Last month, the Department of Housing and Urban Development (HUD) issued new guidelines for lender notice to homeowners who are delinquent in the payment of their FHA loans. If you are delinquent, here’s what you can expect within sixty days after you are delinquent: 1) In the second month of your delinquency, you should receive a letter from your lender including specific information about your past due payments, the lender’s contact information (including a toll free number for their loss mitigation department), a toll-free number you can call to get information on housing counseling agencies approved by HUD, and a request for your current financial information. 2) In the second month of your delinquency, you will also receive a brochure, sent to you by your lender but prepared by HUD. The brochure is called: Save Your Home: Tips to Avoid Foreclosure. These requirements kick in on February 10, 2014, and… read more →
According to CoreLogic, a data and analytical firm, the shadow inventory in today’s market is at its lowest level in five and a half years. There are only 1.7 million homes in the shadow inventory nationwide, a drop of nearly 25% from this time last year. Unfortunately, this is still a lot more homes than what CoreLogic says is a “healthy” shadow inventory — only about 650,000 homes. CoreLogic states that shadow inventory was decreasing at the rate of 46,000 homes per month last year. While that’s good news for a depressed economy, the foreclosure rate is still high. At the end of 2013, there were about 810,000 homes in foreclosure. That’s 400,000 fewer homes in foreclosure than at the end of 2012, but it’s still a lot of foreclosure.
The appellate court recently came down hard on a buyer who reneged on his purchase contract. In 1472 Milwaukee, Ltd. v. Feinerman, 2013 IL App (1st) 121191, the court affirmed the trial court’s judgment that the buyer should be responsible for losses the seller incurred when the buyer defaulted on his contract to purchase real estate. Back in 2006, the defendant contracted to purchase a commercial building located on Milwaukee Avenue in Chicago from plaintiff for $1.2 million. However, defendant never showed up for closing in mid-November as scheduled. The closing was rescheduled, and again, the defendant was a no-show. The plaintiff re-listed the property, and eventually sold it for $911,500 in July of 2007. Subsequently, plaintiff filed suit for the difference between the original and eventual purchase price, as well as plaintiff’s carrying costs for the eight months in the interim between when the property was supposed to close,… read more →
If you read my blog, you may already know that alternative energy tax credits are available through 2016. However, here’s what you may not know: If you are selling, or will be selling, the excess electricity generated through your new solar equipment back to the utility company, you won’t qualify for the whole tax credit. To refresh your memory, you can claim a tax credit of up to 30% of the cost of certain alternative-energy improvements, so long as those improvements are completed prior to the end of 2016. But, if you are making more energy than you need to power your own home and selling it back to the utility company (called “net metering”), then you can only claim a tax credit of up to 30% of the cost of the equipment actually used to power your OWN home. So if you spend $15,000 on solar panels, technically you should… read more →
This Friday, new rules go into effect for mortgage servicers. Here’s what you should know: 1) If a borrower defaults, the servicer must contact them within 36 days. The servicer must contact the borrower after every missed payment thereafter. At least once every six months, the servicer must contact the borrower in writing. 2) By the 45th day after borrower defaults, the servicer must give the borrower a written list of possible loss mitigation options. By the time the servicer sends this notice, a specific person must be assigned to the borrower’s file. 3) In the event a borrower submits a loss mitigation application 45 days or more before the foreclosure date, the bank has only five days in which to respond and notify the borrower if there are any missing documents, or if the application is complete. If there are missing documents, the bank must allow at least 7… read more →
If you are looking to get and FHA-insured loan for a higher-priced purchase in 2014, you may be out of luck. HUD has announced new maximum limits for the 2014 calendar year. The maximum FHA-insured mortgage loan in 2014 will be $625,500. That’s nearly a 15% decrease from the amount currently allowed, $729,750. 650 counties throughout the country will be affected. Standard streamline refinances that meet all of the other requirements will not be affected by this decrease.
Last month, the Consumer Financial Protection Bureau announced a new tool to assist homeowners in anticipation of the new mortgage rules taking effect in January 2014. The purpose of the tool, which can be accessed here, is to connect homeowners with local housing counseling agencies. Effective January 10, 2014, mortgage lenders will be required to give mortgage applicants a list of housing counseling agencies. In case they do not have their own lists available by that time, they can use the tool provided by CFPB. The new online tool will help homeowners and home buyers find the closest HUD-approved counseling agencies. It will also list the languages spoken at each agency, as well as list the specific services available there.
Lenders who are FHA-approved and lend on single-family property now face a new set of reporting requirements. Effective last month, lenders must report “material findings” of suspected fraud or material misrepresentation, discovered through the lender’s quality control process, directly to the Federal Housing Administration. The lender must also disclose what the lender is doing to resolve the issue. Any issues that have already been resolved need not be reported. So, what’s a “material finding”? A material finding is any finding that would have caused the lender to disapprove the loan or not request an FHA endorsement had the lender discovered the material finding before the loan was approved. For example, if the borrower would not have qualified under FHA guidelines but was approved anyway because of the lender’s failure to verify his eligibility, income, employment, credit, or the appraisal of the house, that would constitute a “material finding”. If the home the borrower… read more →
If you are making, or thinking about making, certain large-scale alternative-energy improvements to your home, there’s good news for you. You can get a tax credit for 30% of the cost of these improvements. And you have plenty of time to make the improvements too — all the way through 2016. There is no limit on the tax credit for these improvements, except that they cannot exceed 30% of the cost of labor and installation. To qualify, you must install certain types of equipment, such as solar panels, solar water heaters, wind-energy systems, fuel cells or geothermal heat pumps. More information is available on the IRS’ web site. If you’re not making such large changes to improve your home’s energy efficiency, you may still qualify for certain tax credits for 2013. Click here for more information.
Recently, JP Morgan Chase finally settled a lawsuit alleging that they had sold bonds backed by “toxic” residential mortgages between 2005 and 2008, and misled investors in the process. The settlement amount, $13 billion, includes a $2 billion fine paid to the Department of Justice (“DOJ”). Additionally, a portion of the funds will be used for homeowner relief. Specifically, $500 million are earmarked for loan modifications, and $1.5 billion are meant to be used for principle reductions. $2 billion are set aside to forgive the principal balances on homes that are vacant but are not foreclosed yet, to demolish deserted homes, and to assist low and medium-income borrowers who are trying to finance a purchase. $100 million is coming to Illinois, and other states will divvy up close to $1 billion. The bank has until 2017 to complete the delivery of relief to homeowners and borrowers. Much of the rest… read more →