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Archive for March, 2011

DC title insurance rates decrease (especially for refiances)

It seems like prices never go down. Gas prices have gone up, taxes have gone up, the 5-cent bag tax has increased the cost of shopping, etc. And yet, sometimes, if you look closely enough, you can find prices that actually do drop. In this case, prices have dropped for refinancing borrowers by 40%.

First American Title Insurance Company, our title insurance underwriter, published their new title insurance rates effective April 1, 2011. The purchase title insurance rates remained unchanged, except for purchase prices in the highest brackets where the rate dropped considerably.

The big change is in the refinance category. First American has dropped their refinance loan policy rates by 40%! In essence, every refinance in Washington, DC will obtain a discount equal to what was previously the full reissue rate discount.

Previously a 40% discount on title insurance was available on a refinance, but the borrower had to jump through some hoops to be eligible. The full 40% discount was only available if the borrower had previously purchased a title insurance policy and if the policy was under 10 years old and if the prior policy was for an amount greater than the amount of the new loan. Often clients either did not know where or how to find their title policy, and often clients who may have been eligible for the discount were not obtaining it. And frankly, often title companies kept the reissue discount a secret, not revealing it to a client unless the client asked for it.

Well, with this new change by First American, every refinance will obtain the equivalent of the old reissue rate discount, even if the refinance would not have been eligible under the prior guidelines. What does this mean for a borrower? It means that refinancing borrowers will save hundreds of dollars on their closing! For example, previously a refinance for $500,000 would have included a $2,100 for lender's title insurance. As of April 1, 2011, a refinance for $500,000 will now include a charge of $1,260 for lender's title insurance � a savings of $840.00!

We've updated the refinance rate chart is posted on our website. While you're there, check out this homebuyer video for a better understanding of title insurance and what title insurance does for you.

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6 real estate headlines: 31-Mar

A daily dose of headlines for real estate agents, mortgage lenders, homebuyers and home sellers.

What you can (and can't) deduct at tax time
HSH
: You must itemize your deductions on a Schedule A for these homeowners' deductions to apply. If you take the standard deduction, you can't take a deduction on mortgage interest.
NAR estimates shadow inventory by state
Mortgage News Daily
: The number of homes in the shadow inventory is not the problem. The difficulty lies in how long it will take before those homes are cleared.
Market for vacation homes on the rise
Wall Street Journal
: Sales of second homes are showing an uptick even in more-affordable communities. In some locations, prices are even inching upward.
Northern Virginia leading region out of recession
Sun Gazette
: George Mason University economist Stephen Fuller described the region's economic recovery during a presentation at the Northern Virginia Association of Realtors' office.
House votes to kill Obama mortgage plan
CNN Money
: The House voted 252 to 170 to stop any new funding for the Home Affordable Modification Program (HAMP). Eleven Democrats joined Republicans to defund the program.
South Florida buyers come out for real estate bargains
Miami Herald
: The real estate industry is opening the doors of thousands of Florida homes this weekend in an attempt to convince consumers that now is the time to buy.

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New military programs offered by Bank of America

Bank of America intends to create a new program to assist military homeowners, in light of the recent stories of military members being denied their rights under the Servicemembers' Civil Relief Act (SCRA), a spokesman said on Feb. 10, 2011. Recent articles in the Army Times and the Wall Street Journal, illustrate the new programs are finally coming to light.�

Effective April 1, 2011, the following new programs will go into effect:

1.�� �Reduced Interest Rates on Mortgages.� The SCRA requires interest rates on loans secured prior to a service member's active duty status be reduced to 6% upon application for SCRA protection.� Bank of America has announced they will reduce interest rates on mortgages entered into prior to active-duty service be reduced to 4%.

���� a.�� �Applies for the entire term of active-duty service and for 12 months upon release from active-duty service.� At the end of this period, the interest rate will then revert to the pre-SCRA protected rate, and

���� b.�� �Goes into effect for April 2011mortgage payments, and

���� c.�� �Applies only to mortgages which are owned by Bank of America.� If your mortgage is only serviced by Bank of America, the 4% reduced interest rate will not apply.� (For example, if your original loan is with a bank other than Bank of America, and then you were notified that your loan was sold to Bank of America, this means that Bank of America only services your loan and the original bank from whom you obtained the loan technically owns it.)

