Big win for homeowners thanks to housing lobby

Bloomberg.com reports "Housing Lobby’s Win Costing U.S. $600 Billion: Mortgages

Congressional efforts to reduce the U.S. deficit revived tax breaks for mortgage insurance and extended interest deductions for homeowners that will cost the government $600 billion over five years.

Among the provisions of the fiscal bill passed on January 1:

•  2007 tax break for homeowners whose debt is forgiven by lenders and preserved exemptions for profits on home sales, while maintaining mortgage-interest deductions

The moves could help a housing market that last year started to reverse a five-year slump that pushed the U.S. economy into the longest recession since the 1930s.

•  2013 Savings Homeowners will save about $100 billion this year from mortgage interest deductions  
• Borrowers with mortgage insurance, from private guarantors or the U.S. government, will be able to deduct their premiums. That perquisite had expired at the end of 2011. The change will apply retroactively to 2012 for homeowners making less than $110,000 a year and will remain in force this year. 

The bill also extended the ability for homeowners to avoid taxes when their debt is written off by lenders in so-called short sales, in which properties are sold for less than loan amounts, and in loan modifications meant to keep borrowers in houses. The forgiven amounts were treated as income before 2007 until the Mortgage Debt Relief Act was passed. That had been set to expire this week before the extension.

But beware.  Higher income hearings face a limit on deductions .

This week’s bill will also limit some mortgage-related deductions by reviving so-called Pease limitations for itemized filers including individuals earning more than $250,000 and couples with more than $300,000 in adjusted gross income. Taxpayers will gradually lose the value of deductions, reducing them to as little as 20 percent of what they had been, according to the NAR summary.

 Read the full story.

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow AT vested.com

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Wells Fargo in court over reverse mortgages

Bloomberg news reports, "Wells Fargo Sued Over Reverse Mortgage Policies by Borrowers"

“Wells Fargo & Co. was accused in a group lawsuit of ignoring federal rules on reverse mortgages and forcing homes into foreclosure instead of giving heirs a chance to buy them.

“Estates and surviving spouses have the right to purchase properties at 95 percent of appraised value after the death of a borrower who took out a federally insured reverse mortgage, lawyers for a California man said in the complaint filed Aug. 3 in federal court in San Francisco.

“Wells Fargo hasn't been notifying heirs of this right and has been starting foreclosures if demands aren't met for repayment of the full mortgage balance, according to the complaint filed by the son of a California homeowner. The plaintiff, Robert Chandler, also sued the Federal National Mortgage Association, or Fannie Mae.”

Wells Fargo alleges that it complied with HUD guidelines; guidelines that only came into effect in April 2011.

Read the full story.

For your next title order or if you have questions about what you see here, contact
Stephen M. Flatow, Esq.,

Vested Title Inc.
165 Passaic Avenue, Suite 101
Fairfield, NJ 07004
Tel 973-808-6130 - Fax 201-656-4506
E-mail vti@vested.com - www.vested.com

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JUMBO Mortgage Rates Don't Shrink

Bloomberg News reports-

Jumbo mortgage shoppers in the most expensive U.S. housing markets such as New York and San Francisco aren't getting much relief from lower borrowing costs. The average 30-year fixed-rate for home loans of more than $729,750 remains almost 2 percentage points above conforming rates and the spread between them may set a record this month, according to financial data firm BanxQuote.

Why?

Banks remain reluctant to lend. “The collapse of the private mortgage securities
market means lenders find there's little demand for jumbo loans they want to
sell.”

Good News

“If low conventional rates entice enough homeowners to refinance, jumbo home loans may become more affordable as loan payoffs add liquidity to the
banking system.”

“The average 30-year fixed jumbo loan rate was 7.32 percent on Dec. 22, compared with 5.38 percent for a conforming loan, according to BanxQuote of White Plains, New York. The difference between the two averaged 2.13 percentage points in December, 10 times the spread from 2000 to 2006 and above last month's 1.95 percentage points that was the highest on record. If current rates reflected the historical difference of 0.2 percentage points, jumbo borrowers with an $800,000 mortgage would save $913 a month.”

More Good News?

Buyers in markets that rely on jumbo loans, such as New York, San Francisco and Boston, may see rates fall in 2009 because of Federal Reserve chairman Ben Bernanke's plan to buy at least $500 billion of securities issued by Fannie Mae and Freddie Mac.

Here's the report from Bloomberg News

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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