Government and Bank Programs

Senate committee drafts proposal to wind down Federal mortgage institutions in five years.

Many people don’t understand Fannie Mae and Freddie Mac, and in some cases, they might even think they are the two people who run the FHA (They aren’t!).Fannie Mae Freddie Mac

Fannie Mae refers to the Federal National Mortgage Association, while Freddie Mac stands for Federal Home Loan Mortgage Corporation.

But what do Fannie Mae and Freddie Mac actually do?

It’s most likely your mortgage lender will not process your loan for its entire life of up to 30 years. While profits are made on loans through fees and interest, many banks and lending institutions will sell their loans to other entities in an effort to generate cash flow. Fannie Mae and Freddie Mac basically help propel the mortgage market forward by purchasing loans from lenders for cash and pools them together in bundles to sell them as mortgage-backed securities. Money is made in the buying and selling of these securities on the open market, and also through profit dividends. It’s usually a win-win for everyone involved. Except… Continue reading

Qualified Veterans may be eligible for home loan up to $668,750 to purchase property in Santa Clarita.

It goes without saying that those who have served honorably in our military services deserve our thanks and support. The Federal Government thinks so, too. Since the end VA Home Loanof World War II, the Veterans Administration has made it possible for vets to obtain home mortgages with zero money down.

With a population in California of just under two million, veterans from all branches and all walks of life are returning from military service in search of a better life. The VA offers many benefits and services to military veterans that include active, retired, reservists, and those who concluded their term of service with an honorable discharge.

The Veterans Administration does not grant loans. They guarantee a portion of the loan to the mortgage lender who is servicing the loan for the qualifying veteran under the program.  Continue reading

An overview of mortgage loan choices and their pros and cons.996860_12408526

In many cases, those who think they want to buy a home hold off because they don’t understand the options available to them when it comes to home loans. Understandably, not everyone can save up for a 20 percent down payment, which is why most lenders will offer choices to home buyers. For those of you thinking it’s time to venture into home ownership, what follows is an overview of the most common home loan types. Note that home loan availability is subject to credit approval, and that within each loan type, there may be several options that your lender can provide for you. We can help answer those questions and provide resources to help you make your final choice. Contact us to find out more. 

Common Home Mortgage Loan Types

Conventional Fixed-Rate Mortgage

This one is relatively self-explanatory with no surprises. Home buyer receives a home loan at an interest rate that is guaranteed for the life of the loan. Continue reading

HARP Program Pushed Out Until The End Of 2015

On April 11, 2013, the Federal Housing Finance Authority (FHFA) directed Fannie Mae and Freddie Mac to extend the Home Affordable Refinance Program (HARP) by two years to end on December 31, 2015. The program was originally set to end at the end of December 2013.

HARP is part of the Making Home Affordable program launched by the Obama Administration in 2009 to help curb the rising tide of home foreclosures that were a result of the great recession that began affecting many homeowners negatively starting in 2008. Making Home Affordable consists of several programs backed by the U.S. government to assist troubled homeowners. HARP is one of a dozen options for distressed homeowners.

Since the program began, over 2 million homeowners have taken advantage of the Home Affordable Refinance Program by refinancing their mortgages under more affordable and stable terms.  Continue reading

Home Affordable Refinance Program helps homeowners refinance when other options are not available.

While there are definite signs of improvement in the housing market and other areas of the economy, many Santa Clarita property owners are still struggling with their mortgage. In many cases it’s not so much that their financial situation has changed, but their equity may have yet to see the recovery that will make their property worth more than their mortgage loan. Many have tried traditional loan refinancing options only to find out they don’t qualify for a lower rate.

That’s where HARP comes in.

HARP (Home Affordable Refinance Program) is part of the federal government’s Making Home Affordable program, which has now been extended through 2013. It is designed to help homeowners who have exhausted all traditional means of refinancing their mortgage loan to a lower rate because they have little or no equity. The homeowner would receive a completely new loan with a new rate, completely replacing their current mortgage loan, which may move them to a more stable mortgage rate and even a lower monthly mortgage payment.

How does HARP work?

HARP may be an option for homeowners if:

  • They are current on their mortgage payments (IE: They have not been more than 30 days late on a payment in the past 6 months, and not more than once been 30 days late in the previous 6 months)
  • The value of the home has decreased
  • They have limited equity of greater than 80% of their property’s value
  • Your home mortgage loan is guaranteed by either Fannie Mae or Freddie Mac
  • Your loan was acquired by Fannie Mae or Freddie Mac prior to May 31, 2009

Homeowners can verify whether their loan is guaranteed by Freddie Mac by clicking here, and by Fannie Mae by clicking here.

