compiled by national credit bureaus reveals a borrower’s history of handling credit. A credit bureau is an agency that collects and maintains up-to-date credit and public record information about consumers. A credit bureau may also be called a credit-reporting agency.  In addition to detailed financial information, credit bureaus give lenders a numerical score or a credit summary that projects a borrower’s expected credit performance. Credit bureau scores are based on the statistical relationship between information in a borrower’s credit files and his or her repayment practices. These scores accurately summarize a borrower’s likelihood of repayment. A FICO® score is one example of a credit bureau score. FICO® scores range in value from about 300, which denotes the highest risk, to about 850, which indicates the lowest risk. Another example of a credit bureau score is the MDS bankruptcy score, for which a lower score indicates lower risk. Lenders look for signs of stability such as how long the borrower has lived at the present address, if he or she owns or rents the home, and the length of current employment.Credit files also document the number and nature of recent credit inquiries and information from public records, such as declarations of bankruptcy and unpaid judgments. Because there is such an assortment of information the lender must consider, it is difficult to make an accurate assessment of a borrower’s credit profile.

     

  • Tenant Entitled to a 90-Day Notice to Terminate After Foreclosure

    Posted Under: Home Selling in Orange County, Rental Basics in Orange County, Property Q&A in Orange County  |  October 1, 2012 11:42 AM  |  284 views  |  2 comments
    Effective January 1, 2013...

    A month-to-month tenant in possession of a rental housing unit at the time the property is foreclosed must be given a 90-day written notice to terminate under California law. For a fixed-term residential lease, the tenant can generally remain until the end of the lease term, and all rights and obligations under the lease shall survive foreclosure, including the tenant’s obligation to pay rent. However, the landlord can give a 90-day written notice to terminate a fixed-term lease after foreclosure under any of the following four circumstances: (1) the purchaser or successor-in-interest will occupy the property as a primary residence; (2) the tenant is the borrower or the borrower’s child, spouse, or parent; (3) the lease was not the result of an arms’ length transaction; or (4) the lease requires rent that is substantially below fair market rent (except if under rent control or government subsidy). The purchaser or successor-in-interest bears the burden of proving that one of the four exceptions has been met. This law does not apply if a borrower stays in the property as a tenant, subtenant, or occupant, or if the property is subject to just cause rent control. This law will expire on December 31, 2019. This new California law is similar, but not identical, to the 90-day termination notice requirement under the federal Protecting Tenants at Foreclosure Act (12 U.S.C. § 5201, et seq.) (as extended by the Dodd-Frank Wall Street Reform and Consumer Protection Act), which is set to expire on December 31, 2014.
  • Your Ticket to Freedom from Mortgage Frustration

    Posted Under: Home Buying in Orange County, Home Selling in Orange County, Property Q&A in Orange County  |  July 23, 2012 8:40 PM  |  177 views  |  No comments

    In the news, there is talk of a housing recovery. Experts feel more optimistic about the state of housing industry in America. However, if you or someone you know is one of the millions of homeowners who is stuck with a home on which you owe more than the property is worth, the feeling of helplessness can be overwhelming and frustrating.

     

    Many people don’t realize that just because they are in danger of losing their home to foreclosure doesn’t mean they have to wait around for it to happen. With help, they can take matters into their own hands.

     

    CLAIM YOUR TICKET TO FREEDOM!

     

    As a Certified Distressed Property Expert (CDPE), I make it my business to know all of the ins-and-outs of the options that are available for people who are in danger of losing their homes and help the challenges head-on.

     

    Take a look at the information on this site and then Contact me today to schedule a free, confidential consultation.  http://www.HelpUshortSale.com


    The Shamoo Team

    Frank Shamoo


  • Will Mortgage Forgiveness Debt Relief Act Be Extended?

    Posted Under: Home Selling in Orange County, Foreclosure in Orange County, Property Q&A in Orange County  |  July 23, 2012 4:14 PM  |  214 views  |  No comments
    Many of our clients have asked whether or not we believe the Mortgage Forgiveness Debt Relief Act of 2007 will be extended past its current expiration scheduled for the end of the year. As a reminder, the legislation ensures that homeowners who received principal reductions or other forms of debt forgiveness on their primary residences do not have to pay taxes on the amount forgiven.

    The reason this act is important in today’s housing market is that, without the act, debt reduced through mortgage modifications or short sales qualifies as income to the borrower and is taxable. If the legislation is not extended, then it would require homeowners to complete a short sale or modification prior to year’s end in order to avoid a tax consequence.

    “Obama’s FY2013 budget proposal includes an extension of the Mortgage Forgiveness Debt Relief Act of 2007…  

    In the Treasury’s Green Book, its summary explanation of the administration’s budget proposal, it calls for an extension of the tax break due to “the continued importance of facilitating home mortgage modifications.”