2.�� �New Customer Service Team for Military Members.� A special customer service team is being established to handle military loans, and can be contacted at 888-325-5357. �

3.�� �Reduced Principal Balances.� For military members about to leave active-duty service, and thereby lose their protection under SCRA, Bank of America will work to assist those members having difficulty making their mortgage payments with several options:�

��� a.�� �Forgiveness of a portion of the outstanding balance still owed, or

��� b.�� �A reduction in the outstanding principal balances to “as low as 100% of the current market value,” or

��� c.�� �Additional reduced interest rates, or

��� d.�� �Extended repayment periods. �

��� e.�� �However, this only applies to loans which are owned by Bank of America and will not apply to service members who must relocate as a result of PCS orders.

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Tax tips for military services members

It's that dreaded time of the year again � tax time! For those military service members, there are some distinct tax advantages for you that may result in a windfall:

  1. First-Time Homebuyer Credit.� For service members serving overseas for at least 90 days between January 1, 2009 through May 1, 2010, you are entitle to an extension of the $8,000 First-Time Homebuyer Credit, if you enter into a contract prior to April 1, 2011 and settle by June 30, 2011.� Even if you settle in 2011, you are entitled to claim the credit on your 2010 Federal tax returns.� For more information, see: Federal first-time homebuyer tax credit extended for military member

  2. Military Spouse Residency Relief Act.� Under the Act, military spouses who maintain their state residency in one state (for example, Florida), but move to another state due to PCS orders of their military spouse (for example, Virginia), can claim an exemption from having to pay state income tax in Virginia.� Some states like Virginia however, do require proof that the non-military spouse's domicile is in another state.� Therefore, it may be necessary to file an additional tax form in the non-domicile state.� Please seek legal and tax advice, if you have any questions.

  3. Combat Zone Tax Exclusion.� For any day that a service member serves in a designated combat zone, the member's entire month of pay is excluded from their gross income for tax purposes.� There is no limit to the exclusion for enlisted member or warrant officers.� For officers, however, the exclusion is limited to the highest rate of enlisted pay (currently capped at $7,714.80) plus hostile fire or imminent danger pay they may be entitled to receive.�

The current list of combat zones include, as of the date listed:

  • Arabian Peninsula Areas (the Persian Gulf, Red Sea, Gulf of Oman, Arabian Sea north of 10� North latitude and west of 68� East longitude, Gulf of Aden, Bahrain, Iraq, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates), as of January 17, 1991

  • Kosovo area (Federal Republic of Yugoslavia � Serbia and Montenegro, Albania, Adriatic Sea, Ionian Sea north of the 39th Parallel), as of March 24, 1999

  • Afghanistan, as of September 19, 2001

  • Bosnia and Herzegovina, Croatia and Macedonia, as of November 21, 1995

In Support of Operation Enduring Freedom (Afghanistan):

  • Pakistan, Tajikistan and Jordan, as of September 19, 2001

  • Incirlik Air Base (Turkey), as of September 21, 2001 through December 31, 2005

  • Kyrgyzstan and Uzbekistan, as of October 1, 2001

  • Philippines (only service members with orders referencing Operation Enduring Freedom), as of January 9, 2002

  • Yemen, as of April 10, 2002

  • Djibouti, as of July 1, 2002

  • Israel, as of January 1 through July 31, 2003

  • Somalia, as of January 1, 2004

In Support of Operation Iraqi Freedom:

  • Turkey, as of January 1, 2003 through December 31, 2005

  • The Mediterranean Sea east of 30� East longitude, as of March 19 through July 31, 2003

  • Jordan, as of March 19, 2003

  • Egypt, as of March 19 through April 20, 2003

Filing Deadline. The national tax filing date has been moved from April 15, 2011 to April 18, 2011 due to the observance of Emancipation Day.� Also note if you are a military service member, you may qualify for an additional 180-day filing and payment extension upon return from a combat zone, hazardous duty area or from other overseas deployments.

Free Tax-Preparation Services. Most service members can visit almost any installation around the world for free, in-person tax preparation services through the Volunteer Income Tax Assistance program, offered by the Armed Forces Tax Council. The Department of Defense is also providing free online federal tax filing through H&R Block and Military OneSource. You can access the site at http://www.militaryonesource.com and then click on “Tax Filing Services.”

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6 real estate headlines: 30-Mar

A daily dose of headlines for real estate agents, mortgage lenders, homebuyers and home sellers.

