LIEB BLOG

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Showing posts with label real estate news. Show all posts
Showing posts with label real estate news. Show all posts

Thursday, December 12, 2013

Mortgage Changes less than a Month Away – What to expect on January 10, 2014

A whole new world of getting a mortgage is coming in the beginning of 2014. You should get familiar now!!!

To remind you, in the years before 2008, financial institutions were subject to little regulation in the United States. Many lenders did not even bother to verify income or debt before handing over adjustable-rate mortgages (ARMs) to consumers who could not afford them. High risk lending was the norm and mortgage fraud was rampant. These practices caused the subprime mortgage crisis and the worst recession that the country has experienced since the 1930s. Thousands of homes were foreclosed on and over one hundred mortgage lenders went bankrupt as more and more people could no longer afford their monthly mortgage payments.

As a result, The Consumer Financial Protection Bureau is issuing a final rule that prohibits high risk lending and implements the Truth in Lending Act and sections 1411, 1412, and 1414 of the Dodd-Frank Act. This rule will take effect on January 10, 2014, and will require mortgage lenders to verify consumers’ income and debt. Prepayment penalties that punish borrowers if they sell or refinance their home within a certain time frame are now generally prohibited. Qualified mortgages, which are less likely to end up in default, are defined in great detail and cannot have terms longer than 30 years or fees exceeding 3% of the total loan amount.  Lender are also encouraged to refinance adjustable-rate mortgages (ARMs) and must maintain documentation of compliance for three years after the loan is given to the consumer.


To remain in the real estate game, you must understand these rules and what a qualified mortgage is as that will drive the industry. Please read the rule for yourself!

Will We See an Extension of the Mortgage Forgiveness Debt Relief Act through 2014?

The Mortgage Forgiveness Debt Relief Act of 2007 has provided relief to thousands of borrowers who have completed short sales or obtained loan modifications with mortgage principal reductions. Before this law was enacted, any forgiven mortgage debt was taxable by the government. For example, if a lender reduced a borrower’s principal balance by $100,000.00, then the borrower would have to report that forgiven debt as ordinary income and pay taxes on it.  This was, of course, impractical and unreasonable for borrowers who were already experiencing financial hardship and were relying on modifications or short sales to save them from foreclosure. Most borrowers could not afford their tax bills and were stuck in the same situation as they were in before they had requested help from their lenders.

Under The Mortgage Forgiveness Debt Relief Act of 2007, borrowers do not have to pay taxes on cancelled mortgage debt as a result of a modification or foreclosure of their primary residence. This act was originally supposed to end at the end of 2012, but it was granted an extension through 2013 on the third day of the new year.

An extension may be granted through 2014, but it is unlikely. Both H.R. 2788 and H.R. 2994 are bills that will extend The Mortgage Forgiveness Debt Relief Act for at least another year, but they were each referred to committee over the summer and have received no attention since. There are 44 cosponsors for H.R. 2994, but it is already now the middle of December and time is running out. In order for this bill to be enacted, it still needs to pass the House and Senate and it must get signed by the President before December 31, 2013. It is improbable that an extension will be granted, but not impossible; especially with the economy rebounding and many forgetting the plight of those left behind. It’s important to not forget these individuals that still need relief and who have often spent years trying to get a modification or a short sale approved only to now be taxed when they finally get the relief that they have hoped for.


So for them, please tell your local representative how important it is that these Bills are passed and The Mortgage Forgiveness Debt Relief Act of 2007 is extended for another year.

Thank you to Lieb at Law's Assistant Case Manager, Jessica Vogele, for sharing this valuable information. 

Monday, October 14, 2013

Crowdfunding in Real Estate is Alive - Welcome GroundBreaker

On May 14, 2012 we predicted that crowdfunding would be implemented to create the next real estate tycoon.

Now, GroundBreaker has launched and the future is now. As the site states "Our real estate fundraising platform is now available to entrepreneurs of all sizes. We make it possible for you to efficiently fundraise from your extended network or the world".

So, entrepreneurs, its time to leverage the digital world to make brick and mortar rise!

Friday, October 11, 2013

Tune into 88.3 FM (Peconic Broadcasting) 10/11 and 10/12 at 5:30pm - Real Life

Tune into 88.3 FM (Peconic Broadcasting) Real Life with John Christopher at 5:30pm tonight and tomorrow night. 

Andrew Lieb will be on at 5:50pm discussing the latest real estate issues facing the east end of Long Island.

http://peconicpublicbroadcasting.org/


Wednesday, August 07, 2013

The President: "A Better Bargain for the Middle Class: Housing"

When the President speaks on housing, its a must to know the facts. The Fact Sheet from the President's speech on August 5, 2013 lays out the following key goals:
  1. An increase in refinancing before interest rates go up 
  2. Cutting red tape
  3. Increasing home values by fixing our broken immigration system
  4. Helping the hardest hit communities rebuild
  5. Increasing decent & affordable options for renters
Of particular interest was the President's goal to put private capital at the center of the housing finance system by stating that current "government guarantees [of] more than 80% of all mortgages through Fannie Mae and Freddie Mac and FHA, is unsustainable".