Help for Homeowners in Refinancing and Selling

IRS to help homeowners refinance or sell homes
Presented by Yahoo Finance

WASHINGTON – The Internal Revenue Service said Tuesday it will try to make it easier for homeowners in financial straits to refinance or sell their homes.

The plan announced by IRS Commissioner Doug Shulman would speed up a process where financially distressed homeowners may request that a federal tax lien be made secondary to liens by the lending institution that is refinancing or restructuring a loan.

Taxpayers will also be able to ask the IRS to discharge, or remove, its claim to a property in certain circumstances where the property is being sold for less than the amount of the mortgage lien.

“We need to ensure that we balance our responsibility to enforce the law with the economic realities facing many American citizens today,” Shulman said, stressing that “we don’t want the IRS to be a barrier to people saving or selling their homes.”

He said the program will focus on those people who ordinarily pay their taxes in full but “because of these extraordinary times are getting behind in their tax payments.”

A tax lien occurs when the government makes a legal claim to property as security or payment for a tax debt. The government thus notifies other creditors that it has a claim on the property.

The IRS can rule that its lien will be secondary to another lien, such as that of a lending institution, if it determines that taking a subordinate position will ultimately help with the collection of the tax debt. Taxpayers or their representatives may apply for a “subordination” of a tax lien if they are refinancing or restructuring their mortgage.

Lending institutions generally want their lien to have priority on the home being used as collateral.

Taxpayers may also request a certificate of discharge if they are giving up ownership of the property at an amount less than the mortgage lien if the mortgage lien is senior to the tax lien. A discharge does not relieve a person of the tax that is owed, but it does remove the lien on a particular property such as a home. The IRS would still maintain its lien on other possessions of the taxpayer.

Normally it takes about 30 days to rule on a request for a discharge or subordination of a tax lien, but Shulman said the IRS will work to speed up that process so there would be no delays for people trying to obtain new mortgage loans. The IRS urged people to contact the agency’s Collection Advisory Group early in the home sale or refinancing process.

The agency said it issues more than 600,000 federal tax lien notices annually and that currently there are more than 1 million outstanding tax liens tied to both real and personal property.

FOR REAL ESTATE INFO GO TO www.CentralValleyHomes.com

CAROL PERDEW
Prudential California Realty
(209) 239-7979
wwwCentralValleyHomes.com 

 

 

Check Your Credit Report to Avoid Mortgage Fraud

Homeowners who have equity in their homes are advised to check their credit reports to avoid criminals from carrying out mortgage fraud to tap into their home’s equity.  Check out this information below describing this problem and providing suggestions to avoid this from happening to you.

Thieves Tap Into Home Equity

by Bob Tedeschi

provided by the New York Times

Homeowners who have significant equity in their homes may be well-advised to check their credit reports frequently.

That is one conclusion of a recent report from the Identity Theft Assistance Center, a nonprofit industry group, which said that identity thieves had recently begun making targets of individuals with good credit because such people often have substantial untapped home equity.

A home equity line of credit is an ideal vehicle for criminals, according to Steve Bartlett, chief executive of the Financial Services Roundtable, a consortium of banking-related companies that offers financial support to the Identity Theft Assistance Center.

Mr. Bartlett said such credit lines are typically “big pools of money,” and if consumers do not regularly check their accounts, that pool can drain quickly.

The Federal Bureau of Investigation’s annual mortgage fraud report, which was released in April, cited home equity credit fraud as an “emerging scheme” in the slumping real estate and mortgage market.

Those with poor credit have been preyed upon by identity thieves in recent years, because thieves who pretend to be such owners could easily obtain mortgages from subprime lenders with little documentation.

Now that lenders have vastly tightened their lending criteria, criminals who specialize in mortgage fraud have little choice but to move upstream and seek out victims with good credit.

Home equity lines are a favorite option because they are almost as easy to open as a credit card account, as long as a criminal has the proper financial information.

In a typical scheme, the F.B.I. said, perpetrators pose as homeowners to establish home equity credit accounts online.

Criminals will then often send a fax to the bank requesting a wire transfer of funds to a different account. To verify the request, the bank unknowingly calls the perpetrator.

The F.B.I. does not break out various types of mortgage fraud by state, but in general, mortgage fraud is a bigger problem in New York, New Jersey and Connecticut than in many other states. New York is among the 10 states with the highest rate of mortgage fraud, while New Jersey and Connecticut rank in the top 20.

Mr. Bartlett, of the Financial Services Roundtable, said the region was a logical choice for mortgage fraud because of the relatively high value of homes there and the relatively high income of the residents.

Victims of such schemes are typically reimbursed by the lender if a bank investigation confirms fraud, Mr. Bartlett said. But lawyers who represent victims of identity theft said such remedies do not often come quickly or easily.

