Need a mortgage? You need a home appraisal

While the New York Times article mentioned here is written with New York City it mind, this column about the home appraisal process is applicable to New Jersey homes, too.

BEFORE anyone can buy a house with a loan from a bank or refinance a mortgage, the lender needs an objective assessment of the property’s value — after all, the home is the bank’s collateral for the loan. Assessing the value is the job of the appraiser.

No mortgage is made without an appraisal.  In my experience the way an appraisal is made has run the gamut from a "drive-by" where the appraiser takes photos from outside the home and gets her information about similar homes (called "comparables" or "comps") from sales reports to the true appraisal where the appraiser physically inspects the home to count and measure rooms, gets a copy of the survey, interviews the homeowner, visits the municipal building department to determine if all improvements have been reported to the municipality and performs a thorough comparison between the subject property and its comparables.

The best thing a homeowner or broker can do to help the appraisal process is to prepare a one-page sheet for the appraiser that outlines the changes and repairs that the home has undergone since it was bought.

Read the full column.

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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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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Need a mortgage modification, you'll have to start with a hardship letter

Getting a lender to modify your mortgage is not a Sunday walk in the park. Like many things in life, thought is required. As this column in the New York Times points out, getting started on the right foot is essential. Especially when it comes to explaining why you need the modification.

HOMEOWNERS having trouble paying their mortgages may try to elicit sympathy from their lenders in long, emotional letters laden with woe.

While lenders do not have a heart, they

[D]o look for what is known as a hardship letter when a borrower applies for a loan modification. Such a letter is a requirement for modification applications under the government’s Making Home Affordable program.

Tips on writing a good letter:  explain up-front, in simple language, why you missed payments and how you propose to correct the situation.  Get to it first, because

The lenders’ loss mitigators, faced with mountains of modification requests, are unlikely to spend time reading more than the first few lines of each letter.

Lot's of good information in it, so read the full column. And good luck to you.

For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us. We can help. We are the title insurance agent that does it all for you.

If you would like to know what we can do for you 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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Using gifts for real estate purchase downpayment

The New York Times discusses the impact on your loan application when you receive a gift towards your cash needs for closing.

HOME buyers trying to scrape together enough money to cover the typical 20 percent down payment frequently look to relatives for help.

The number of first-time homebuyers who resort to the Bank of Mom and Dad is about 25%.  No surprise here as prices in the metro-New York area are high and first time home buyers are young couples who are, literally, just starting out.

There are some pitfalls to avoid when you receive a gift.

But mortgage lenders closely scrutinize cash gifts. That critical check from the parents may not count toward your home purchase if you can’t thoroughly document its source and intention.

Be certain that the money is transferred by check or wire as the paper trail is essential and must be able to be followed by the loan processor.  If possible, get the money into the buyer's account several months before the closing.  It might result in less questioning by the bank.  Also, donors should check on their gift tax liability.

Nothing is simple, is it?

Read the full article here.

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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Foreclosure prevention seminars - do they work?

An article making its way around the Internet through MCT News Service poses this question on Sun-Sentinel.com-

I saw a notice for a foreclosure prevention workshop sponsored by my lender. Do these really help or is it just public relations for the bank? — Anonymous

I guess the answer is "yes and no."

Whether it's calling your bank's 800 number, working with an attorney or going to a workshop, you will get out of it what you put into it. Be completely prepared. Make sure you have two years of tax returns, six months of bank statements, a copy of your budget and bills, pay stubs and any other paperwork that might be relevant.

The point to remember is that you have to start somewhere, and a workshop may be just the right place to do it.

Read the full story here.

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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