A New York Times article explains how A HIGH credit score won’t necessarily insulate borrowers from the home-foreclosure crisis.
A Las Vegas Business Press article discusses the growing trend of lenders coming after developers for their personal holdings
Read the full story here
On February 24, 2010,
in Finance, Real Estate,
by blacklobellolaw
James E. Herbe, Esq. mentioned in In Business “Banks limited in recovering losses” http://bit.ly/94sz6e Banks limited in recovering losses
On February 24, 2010,
in Real Estate, Short Sale,
by blacklobellolaw
In an effort to streamline their processing of a half-million short sales, Bank of America has announced that all short sales must now be processed through the Equator online transaction manager regardless of the file’s proximity to approval. Effective March 1, 2010, all properties secured by a Bank of America loan must be uploaded electronically. No existing short sale reviews will be grandfathered in. All files, regardless of the stage, will have to be resubmitted and assigned to a new negotiator.
Historically, Equator is a software platform which has been used to track matters related to depressed properties. Traditionally, asset managers and realtors use Equator to list and sell REO properties. Other vendors such as title companies and eviction attorneys use it to assist in relocating the occupants of REO properties.
Bank of America believes that Equator will “streamline” and expedite short sale negotiations by uploading the necessary documents to save time. However, the uploading process takes as much time, on average, as faxing. More importantly, it still takes several weeks for Bank of America to open the file and assign a negotiator.
What this will mean for many of our clients is that the entire short sale package must be resubmitted through the Equator system and the timeframes for processing will have to start over. Due to the particularity of the program, Black & LoBello may be forced to request additional or supplemental documentation from all parties involved in the transaction. Additionally, the short seller is now required to obtain login information before any financial data can be uploaded to the system. Once you have obtained your login information, please forward the login, temporary password, and security question to your processor so that we may make the proper submissions on your behalf.
Black & LoBello apologizes in advance for the inconveniences Bank of America’s decision will cause our clients.
Tisha Black Chernine, Esq.
On February 23, 2010,
in Real Estate, Taxes,
by blacklobellolaw
Claiming the First-Time Homebuyer Tax Credit on your 2009 tax return might mean a larger refund but it can seem complex. Here are five tips to clarify the documentation requirements:
Settlement Statement: Purchasers of conventional homes must attach a copy of the Form HUD-1 or other properly executed Settlement Statement;
Properly Executed Settlement Statement: Generally, a properly executed Settlement Statement shows all parties’ names and signatures, property address, sales price and date of purchase. However, settlement documents, including the Form HUD-1, can vary from one location to another and may not include the signatures of both the buyer and seller. In areas where signatures are not required on the settlement document, the IRS encourages buyers to sign the Settlement Statement when they file their tax return – even in cases where the settlement form does not include a signature line.
Retail Sales Contract: Purchasers of mobile homes who are unable to get a Settlement Statement must attach a copy of the executed retail sales contract showing all parties’ names and signatures, property address, purchase price and date of purchase.
Certificate of Occupancy: For a newly constructed home, where a Settlement Statement is not available, attach a copy of the Certificate of Occupancy showing the owner’s name, property address and date of the certificate.
Long-Time Residents: If you are a long-time resident claiming the credit, the IRS recommends that you also attach documentation covering the consecutive five-year period such as the Form 1098, Mortgage Interest Statement or substitute mortgage interest statements, property tax records or homeowner’s insurance records.
For more information about the First-Time Homebuyer Tax Credit and the documentation requirements, please contact your CPA or tax professional and visit IRS.gov/recovery.
Tisha Black Chernine, Esq.
On February 9, 2010,
in Estate Planning, Finance, Landlord & Tenant, Real Estate, Taxes,
by blacklobellolaw
As we enter the second year of widespread foreclosures and short sales in Clark County, we are just starting to figure out how the banks will behave. Many are unaware that they can take proactive steps to minimize both the possibility and effects of when lenders pursue a deficiency action.
As always, the best defense is a good offense. The best option available to those with assets is to engage in a preemptive strike: asset protection. Several strategies can be used to properly protect properties, investments, and savings.
First and foremost, take advantage of state and federal exemption laws. Homesteads in Nevada are protected up to $550,000 worth of equity in a primary residence with a proper homestead designation. Other exemptions can be applied to funds in ERISA qualified plans and some of the cash values held in life insurance policies. This means, if you are sued or have a judgment against you, assets or equity held in exempt resources cannot be collected.
Next, a proper structure using business entities can be used to remove assets from your personal name and place them in the name of the business. This offers two types of protection; shielding a business from claims of its owners’ creditors and an owner’s assets from the claims of business creditors. In certain circumstances, business owners may also see tax benefits from proper business formation.
Take, for example, Ann and Tom. Ann and Tom have a house worth $400,000 that they paid cash for, and own a sole proprietorship business with cash accounts of around $50,000. Ann manages their business while Tom works as a pharmacist. They each have $50,000 in their 401(K)s and have about $10,000 worth of cash value in whole life insurance. They have three children, all under the age of 18. Unfortunately, they also own a rental property worth about $200,000 less than what they paid. They both signed on the loan. Ann and Tom also have about $100,000 in savings in their joint savings account. They are up to date on all of their mortgage payments but are thinking of a possible strategic default on the underwater investment property.
What can Ann and Tom do to protect their assets (home, 401(K)s, cash value, business assets) from potential claims if they default on their investment property?
There are many possible solutions for every situation. Here are some possible recommendations for Ann and Tom:
- File a Declaration of Homestead for their primary residence. This quick, inexpensive method may protect all of the equity in their home and involves only a trip to the Recorder’s office and approximately $20.00 in recording fees.
- Take advantage of state and federal deductions.
- As long as their 401(K)s are ERISA qualified, all of the funds are protected from any judgment rendered against them.
- Additionally, Nevada offers protection to Ann and Tom’s life insurance benefits as long as the annual premiums on the policy do not exceed $15,000.
- They may want to take some of their savings and put it into 529 plans to save for their children’s education, which have various tax and asset protection advantages.
- Set up a proper business structure.
- A sole proprietorship offers little or no asset protection for the owners of the business or the business assets. A better strategy is to form a Nevada limited liability company. This provides protection of the business’s assets from Ann and Tom’s creditors. Also, if the business itself is sued, Ann and Tom’s assets may be protected as well.
- Tom may also want to form a separate company for his pharmacy practice since that particular profession has a high risk of being sued.
- Pursue negotiations with the bank.
- Ann and Tom might try to negotiate a loan modification with the bank or work out a short sale. However, if they do not engage in proper planning before submitting their financial statement to the lender, the outcome could be less than ideal.
- Again, proper structuring is important. A short sale has many advantages over a foreclosure and Ann and Tom should sit down with a qualified attorney before deciding which courses of action to take.
Tiffany N. Ballenger, Esq.
On February 8, 2010,
in Mortgage, Real Estate,
by blacklobellolaw
Mortgage lenders pursue homeowners even after foreclosure(http://finance.yahoo.com/news/Mortgage-lenders-pursue-cnnm-3107909798.html?x=0)
On February 2, 2010,
in Bankruptcy, Real Estate,
by blacklobellolaw
Reading: “Extra staff to fight foreclosures”( http://twitthis.com/mercsq )
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