One way for a homeowner to determine if someone has created an equity credit line is to enroll in an identity fraud detection service like one offered by the Identity Theft Action Center, called ITAC Sentinel.

That service, which costs $10 to $18 monthly, will alert subscribers to credit inquiries or changes to an account.

Mr. Bartlett said that Identity Theft Action Center, a nonprofit organization, earns nothing on the service.

Services like ITAC Sentinel can also provide alerts to debt unrelated to home equity, like credit card accounts recently open in the subscriber’s name.

The major credit bureaus — Equifax, Experian and TransUnion — offer competing credit monitoring services. And a check of a credit report would also reveal a debt to a bank unknown to the homeowner or a debt to an existing bank that has suddenly grown larger.

CAROL PERDEW
Prudential California Realty
wwwCarolPerdew.com
(209) 239-7979

 

Banks Bid to Modify Home Loans

You could save your home Friday
Banks in Manteca in bid to see if they can modify loans on foreclosures

Dennis Wyatt
Manteca Bulletin
Managing Editor
     

There is a chance that a number of homeowners on the verge of losing their homes to foreclosure could walk away from the Manteca Senior Center on Friday cutting deals with lenders that makes it possible to stay put.

Five lenders – Countrywide, Indy Mac, Wells Fargo, Chase, and Washington Mutual – will have representatives on hand with many authorized to make loan modifications on the spot if they have all of the appropriate information from borrowers. For those who don’t have a loan through one of those five lenders, representatives of five different housing counseling firms that have HUD approval will serve as advocates.

“It means a lot to a lender when they get a call from someone that’s HUD approved,” said Ana Rocha, a Manteca Redevelopment Agency representative.

It’s all part of the grassroots non-profit No Homeowner Left Behind effort that has conducted nine similar efforts in the Northern San Joaquin Valley during the past year that have helped hundreds of families save their homes some times the same day of the workshop.

The Manteca gathering is this Friday from 2 to 8 p.m. at the Manteca Senior Center, 295 Cherry Lane. If you can’t make it Friday, there is also one Saturday from 9 a.m. to 3 p.m. at the Stanislaus Agricultural Center at 3800 Capricornia.

Edward Parcaut – a certified mortgage planner with SourceOne Financial in Modesto who is among the moving forces behind the effort to give homeowners in distress free help that arms them with knowledge and connections necessary to have a solid chance at saving their homes – noted that the chances of getting a resolution has improved significantly in recent months.

“A lot more banks are willing to take steps and modify loans upfront,” Parcaut said. “It saves them a lot more money.”

It’s based on the new reality of home loan math. For example, if a loan is outstanding for $477,000 a bank now realizes if it foreclosures on a home it can only get $277,000. It costs as much as $57,000 in additional costs to foreclosure. The bank looks at that, considers loan modification and is able to reduce their losses upfront.

There is no guarantee that a home can be saved on the spot, but the organizers say it happens every time – or within weeks of the workshop.

As for those that can’t save their homes as a bank may decide against loan modification based on financials and income, organizer Dori Beck noted, “we can work to make sure they leave their homes with the same dignity they had when they moved in.”

Those attending need to bring their loan information and documents, pay stubs for the past month, and current mortgage payment.

“There’s a huge chance it (a loan modification) can happen,” Parcaut said of those who attend the workshop.

The Federal Reserve is helping publicize the Manteca workshop by sending notices all the way back to June 1 who got foreclosure notices in San Joaquin County.

Rocha said the City of Manteca is participating in the effort under the direction of the City Council that wants to do everything it can to help people keep their homes in Manteca.

It is also open to those who have bought homes as an investment.

Parcaut said banks have worked with those people as well adding that many of those homes have renters in them who will lose a place to stay if the bank forecloses.

At such gatherings in the past, some homeowners have been successful with negotiating with bank representatives on the spot to secure 30-year fixed rate loans that have kept them in their homes,

Organizers have cautioned that not all banks are working to that degree. They also warned that some people might simply not be in a position to be helped based on the determination of the bank to get a streamlined loan at a reduced rate. The climate today has vastly improved compared to six months ago when banks were struggling to figure out what to do.

There are over 1,200 homes in Manteca property in various stages of foreclosure. Either the bank have repossessed them, they are in escrow to be transferred to another buyer, are in the final stages of having their home reposed or have just missed their first payment.

There is a serious concern about whether the market can continue to absorb foreclosures.

That is why some banks – but not all – are now working with those caught up in the foreclosure process.

For more information contact the Manteca Redevelopment Agency at 239-8427.  

 
CAROL PERDEW
Prudential California Realty
(209) 239-7979
www.CentralValleyHomes.com