Tax Credit Creates "First Time Fraudsters" - WSJ

When it comes to greed, the real estate market appears to be the breeding ground for schemes. The so-called sub-prime mortgage debacle leads to the recession. To help pick-up the real estate market, the government (read "we taxpayers") provide an incentive in the form of a tax credit for first time homebuyers.

Just as the mortgage schemers found the weaknesses in the mortgage financing system, so too have others found weaknesses in the tax credit.

The WSJ writes,

It's hard not to laugh when viewing the results of the federal first-time home-buyer tax credit. The credit, worth up to $8,000 for the purchase of a home, has only been available since April of last year. Yet news of the latest taxpayer-funded mortgage scam has traveled fast. The Treasury's inspector general for tax administration, J. Russell George, recently told Congress that at least 19,000 filers hadn't purchased a home when they claimed the credit. For another 74,000 filers, claiming a total of $500 million in credits, evidence suggests that they weren't first-time buyers.

As a "refundable" tax credit, it guarantees the claimants will get cash back even if they paid no taxes. A lack of documentation requirements also makes this program a slow pitch in the middle of the strike zone for scammers. The Internal Revenue Service and the Justice Department are pursuing more than 100 criminal investi-gations related to the credit, and the IRS is reportedly trying to audit almost every-one who claims it this year.

And so it goes in America. Read the full column, First Time Fraudsters.

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or if you have questions about what you see here,

contact Stephen M. Flatow
Vested Title Inc.
648 Newark Avenue, P.O. Box 6453, Jersey City, NJ 07306
Tel 201-656-9220 - Fax 201-656-4506
E-mail vti@vested.com - www.vested.com

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Thinking of Buying an REO Property? Be careful out there.

We are guaranteed to get at least two calls a month asking us about REO properties. These are properties that are still in foreclosure or have been acquired by a bank following foreclosure.

The common theme of these inquiries is this- "I have seen this property and am interested in buying it. I know it's in foreclosure or it just came out of foreclosure. I think it's a good deal for an investment, what should I do?"

When a property is still in foreclosure and there is no chance of negotiating a contract with the owner and a short sale with the lender, we often recommend that the hopeful investor under-stand the market values in the neighborhood before committing to bid. We tell them to not spend a lot of money in searching the title at that point, but to get an idea of the upset price by calling the tax collector and the attorney for the foreclosing lender for amounts owed to them.

Once they bid successfully, we are in a position to search the title thoroughly in order to insure the buyer's title. But this is only one side of the equation when making the plunge into investing in REO.

Realty Times has a timely article written by Kenneth R. Harney that discusses the pitfalls faced by many investors. Harney assessed the situation as follows:

Foreclosures and bank REOs are pulling a new wave of novice investors into the market, some of whom "are just plain clueless, to put it bluntly," says Robert Cain, a long-time rental market and real estate management specialist based near Tucson, Arizona.

"They see the price and they way, wow! I can buy that house and turn it into a rental," says Cain, who lectures around the country and online about investing intelligently.

"But they don't understand the local market, they don't understand landlording, and don't even necessarily visit the property," Cain said in an interview last week with Realty Times.

So, before you leap into the sea of foreclosed and REO properties, read the full Realty Times article, Investor Report: Investment Buying Tips.

For your next title order
or if you have questions about what you see here,

contact Stephen M. Flatow
Vested Title Inc.
648 Newark Avenue, P.O. Box 6453, Jersey City, NJ 07306
Tel 201-656-9220 - Fax 201-656-4506
E-mail vti@vested.com - www.vested.com

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First-Time Home Buyer Tax Credit - Get yours while you can

From RealtyTimes.Com:

Home Buyer Tax Credit Ends Sooner Than You Might Think
by Broderick Perkins

You have less time than you think to cash in on the federal home buyer tax credit.

Unless legislation extends the deal, you'll have to close escrow by Nov. 30 to take advantage of the maximum $8,000 tax credit available for first time home buyers.

The federal tax credit for 2009 is only for first-time home buyers -- people who've had no ownership interest in a home in the three years prior to the purchase. Single and head of household tax payers can earn no more than $75,000. There's a $150,000 ceiling for married couples filing a joint return.

A tax credit is a big deal because, unlike a tax deduction which reduces your taxable income, a tax credit reduces the taxes you owe, dollar-for-dollar.

This home buyer tax credit can also net you a rebate if the credit is more than the taxes you owe. The rebate is the difference. If you owe no taxes, your rebate can be a maximum $8,000.

The Internal Revenue Service has posted Questions and Answers

Apply for your Home Buyer Credit by using IRS Form 5405

For your next title order
or if you have questions about what you see here, contact

Stephen M. Flatow
Vested Title Inc.
648 Newark Avenue, P.O. Box 6453, Jersey City, NJ 07306
Tel 201-656-9220 - Fax 201-656-4506
E-mail vti@vested.com - www.vested.com

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From Bankrate.com - 3 truths about debt settlement

Writing on Bankrate.com, Steve Bucci answers this question:

"I take home $9,000 per month, but pay $2,500 to my credit cards. I can't continue to pay my credit card bills. I am thinking I might stop paying and try to settle. Will it hurt me that I have gainful employment?"

He says,

"Of course you can pay your credit card bills. You just have to dedicate about $3,000 of your $9,000 of income to debt repayment instead of what you are currently spending it on. With a salary and credit card debt in excess of $100,000, the problem is clearly that your spending is out of control. Whatever the reason for this may be, where there is income, there is hope!"

But, he cautions,

"I don't like to be negative, but I can't imagine a creditor settling your account for less than you owe if you have a source of income that can be garnished and, most likely, assets that can be attached. To be fair, there are a lot of misleading ads running right now that have people erroneously thinking they can just settle debts and walk away scot-free. Some debt settlement companies even say that you have a right to settle debts for less than you owe, like it's a new government entitlement you just need to apply for."

Bucci believes that debt settlement is a bad idea for several reasons. To read what they are, we recommend you read "3 Truths About Debt Settlement"

For your next title order
or if you have questions about what you see here,
contact Stephen M. Flatow
Vested Title Inc.
648 Newark Avenue, P.O. Box 6453, Jersey City, NJ 07306
Tel 201-656-9220 - Fax 201-656-4506
E-mail vti@vested.com - www.vested.com

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