Does the government own my mortgage if I participate in the HARP program?

No. HARP programs are offered through participating lenders. Your first step is to find out if your mortgage company participates in the HARP program. If you’re not sure where to start, feel free to contact us and we’ll be glad to point you in the right direction.

What if I still can’t qualify for a refinance through the HARP program?

Montemayor & Associates can offer several options to distressed homeowners to put them on the right path, or to help them avoid foreclosure. Use the contact form below to ask your questions. All inquiries are treated with discretion, and it never costs you anything to talk to us. We’re here to help.

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Tax Relief Act For Short Sales and Foreclosures In Effect Until 2014

Great news on the housing front! As part of the 2013 Fiscal Cliff negotiations, the Mortgage Debt Relief Act has been
Mortgage Debt Relief Act extended through 2013extended through 2013.

Originally passed in 2007, the Mortgage Debt Relief Act gives homeowners who short sell their property the opportunity to exclude income from the discharge of debt on their principal residence. Debt reduced through mortgage refinancing or loan modification, as well as mortgage debt forgiven in connection with a foreclosure, qualifies under this act as well.

The Mortgage Debt Relief Act originally applied to debt forgiven between the calendar years 2007 through 2012. Up to $2 million of forgiven debt is eligible under this act, or  $1 million if married filing separately. This will not apply if the forgiveness of debt is due to services performed for the mortgage company or lender, or any other reason not directly related directly to a decline in property value or the homeowner’s financial status.

How Does the Mortgage Debt Relief Act Affect Someone Facing Foreclosure?

In a nutshell, if you are upside down on your mortgage and are potentially facing foreclosure, you will not be liable for the taxes due on the difference between the final selling price of your home, and your home loan amount (provided the loan amount is larger than the selling price of your home), if you short sell your property.

Remember also that the benefits of short selling rather than allowing the bank to foreclose on your property are rather sizable  They include:

  • No out-of-pocket costs normally associated with the sale of your home including realtor commissions, title fees, escrow fees and closing costs. 
  • The ability to purchase a home much more quickly (as little as 2 years) under qualifying conditions versus 7 years if you allow your home to fall into foreclosure.

Questions about the Mortgage Debt Relief Act? Contact us now!
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Capital Gains Rates to Remain the Same

There has been some misconceptions as to whether the capital gains tax rates will change under the “Fiscal Cliff”
negotiations. As of now, they have remained the same. In other words, capital gains rates of up to $250,000 for single persons, and $500,000 for married persons are exempt from taxation under the current law that was enacted during the Clinton Administration. This means that if a married couple sells a property, up to $500,000 of the profits from the sale of that home are tax exempt*.

*It is always best to consult your tax professional with regard to any questions regarding how taxes are applied to your finances.

Questions about capital gains or the real estate market? Contact us now!

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Are you considering a short sale?  NOW IS THE TIME!!!  Why is now the time???

With the Mortgage Debt Relief Act expiring at the end of December, there is a lot of uncertainty with how future short sales will be handled.  If the act is extended, which in reality does not have to be decided on until the end of next year, then everything will be “Business as Usual.”  BUT, if it is not, people who do not complete their short sales before the end of the year could possibly face being taxed with the full amount of the loss!

 

The only thing consistent about the extension is the fact that it is inconsistent.  So, do not let the bank or the government dictate your financial future.  Call Montemayor and Associates now to get a FREE private consultation and see what your options are.  If you want to keep your home, we can help you with that as well.  We look forward to getting the opportunity to help make your life a little bit easier.  Contact us soon as time is running out.  Direct 661-510-2789    Website: www.Bringingyouhomescv.com

We’re letting anyone who may be behind on their mortgage or are facing foreclosure that certain banks are now paying substantial sums to sellers who avoid foreclosure through the short sale process.

Depending on the lender,qualified homeowners who sell their home through a short sale are receiving on average around $3,000 directly from their lender after the transaction closes. We have found however, that some banks are providing an even higher dollar amount to qualified short sellers.

This is due in large part to the fact that it costs banks tens of thousands of dollars (The HIGH tens) to foreclose on a property. Even though, in an approved short sale, they are technically losing money based on the value of the property being short sold, it is substantially less than the cost of a foreclosure on their books.