Real estate: It's time to buy again
Forbes
: Data from research firm Metrostudy, which tracks new-home inventories for 65% of the U.S. market, show that the plummeting construction rate over the past few years has reversed a glut in supply.
Home prices fall in 19 major U.S. cities
Washington Post
: Home prices in the nation's capital are up 3.6 percent year over year and have risen nearly 11 percent since they bottomed out in March 2009.
New options for underwater home owners
CNBC
: After banks' initial resistance to loan modification programs and refinancing designed to help struggling borrowers, many are now embracing programs for homeowners in trouble.
Administration proposes banks spend $20B to fix botched foreclosures
Washington Times
: If the plan succeeds, the president would attain a key goal without having to spend further federal dollars on the program.
Housing slump still here: Case Schiller
Wall Street Journal
: Heads of big banks have questioned the fairness of writing down loans, while claiming the costs could be enormous if widespread principal reductions are triggered by a settlement.
Broker's book of Beatles business trips
Inman News
: A Nashville real estate broker writes “Come Together: The Business Wisdom of the Beatles,” using anecdotes from the musicians' careers as springboards for lessons to aspiring business people.

http://twlv.net/8OxT85

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6 real estate headlines: 29-Mar

A daily dose of headlines for real estate agents, mortgage lenders, homebuyers and home sellers.

Washington area housing market springs back
Washington Examiner
: The Washington region's housing market is springing back, and experts have just one piece of advice for those expecting to find a steal in the next several months.
Mortgage reform storm is brewing
CNBC
: When it rains, it pours, but we're looking at a hail storm in housing finance this week, as government starts the business of taking itself out of the housing business.
Lenders 'cautious' about cash-out refinance
Washington Post
: Given the amount of fraud in the mortgage industry, lenders are more cautious than ever about doing a “cash out” refinance, where they give homeowners cash when they refinance their mortgage.
Jack Nicklaus will have a house in VA development
DC Urban Turf
: The golf legend will have a house at Nicklaus Village, a 25-home development that will be part of Creighton Farms, a golf community in Aldie, VA about an hour's drive from DC.
Mortgage servicers resist but cut debts
Wall Street Journal
: Heads of big banks have questioned the fairness of writing down loans, while claiming the costs could be enormous if widespread principal reductions are triggered by a settlement.
Little success for loan reduction effort
Wall Street Journal
: Government efforts to encourage mortgage companies to reduce loan balances voluntarily for more borrowers haven't had much success so far.

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Investing in Florida real estate

People have successfully built fortunes through real estate investment for decades. In the current housing crisis, many more people are finding success by snatching up the many foreclosures available. To reduce the risk of failure, beginning real estate investors and first-time homebuyers should research the many different aspects of property investing before getting started.

Here are a few basic things to consider first:

��� �Personal goals
��� �Level of responsibility
��� �Location
��� �Current market

All of these factors can be addressed in a business plan. Real estate investing is a business, and just like any other business, should include a “road map.”; Having a business plan or financial goal will help keep you on track, reduce frivolous investments, and help you reach your goals faster. Let's look at each aspect a little closer.

Personal goals

First of all, it's important to have specific goals. Do you want to set up a residual monthly income through rental properties, or would you rather buy and sell properties for a quick profit? Are you interested in commercial properties or residential? When outlining your goals, be as specific as possible.

Responsibility

Next, what level of responsibility are you looking for? If you're purchasing properties for resale, more renovations are usually needed. You'll also need to consider resources needed to� list the property and find a buyer. Rentals often require renovations as well as regular maintenance and the time consuming task of finding tenants. It's possible to hire others to do the property management side of things, but that will add more costs.

Location

The location of a property is important; not only what area of the country, but also what part of the city or town, and even what section of a street the property is on. The location affects the value as much as the appearance of the home.

Assess the market

The final consideration new investors and homebuyers must make involvesthe current market. For example, in Florida, because so many people are currently losing their homes to foreclosure, it's more of a rental market than a selling market. Either way, it's important to look at the values of other properties in the area. This involves looking at what houses in the area have recently sold for and what price rentals are bringing in.

Don't get discouraged; investing in real estate really is a great way to build wealth. It's just important to learn everything you can before diving in. There are many investment brokers that deal strictly with property investments. Contact one in your area, or the area you wish to invest in, and ask them for advice.


About the author: Jennifer Hill and the agents at Realnet of Tampa Bay are experts at finding the best investment property for sale. Setting your goals and knowing how to get there are vital to your success! Realnet can help you determine the best investment properties to help you meet those goals. http://twlv.net/qeGugJ

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