Register Real Estate Advisors

Here is some great information about short sales and the Mortgage Forgiveness Debt Relief Act written by Bryan Ellis.

Short sales are becoming more and more common, but that could change if the tax break that currently does not force homeowners who do short sales to claim the forgiven debt on their tax returns is not extended. At the end of this year, the Mortgage Debt Relief Act, also called the Mortgage Forgiveness Debt Relief Act, will expire if changes are not made to the legislation. When this happens, the amount a short sale falls short of the amount owed on a property will, once again, be viewed as income to the former homeowner and will likely make short sales far less attractive to nearly every distressed property owner.

Additional fallout could take the form of more strategic defaults once short sales are no longer an option, warn analysts. If homeowners stand to lose money in the form of additional taxes on the “forgiven” debts on their homes, they may simply opt to walk away from the property all together and hope that the lender ultimately recoups the bulk of the debt when the property is auctioned off or otherwise sold. Of course, in the case of strategic defaults – or other forms of foreclosure as well – lenders can pursue the delinquent borrowers for the difference between the amount that they owed on the property when they stopped paying and the amount the lender was able to make when the property was sold.

These debts are often difficult to collect, but some lenders opt to wait years before pursuing them in order to allow former homeowners to get back on their feet. Others sell the debts to third-party collections companies. Even if this part of the debt is ultimately written off, it can create tax problems years down the road for homeowners because when the debt is written off it may be considered income to the homeowner.

For the most part, real estate professionals are hoping that the Mortgage Debt Relief Act will be extended before it expires on December 31 of this year. If not, “it will be a shock to many taxpayers after 2012,” warns Mark Steber, a tax officer for Jackson Hewitt Tax Service. If the legislation is not extended, more homeowners may opt to declare bankruptcy in order to avoid paying income taxes on their “forgiven” debts.

Do you think that the Mortgage Debt Relief Act should be extended through 2013? Article Compliments of: Bryan Ellis

HOUSTON (Houston Chronicle) – Real estate experts are optimistic about the Houston market’s prospects in 2012. Several recently shared their forecasts with Nancy Sarnoff of the Houston Chronicle.   Here’s what they had to say.

Housing
Houston is going to see somewhere around a 5 percent increase in home sales and maybe as much 2 or 2.5 percent increase in median price, according to Real Estate Center Research Economist Dr. Jim Gaines. He said that’s still lower than the historical norm, but those are better numbers than the last two or three years.

Housing Permits
Bohlke Consulting Group Vice President Gary Latz predicts that the annual 2011 number will be 21,500 permits. This momentum will carry forward into 2012 due to strong job growth and low interest rates. The firm projects a minimum of 5 percent growth in new-home permits for calendar year 2012 over calendar year 2011. This translates to nearly 22,600 permits.

Foreclosures
Both foreclosure postings and actual foreclosures in Harris County declined year-over-year from 2011 compared with 2010. Amanda LeCureux, managing partner with Foreclosure Information & Listing Service, expects these declines to modestly accelerate in 2012.

Apartments
Apartment Data Services President Bruce McClenny said available high-end units are scarce, and it will take up to 18 months before any significant number of new units become available. He said to expect around 9,000 units to be delivered in 2012 and approximately 10,000 units in 2013.

Office Space
Transwestern Executive Vice President J. David Baker expects continued strong job growth to generate four to six million sf of positive absorption. He said the only thing that might hold it to the low end is energy and energy engineering companies not finding enough qualified people.

Retail
Wulfe & Co. President Ed Wulfe expects to see at least a 25 percent increase, or approximately 1.5 million square feet, in new retail construction in 2012. This will exceed the total amounts built and opened in each of the previous two years. Active growth within Loop 610, particularly of supermarkets, will prevail.

Bank of America is making a process change that will reduce cycle time.  Effective Dec. 1, 2011, Bank of America is reducing the cycle time to process all short sales submitted with an offer in which the homeowner is eligible for the Home Affordable Foreclosure Alternative (HAFA) program.

When a short sale is submitted with an offer and the homeowner is HAFA eligible, we will no longer halt work on the file while waiting to contact the homeowner. HAFA eligible homeowners are no longer required to call our Short Sale Customer Care to indicate whether they will participate in the program.

Instead, real estate agents can indicate a homeowner’s HAFA interest by submitting the necessary documents to Equator within 14 days. During that 14-day window, the short sale will continue moving forward. By the end of the 14 days, if we have not received the requested HAFA documents, we will continue to process the file as a traditional short sale.

This change is being made because we are transitioning the processing of all HAFA short sales with an offer from our outsourced vendor partners to Bank of America associates. A Bank of America specialist will be able to seamlessly transition a file from our traditional process to the HAFA process, thus improving customer service and the agent experience. Our outsourced vendor partners will, however, continue to process all short sales submitted without an offer.

