Showing posts from June, 2012

Tax Effects of a Short Sale

Tax implications of a short sale for the borrower could be so significant that a short sale would not be in the borrower's best interest. Before a short sale is contemplated, it is strongly recommended that the borrower seek the advice of a professional tax adviser.

Generally speaking, any relief on indebtedness from a short sale, regardless of whether the loan is a recourse or non-recourse loan, is taxed as ordinary income. There are, however, some exceptions to this rule that may benefit a taxpayer involved in a short sale. For more information on the tax implications of short sales, see the CAR legal article 'Taxation of Foreclosures, Deeds in Lieu of Foreclosure and Short Sales.'

4th of July Fireworks

Is everyone ready for the 4th of July this year? I always enjoy the fireworks and activities tremendously. This year it seems like there is a lot more to choose from as far as venues and locations where they will have fireworks.

A great website for checking out what is going on in your area is The exact url is

Here you will find info on Cal Expo, Rancho Cordova, Folsom and other local areas. Last year I was overlooking the Sacramento River and that was a truly spectacular view. This year, I might finally check out what Cal Expo has to offer.

Do you have a favorite location for viewing fireworks? Post a comment, let me know!

Short Sale Homework

Tips for a Short Sale Seller

Spring home buying season off to strong start

California home sales and median price both jumped in April, with sales shooting up to their highest level in more than two years, and the median price rising above $300,000 for the first time in 16 months, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) recently reported.

Closed escrow sales of existing, single-family detached homes in California rose to a seasonally adjusted annualized rate of 555,300 units in April, according to information collected by C.A.R. from more than 90 local REALTOR® associations and MLS data statewide.  Sales in April were 10 percent higher than March’s pace and 11 percent higher than in April 2011.  The statewide sales figure represents what would be the total number of homes sold during 2012 if sales maintained the April pace throughout the year.  It is adjusted to account for seasonal factors that typically influence home sales.

The statewide median price of an existing, single-family detached home climbed 5.7 percent in April to $308,050, …

Loan approvals come with conditions attached

At the beginning of the year, a rumor was circulating that mortgage lenders were going to ease up on their stringent qualifying requirements, making it easier for buyers to buy and helping the housing market improve.
So far, that rumor has not been confirmed. If anything, the approval process has become more laborious. The home-sale market improved recently, resulting in significant lender backlog in underwriting and funding loans.

Many buyers haven't been able to remove their financing contingencies on time. A request for an extension of time from the sellers is common. Disgruntled sellers often don't understand why qualified buyers can't remove their financing contingency on time.
A delay can occur because the buyers and sellers negotiate on inspection-related defects. It can take a few days to a week for the parties to agree. The negotiations can result in a lower purchase price or a cash credit to be applied to the buyers' closing costs in consideration for the buy…

How long will you be underwater?

About 16 million homeowners owe more on their mortgage than their homes are worth, which means they are "underwater." So long as that condition continues, they have no equity that can be used to help finance the purchase of another house.

On the contrary, they can't sell the house without digging into their pockets to pay the difference between what they owe and what they can realize from the sale net of expenses.

But time heals most wounds, and negative equity is no exception. The principal component of the monthly mortgage payment reduces the loan balance by the same amount.

Refinancing into a mortgage carrying a lower interest rate reduces the interest portion of the monthly mortgage payment, thereby increasing the principal component and the rate at which the balance is paid down.

Although underwater borrowers generally can't qualify for a refinance, those fortunate enough to have their mortgages held by Fannie Mae or Freddie Mac comprise an import…

Home prices at new lows for downturn

A national home-price index that captures about 75 percent of U.S. properties in all nine Census divisions showed home prices falling 2 percent during the first quarter to a new post-crisis low.
The S&P/Case-Shiller National Composite is down 35.1 percent from its second-quarter 2006 peak, Standard & Poor's reported today. Two other S&P Case-Shiller indexes, the 10- and 20-city composites, are also at new lows for the housing downturn, although both were little changed from February to March.

Seven of 20 metros covered by the 20-city composite saw price declines from February to March, compared with 16 in last month's report. Five -- Atlanta, Chicago, Las Vegas, New York and Portland -- are at new lows for the downturn.

"While there has been improvement in some regions, housing prices have not turned," said David Blitzer, chairman of the Index Committee at S&P Indices, in a statement.

Blitzer noted some improvement from last month's …