While this is from the CA Board of Realtors, it has nationwide implications. The article links to the revised IRS docs.
This legal article discusses the income tax consequences to the borrower in the event of a foreclosure on the borrower’s property, in the event the borrower transfers title to the lender as part of an agreement with the lender deed-in-lieu of foreclosure, and if the borrower sells the property to another in a short sale in which a lender accepts less than the balance due on the loan as payment in full.
Are things really getting better? RealtyTrac recently released it’s Foreclosure Market Report for January of 2014. Unfortunately, foreclosure filings increased 8 percent since December 2013 nationwide.
via Naheed Amdani, Attorney.
Another recently expired provision could cause comparable damage to the same population, but it has yet to trigger similarly urgent attention from lawmakers. The end of the Mortgage Forgiveness Debt Relief Act, which lapsed December 31, means that any type of debt forgiveness on a mortgage will result in a giant tax bill—one that a stressed homeowner cannot usually afford. Even homeowners entitled to compensation for past abuse by the mortgage-lending industry would be subject to unfavorable tax treatment. This will lead to more economically debilitating foreclosures and weaken the housing market.
Wall Streets foreclosure crisis, which began in late 2007 and forced more than 10 million people from their homes, has created a paradoxical problem. Millions of evicted Americans need a safe place to live, even as millions of vacant, bank-owned houses are blighting neighborhoods and spurring a rise in crime. Lucky for us, Wall Street has devised a solution: Its going to rent these foreclosed houses back to us. In the process, its devised a new form of securitization that could cause this whole plan to blow up—again.
via Mother Jones.
A fantastic article that anyone concerned abot real estate and the housing markets should read. - Tim Ballering
From 2009-2012, the top 1% of Americans captured 95% of income gains. Now, as the housing market rebounds, billions of dollars in recovered housing wealth are flowing straight to Wall Street instead of to families and communities. Since spring 2012, just at the time when Blackstone began buying foreclosed homes in bulk, an estimated $88 billion of housing wealth accumulation has gone straight to banks or institutional investors as a result of their residential property holdings, according to an analysis by Tom Dispatch. And it’s a number that’s likely to just keep growing.
via naked capitalism.
FNC said rising home sales accompanied by a relatively low share of foreclosure re-sales are the key drivers of continued increases in home prices. As of September, foreclosure sales nationwide accounted for 13.4% of total home sales, up slightly from Augusts 12.7% but down from 16.6% a year ago.
When home prices were heading downward banks would sometimes send default notices to homeowners but allow them to stay in the home without making payments if the homeowner would maintain the home and keep it in good condition. Now that the economy is improving and home prices are rising, banks are willing to complete the foreclosure process if homeowners dont start making their payments again.”
All four measures of distress in the housing market dropped to post-crash lows during the third quarter of 2013 the Mortgage Bankers Association (MBA) said today. The national delinquency rate, serious delinquencies, loans in foreclosure, and foreclosure starts all registered significant declines during the quarter.