    The administration is proposing an extension that would apply to any amounts forgiven before January 1, 2015.”

    In today’s political environment, the passage of any budget proposal could be considered doubtful. However, both parties seem to be in agreement that this provision should be extended. We can only hope that it doesn’t fall victim to an election year.

    THE SHAMOO TEAM!


  • 2007: Mortgage Forgiveness Debt Relief Act of 2007 ****(Expires 12/31/2012)****

    Posted Under: Home Selling in Orange County, Foreclosure in Orange County, Property Q&A in Orange County  |  July 19, 2012 11:48 AM  |  227 views  |  No comments
    You may not have to claim income from forgiven debt after a short sale.

    If you are a homeowner whose mortgage debt is partly or entirely forgiven during tax years 2007 through 2012, you may be able to claim special tax relief and exclude the debt forgiven from your income.
    Here are 10 facts the IRS wants you to know about Mortgage Debt Forgiveness (Taken From IRS.gov).

    1. Normally, debt forgiveness results in taxable income. However, under the Mortgage Forgiveness Debt Relief Act of 2007, you may be able to exclude up to $2 million of debt forgiven on your principal residence.

    2. The limit is $1 million for a married person filing a separate return.

    3. You may exclude debt reduced through mortgage restructuring, as well as mortgage debt forgiven in a foreclosure.

    4. To qualify, the debt must have been used to buy, build or substantially improve your principal residence and be secured by that residence.

    5. Refinanced debt proceeds used for the purpose of substantially improving your principal residence also qualify for the exclusion.

    6. Proceeds of refinanced debt used for other purposes -- for example, to pay off credit card debt -- do not qualify for the exclusion.

    7. If you qualify, claim the special exclusion by filling out Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness, and attach it to your federal income tax return for the tax year in which the qualified debt was forgiven.

    8. Debt forgiven on second homes, rental property, business property, credit cards or car loans do not qualify for the tax relief provision. In some cases, however, other tax relief provisions -- such as insolvency -- may be applicable. IRS Form 982 provides more details about these provisions.

    9. If your debt is reduced or eliminated you normally will receive a year-end statement, Form 1099-C, Cancellation of Debt, from your lender. By law, this form must show the amount of debt forgiven and the fair market value of any property foreclosed.

    10. Examine the Form 1099-C carefully. Notify the lender immediately if any of the information shown is incorrect. You should pay particular attention to the amount of debt forgiven.

    The Short Sale Services We offer:

    • Negotiated Short Sale Service at No Cost To Homeowner

    • Free, Confidential, and No Obligation Consultation .

    • Short Sale is No Cost to you. The bank will pay the all the commissions and closing costs.

    • No Obligation. Cancel your listing at any time.

    • Weekly Updates on the status of your Short Sale.

    • Industry proven short sale system with a 100% success rate; over 385 approved short sales.

    • Experience. I've worked with all the major lenders.

    • You may remain in your home during the short sale process.

    • We are sympathetic to your needs and we will hold your hand the entire time.

    The Shamoo Team

    Frank Shamoo

    www.ShamooTeam.com

    www.HelpUshortSale.com



  • BOTTOMING OUT? CASH IS KING!

    Posted Under: Home Buying in Orange County, Home Selling in Orange County, Foreclosure in Orange County  |  July 5, 2012 7:13 PM  |  221 views  |  No comments

    BOTTOMING OUT

    A buyer said, "I felt like we were sort of at the bottom, "If the market was still going down, I would have rented another year."

    We started looking at existing homes last summer, hoping to get a house. But the new-home market seemed like a better deal, so they decided to compromise for now, and if the buyers  business does well, they'll rent out there condo and buy a house down the road.

    "We have extremely attractive interest rates, extremely attractive prices," they said.

    "Buyers have come to their own conclusions that it is smart to buy now," Frank Shamoo of LocalHotPads.com. "The only trouble with that is scores of shrewd buyers have figured it out all at the same time. Thus, there is tremendous competition."

     "distressed inventory" of foreclosures and short sales now account for 18 percent of the market, down from 35 percent of the market in the spring of 2011.

    "There is a palpable sense that we not only have reached bottom, but that we are starting to recover," he wrote.

    CASH IS KING

    That in some ways it's reminiscent of the housing peak, but with a key difference: No longer do you see 100 percent, no-down-payment mortgages.

    "Now, "cash is king."

    Homes in the $300,000 to $500,000 price range are most in demand.

    "If you have a house in that price range and it's standing, it's going to get offers,"You have a lot of investors, and you have a lot of first-time buyers. It makes sense. ... There's a lot of cash that's looking for a place to go."

    Most of our buyers at The Shamoo Team decided to quit being renters because they didn't want to miss out on the low interest rates and the low prices.

    Frank Shamoo
    www.HelpUshortSale.com
    The Shamoo Team
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