COLLEGE STATION (Real Estate Center) – Foreclosure activity in Texas was down last month, according to the latest figures from RealtyTrac.  November foreclosure filings for the Lone Star State totaled 10,124, down 24.3 percent from a year ago. Total year-to-date (YTD) filings were at 115,222, down 18.9 percent.  Nationally, there were 224,394 filings, down 14.5 percent from November 2010. Total YTD filings were at 2.5 million, down 30.1 percent.  There were 6,247 posted foreclosure sales in Texas last month, down 19.1 percent from a year ago. YTD postings were down 17.3 percent, at 69,473.  Meanwhile, there were 96,540 posted foreclosure sales nationally last month, down 38.3 percent from last year. YTD postings were at 994,887, down 33.2 percent.  Real Estate Center Research Economist Dr. Jim Gaines said the impact of foreclosure moratoria from the pending agreement with states’ Attorneys General slowed foreclosures for all of 2011. But that will likely mean more foreclosure activity going into the new year.  “The pent-up foreclosure processing is expected to bust loose in 2012, so we expect to see significant percentage increases in the monthly reports for at least the first half of 2012, if not the whole year,” he said.  But that’s nationally. Gaines said Texas should fare better.  “Posted delinquencies here are falling, and Texas is a non-judicial foreclosure state, so many lenders haven’t stopped processing foreclosures, thereby preventing a backlog from forming,” he said.

At the end of 2009, 10% of mortgages had at least 1-payment past due and another 5% of mortgages were in the foreclosure process.  At the end of the 3rd quarter of 2011 8% of mortgages had at least 1-payment past due and another 4% of mortgages were in the foreclosure process.  Currently, there are fewer homes being foreclosed on.  Many families are concerned about inflation in the US.  It has caused prices to rise throughout the country by about 64% over the last 20 years.  That’s an annual increase of 2.5%. An example that looks grim is that a person who retired December of 1990 on a fixed income with no cost of living adjustments would have 61% of their purchasing power as of December of 2010.  That surprising example keeps consumers teetering between purchasing homes and staying in their current homes.  The good news for Houston is that our current housing inventory has reduced, interest rates are low, and we have the most stable housing market in the country.  Consumers buying homes in Houston, Texas have a lot more buying power than home buyers in other areas of the country.

Did you buy your home in the years 2007 thru 2009? If your home is worth less than what you paid, you might be interested in finding out. There were a lot of subdivisions built during that time. The housing market was booming, the builders could not build homes fast enough. A the time, mortgage lenders were giving money away with “no doc” loans and very “flexible” appraisals.

Well the housing market has changed. You may have purchased your home at $75 to $100 per square foot where the homes in the neighborhood are now selling for $50 to $75 per square foot. You might be interested to find out if you are eligible to sell your home in a short sale. This is where the bank agrees to take less for your home than what you owe. The US government also has programs available to help home owners that qualify.

Please contact me at your convenience to see if you qualify for this type of sale. You should at least investigate your eligibility, instead of paying high mortgage payments on a home that you are upside down on.

I can be reached at 281-924-3032, or by email at dean@rrea.com

Houston Association of Realtors reports that the share of sales that were foreclosures for the period ending September 2011 was 19.9%. Don’t let friends get foreclosed on. For more information on how to prevent foreclosure visit http://rrea.us/ss

DALLAS (Dallas Morning News) – A recent study by the Dallas Morning News suggests that DFW’s housing market woes may have
hit bottom.

According to the study, home foreclosures in the first half of this year were down more than 10 percent from the same period last
year, and more than 25 percent from the same period in 2008.

Lenders foreclosed on more than 7,800 DFW homes during the first half of this year, reports Addison-based Foreclosure Listing Service. The
total value of those properties was almost $779 million.

Foreclosure rates are highest in places such as Celina, Anna, Princeton, Lavon, Little Elm, Lancaster, Glenn Heights, Forest Hill, Blue Mound and Fate.

D’Ann Petersen with the Federal Research Bank of Dallas said foreclosures bear watching and may remain elevated until there’s sustained improvement in
the housing market.

“The housing market is still wobbly, but it does appear to have reached a bottom,” she said.

HOUSTON (MakingHomeAffordable.gov) – Homeowners needing mortgage assistance might find it at a special event
on Friday, Nov. 4, in Houston.

The Help for Homeowners Community Event is an opportunity for homeowners to meet with mortgage lenders or a HUD-approved housing counselor to find out
whether they qualify for the federal Making Home Affordable program or other options.

The free workshop will be from 11 a.m. to 7:30 p.m. at the Hilton Americas–Houston at 1600 Lamar St.

Homeowners must bring:

• a monthly mortgage statement,
• information about any other mortgages on the home,
• two most recent pay stubs for household members contributing to mortgage payment,
• tax returns for last two years,
• most recent quarterly or year-to-date profit and loss statement (if
  self-employed),
• documentation of other income,
• two most recent bank statements,
• utility bill showing homeowner name and property address, and
• unemployment insurance letter, if applicable.

For more information, call the Homeowner’s HOPE Hotline at 888-995-HOPE (4673) or visit MakingHomeAffordable.gov
or HopeNow.com.

The event is sponsored by NeighborWorks America, the U.S. Department of the Treasury and the U.S. Department of Housing and Urban Development.

Kevin Price, host of Price of Business, and I discuss the relatively new phenomena of banks walking away from foreclosures and what this means to the homeowner. This aired on AM 1070 in Houston on Thursday.