How’s the real estate ‘recovery’? California still leads in “underwater” mortgages.

Almost half the mortgages in California are “under water” still, according to an analysis Negative Equity Report. Short sales are the “new normal”. No one wants to sell at take a loss, but if you must, be certain you are represented by a Short Sale and Foreclosure Resource as certified by the National Association of Realtors. Those are the only agents with the training, knowledge, and hands-on expertise to help navigate the tricky and sometimes treacherous waters of a short sale.

Image

 

If you are “under water” and need to sell your home, call Theresa Grant at (909) 336-7933 or email Theresa@HomesInLakeArrowhead.com . The entire team at The Grant Group is a certified SFR, and we know our business inside and out.

ImageTheresa Grant is a certified Short Sale & Foreclosure Resource Realtor affiliated with Coldwell Banker Sky Ridge Realty. She serves the mountain from peak to peak – Crestline to Lake Arrowhead to Running Springs to Green Valley Lake.

 

FHA -lowers- loan limits for 2014

If you have been looking at homes but haven’t been able to get under contract yet…

If you need to put less than 5% down…

If your credit score doesn’t qualify for conventional financing so FHA is your only option…

You need to get under contract before December 31, 2013.

Why?

FHA announced lower loan limits for 2014, effective Jan. 1.   

New single-family limits:

  •  San Diego County (2014: $546,250—was $697,500)
  • LA & Orange County (2014: $625,500—was $729,750)
  • Riverside County (2014: $355,350—was $500,000)
  • San Bernardino County (2014: $355,350—was $500,000)

That’s a tightening of your buying power that can limit you in the type of home you can actually afford. As the market inventory shrinks, prices go up. In the mountain area over the past 90 days we’ve seen a 54% inventory drop on average from peak to peak, with the difference between list price and sales price to be on average 2.7%. (Data source: Rim o’ the World MLS). We’re looking at multiple offers, higher competition, a shift towards a seller’s market, and your ability to have a wider range of price is becoming severely limited in three weeks.

If you need an aggressive hands-on Realtor to help you find a mountain home, call Theresa Grant today at (909) 336-7933 or email Theresa@HomesInLakeArrowhead.com . My entire team is custom-showing property to help beat back this FHA loan limit change. We will do our best to find you a home and get you under contract fast!

Lake Arrowhead real estate – heating up, still bargains to be had!

The 90-day market value snapshot for Lake Arrowhead shows a decrease in inventory, with the gap closing from list price to sales price to only 4%. We’re heading into a seller’s market – now is the perfect time to buy before the scales tip out of balance!

Image

To take a look at Lake Arrowhead homes for sale, or see what has sold in the past 90 days, click the image above.

 

The FHA in 2014: California home-buying power!

Just this morning, the Federal Housing Finance Agency (FHFA) announced it will keep the 2014 maximum conforming loan limits for mortgages acquired by Fannie Mae and Freddie Mac at $417,000 on one-unit properties in most areas and a cap of $625,500 in high-cost areas:

I applaud the FHFA for keeping with the law and retaining the existing Fannie Mae and Freddie Mac conforming loan limits.  The FHFA recognizes that home prices have rebounded in California, especially in the high-cost areas, where lowering the loan limits would have reversed the housing recovery.  Retaining the higher loan limits is critical to providing liquidity in today’s housing market and is essential to a full housing recovery.

Earlier this year, the FHFA announced its intention of lowering the loan limits.  Since then, C.A.R. and the NATIONAL ASSOCIATION OF REALTORS® (NAR) aggressively fought to prevent a reduction in the loan limits.  C.A.R. and NAR both have long advocated for making higher conforming loan limits permanent, and as a result of our combined efforts, Congress made permanent the maximum conforming loan limits at $625,500.

Without the extension of the higher loan limits, many California borrowers would have a harder time obtaining financing for new home purchases and refinancing homes. 

Can you be held liable for more taxes if you short sell your house?

It’s the political push and pull that we’ve been dealing with for years across America, the threat that hangs over a homeowner’s head: If you sell your house for less than what is owed on it, is the forgiven debt ‘income’ that you can be taxed on? The Feds had this nebulous double-punishment for a homeowner that has already suffered some kind of loss — job loss, death of an income-producing spouse, debilitating illness, divorce — combined with the loss of the family home, and then to put the cherry on the sundae, be taxed for it.  This was addressed with the Mortgage Relief Act of 2013 on the Federal Level, but with the expiration of that Act at the end of this year, the tax liability at the State level conflicts with that at the Federal level. California exempts its residents from taxation in a short sale, but with the expiration of the Act on December 31, 2013, where does that leave Californians who have to short-sell their home, for any reason, when it comes to Federal taxation?

The Feds have finally made a ruling and it’s good news.

No Federal Debt Relief Income Tax on Short Sales

The California Association of REALTORS (C.A.R.)  has been working with California Sen. Barbara Boxer to protect distressed homeowners from debt relief income tax associated with a short sale in California.  As part of this effort, Sen. Boxer requested the Internal Revenue Service (IRS) to provide guidance on whether mortgage debt forgiveness in a lender-approved short sale would be taxable income under federal law, given California’s recent non-recourse laws for short sales, which were hard fought victories by C.A.R.

The IRS has clarified in a letter that California’s troubled homeowners who sell their homes in a short sale are not subject to federal income tax liability on “phantom income” they never received.  The IRS recognizes that the debt written off in a short sale does not constitute recourse debt under California law, and thus does not create so-called “cancellation of debt” income to the underwater home seller for federal income tax purposes.  This clarification rescues tens of thousands of distressed home sellers from personal liability upon expiration of the Mortgage Forgiveness Debt Relief Act of 2007 on Dec. 31, 2013.

C.A.R. is seeking a similar ruling from the California Franchise Tax Board (FTB), which has been awaiting the IRS action; C.A.R. anticipates the FTB will act promptly.  Short sales may raise other tax issues and, as always, consumers should speak with their tax professional regarding the tax consequences of a short sale.
ImageTheresa Grant is a Short Sale and Foreclosure Resource specialist certified by the National Association of Realtors. She can be reached at (909) 336-7933 or via email at Theresa@HomesInLakeArrowhead.com.