NEW HELP FOR CA CONDO BUYERS
NEW HELP FOR CA CONDO BUYERS
Common interest developments (CDIs), such as condominium or townhome groups, more commonly known as homeowner associations, are required by law to provide prospective buyers with specific documents, explaining in detail the rules, covenants, conditions, restrictions and the financial standing of that association.
The prospective buyer is expected to read the documents and accept the terms stipulated before they complete the purchase of a unit in the association. Once the buyer agrees to those terms, they must comply or face punitive and/or legal action.
In California, some of these associations decided that they did not want to incur the costs of providing the required documents and farmed the task out to third party vendors who often charged exorbitant fees for their services. Vendors would also bundle required documents with non-essential documents, charging for the entire package. In some cases, buyers did not know the charge for the documents until they were are the closing table.
Prospective buyers finally resorted to litigation to remedy the inequity but the courts upheld the system then in place.
Assemblyperson Betsy Butler (D-Torrance) introduced AB771 to stop the bundling practice, and instituting a process requiring the provider to disclose all fees in advance. Governor Jerry Brown just signed AB771 into law. Now a buyer can decide if they wish to pay the fees or walk away from their purchase.
Select this link to read the California Association of Realtors story:
http://www.car.org/newsstand/newsreleases/2011newsreleases/ab771signature/
WILL REFINANCING EFFECT YOUR TAX DEDUCTION?
WILL REFINANCING EFFECT YOUR TAX DEDUCTION?
With mortgage interest rates at or close to record lows, many homeowners are refinancing their existing loans. Those in a position to do so are taking advantage of the current market. After all, who would not wish to reduce any expense if the opportunity presents itself?
Homeowners should investigate the tax consequences of this action. Not all refinances are going to give them the tax write-offs that they may be expecting. Much depends on the type of loan they take out and whether the loan is a rate-and-term (the loan amount is only that which will pay off the former loan) or not is key. Cash-out loans (a loan where the borrower gets a cash sum over and above the current amount owed on the home) may or may not provide the borrower with full interest deductions. Much depends on how that cash is used. Cash used to repair or upgrade the home is not likely to change the tax deduction. Cash use for a child’s education, a vacation or new car will probably have an impact.
Select this link to view the Inman News story in this subject:
http://lowes.inman.com/newsletter/2011/09/07/news/151667
If you are considering a refinance and interested in learning just how the current interest rates are, feel free to give us a call.
BANKS APPROVING MORE SHORT SALES!
BANKS APPROVING MORE SHORT SALES!
A short sale is a borrower/owner’s attempt to sell their home for less than they owe to their lender(s). Once they get an offer, they submit it to the lender(s), asking for approval. In California, if approval is given, the lender forgives the borrower for their debt commitment.
For example, a borrower/owner purchased a home for $300,000 several years ago, taking out a loan for $270,000 to complete the purchase. If, and only if, he has a financial hardship that the lender(s) will accept, he can put his home on the market for the current market value, say $ 150,000. Once he receives an offer for the $ 150,000, he will submit it to his lender(s) for approval. If the lender(s) approve the short sale, the borrower/owner is of the hook for the unpaid balance of the $ 270,000 loan.
Additionally, the impact of an approved short sale on that borrower’s credit is far less damaging than a foreclosure would be. Borrowers who go through an approved short sale can usually qualify for a loan to buy another property in two years. Therefore, a short sale is a better option than most others are for borrowers who are having trouble making their mortgage payments. Of course, their financial hardship is the key.
Short sales have been a major segment of housing market activity for several years. In the early stages of the recent down turn, lenders were reluctant to approve many short sale requests. Lenders were not prepared for the volume of requests and were quickly buried with paperwork. They have been adding staff and implementing procedures to handle the volume, but not quickly enough.
Lenders are well aware of the fact that approving short sales for borrowers with legitimate hardships is far less costly to the lender than going through a foreclosure. As they get their house in order, we were bound to see an increase in short sale approvals.
We are pleased to report that all indications are that lenders are turning the corner and now approving more short sales. Select this link and read the entire Bloomberg article:
If you, or someone you know, are having difficulty making your mortgage payments and need assistance, feel free to contact us. There is no charge to the distressed homeowner for our services. We are short sale specialists.