We have the answers to your questions. If you or someone you know may be facing foreclosure, give us a call at 661-510-2789, or go to http://bringingyouhomescv.com.

What is the Mortgage Debt Relief Act?

The Mortgage Debt Relief Act generally allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief.

Yes, the IRS makes it sound pretty boring and perhaps even a bit unclear. Basically, the MDRA is a program that has been put in place to allow homeowners who have had to short sell their property to exclude the difference between the dollar amount their home was sold for vs. what their loan was worth. So for example, you short sold your home for $250,000, but your bank loan balance was $400,000 at the time you short sold your home, you would not have to include the difference as an asset or income on your tax return.

BUT…There are a few exceptions and limitations:

Up to $2 million may be excluded ($1 million if married filing separately.

Also, the loan must qualify as a purchase money loan, also known as “qualified principal residence indebtedness”. This means that the money from the loan was used to purchase or refinance the residence itself. Some refinance loans where money was taken out of equity to be used for items or services OTHER than home repair or upgrades may not qualify. Home Equity Lines of Credit (HELOC), and refinance loans where the money taken out was used for vacations or personal purchases may not qualify. However, we have been successful in getting the banks to allow these in certain cases. Contact us if you have questions about purchase money loans. 

It is always best to check with your accountant or tax professional prior to making any final decisions or acting upon any information involving taxable (or non-taxable) income. You can also contact us with your questions and we’ll help guide you in the right direction.

So what does this mean to you?

It means that, in most cases, if you are upside down on your loan you may qualify for under the Mortgage Debt Relief Act to avoid paying taxes on the outstanding loan amount of your property if you are in a situation where you must short sell your home to avoid foreclosure.

If you (or someone you know) is upside down on their mortgage and are facing foreclosure, give us a call at 661-290-3802, or go to http://bringingyouhomescv.com to learn how we can help save your home from the bank. 

A lot of our business lately has come from the short sale market. Our experience has helped many homeowners  avoid foreclosure through a short sale.

It’s really important, when considering a short sale in an effort to relieve yourself of the burden and financial distressed of a home that is worth less than you owe on your mortgage, to find an agent who not only understands the ins-and-outs of the short sale process, but also has the professional experience and tools to put together a short sale game plan that will help you avoid foreclosure.

HAFA (Home Affordable Foreclosure Alternatives) is a program we frequently use with our clients. HAFA is an official program of the U.S. Departments of the Treasury and Housing & Urban Development (HUD) and is designed to assist homeowners in making a smooth transition through a short sale. Choosing the right agent who understands the process by which HAFA operates is extremely important. Through HAFA, the home seller has options in which to avoid foreclosure:

  1. The homeowner can opt for a standard short sale.
  2. The homeowner can opt to relieve themselves of their mortgage obligation through a Deed-in-Lieu of Foreclosure.  A Deed-in-Lieu allows the homeowner to voluntarily surrender the property to their lender in exchange for the lender cancelling the loan.

Here are a few benefits of a short sale via the HAFA program:

  1. HAFA promises the seller a FULL RELEASE of their mortgage obligation on the property.
  2. Through HAFA, the lender will work with us as the listing agent to set an approved selling price, which can shorten the process of selling the home. In most cases when HAFA is not involved, the agent will set a selling price for the property that then has to go through a potentially lengthy approval process from the lender. HAFA helps to reduce that time and the approval process.
  3. Through HAFA, a short sale has potentially less impact on your credit once the sale is completed.
  4. In some cases, banks may provide the seller with relocation assistance by paying the seller a relocation stipend.

We have worked with several HAFA clients to help them avoid foreclosure, and are ready to help you or someone you know who may be in financial distress or are facing foreclosure. IT’S NOT TOO LATE! We can help! For more information, go to http://bringingyouhomescv.com, or call us for a free, no obligation private consultation at 661-290-3802.

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Client Testimonials
I had specific needs for my new home. Brandon was very patient with my unique situation and flexible when it kept changing. He showed me so many houses, but with little inventory, none of them were quite perfect or they had too much HOA or Mello Roos. Finally when we found The One, no HOA, no Mello Roos, it had been on the market for 4 days and I made an offer that morning. I was sure the sellers would give it to someone else but Brandon worked hard to make sure they accepted my offer and by that night, the house was mine. Had it not been for Brandon I would still be searching for a house because so far, there is still nothing better than mine.
Lisa G. , Saugus
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