One month left to close for first time homebuyers

Remember that closings must occur before July 1, 2010 to receive up to $8,000 in tax credit, so the clock is ticking.

I was at a wedding this weekend and a friend (who used a different attorney for the closing) was asking me about the credit because he has not received a commitment from the bank to date and he was getting very worried that he would miss the deadline. The fact is that he has time. Usually closings happen within a week of receiving a commitment and usually the commitment is the last step in being clear to close. Therefore, he should only start panicking during the week of June 21, 2010 if he has not yet received his commitment.

A great source for information about the first time homebuyer tax credit can be found by clicking here.

There you will learn about the necessary tax filing to receive the credit, inclusive of the need to file a paper return and attach Form 5405 and new homebuyers must attach a copy of a properly executed settlement statement used to complete such purchase. If the home is newly constructed, where a settlement statement is not available, the purchaser must attach a copy of the certificate of occupancy showing the owner’s name, property address and date of the certificate. Purchasers of mobile homes who are unable to get a settlement statement must attach a copy of the executed retail sales contract showing all parties' names and signatures, property address, purchase price and date of purchase.

Good luck and go get that credit.

A foreclosure way of life, it might work for you

I just finished 2 foreclosure defense consults and picked up a newspaper only to read exactly what I had just advised. You can stay in your home. No, the sheriff is not showing up tomorrow. You have time. My point is that if they banks start to learn how expensive foreclosure is by way of court / attorneys costs, the time value of their money that we are locking up, the depreciation in the value of the home, and the transactional costs of eventually selling a home they didn't want in the first place, maybe, just maybe they will learn that a modification is in their best interest.

To read a reassuring New York Times article on the topic, click here.

Tax liability for cancelled debt

I got a lot of questions last night at our Foreclosure and the Economy continuing education class about this topic, so I figure its one on everyone's mind.

Under the The Mortgage Debt Relief Act of 2007 a taxpayer can generally exclude from gross income monies that are forgiven under a short sale or deed in lieu situation. This is a great situation because the bank's agreement to not go after deficiencies should not result in the government making the borrower pay a huge tax. The purpose is to help someone without money, not to harm them. Yet, there are exceptions for qualified principal residence indebtedness, which is not related to the home's purchase or improvements (i.e. cashing our to pay other bills). Moreover, there are other means for a taxpayer to avoid paying income tax on other cancelled debt whether it be from credit cards or business properties. For 2 great articles on the topic, I direct your attention to this link, which is a great summary of the topic and this link, which is Publication 4681 from the IRS as the last word on the topic (from the government's perspective).

Remember, an insolvent debtor can always avoid paying income tax on cancelled debt.

Which Hampton is Your Hampton

Have you picked up this month's Homes of the Hampton's Magazine?

Sharing with you Andrew's most recent feature... "Which Hampton is Your Hampton".

Volume 23, Number 2, Page 44

-----------------------------------

Which Hampton is Your Hampton?

While sitting poolside this past Friday afternoon, my wife and I received a call from our friends, Ted and Luisa, who inquired what to bring to their Hamptons retreat from the City, and I began to wonder, do I live in the Hamptons? I know my house is located in a boating community within East Moriches, but is that the Hamptons?

In fact, what are the Hamptons? Are they the Hamlets and Villages that comprise the Towns of East Hampton and Southampton or are they the beaches, farm stands, boutiques, and restaurants that comprise the South Fork of Long Island? Are the Hamptons marked by the division of local governance or by the unique cultures that they emulate? And, what are those unique cultures? Where are those Hamlets? Better yet, what is a Hamlet?

Moreover, what’s the difference between a Town, a Village, and a Hamlet; and why does it matter? Before I delve into the answers to these vast inquiries I first thought it appropriate to put forth this proposition: “Your Hampton is your Hampton, even when it’s not a Hampton”.

Let’s start by understanding the legal answer to our inquiry. Technically, there are two (2) Towns within Suffolk County whose names include the word “Hampton”, to wit: Southampton and East Hampton. In such, it’s also important to note that there are only ten (10) Towns in Suffolk County, to wit: (1) Babylon; (2) Brookhaven; (3) East Hampton; (4) Huntington; (5) Islip; (6) Riverhead; (7) Shelter Island; (8) Smithtown; (9) Southampton; and (10) Southold.

Wait a second. I imagine that you are now shaking your head and asking yourself, isn’t Westhampton a Town? What about Bridgehampton? No and no. To be clear, Suffolk County only includes ten (10) Towns. Moreover, a Town is defined by Black’s Law Dictionary as “a center of population that is larger and more fully developed than a village, but that is not incorporated as a city”. Yet, as New Yorkers often do, we ignore this definition and require our Towns to be incorporated.

A Hamlet is defined as “a small village”, although again we are difficult in Suffolk County and add the word “unincorporated” to the definition. Lastly, a Village is defined as “a municipal corporation with a smaller population than a city”. At last, we in Suffolk County can join the rest of the country in this definition. To be clear, all of the beautiful residences within the pages of Homes of the Hamptons exist in a Town, but none exist in both a Hamlet and a Village. A purchaser gets one or the other, but not both.

While those legal definitions sound like a big headache, there is a practical reason that these definitions should be considered in your purchasing decision: TAXES. That’s right TAXES. If you purchase a home in a Village there is an additional level of governance and accordingly where there is additional government there are additional taxes. Plus, there are also additional services, which many find to be a requisite aspect of their life, but both are beyond the breadth of this

article.

So with a better understanding of these definitions, let’s name the Villages and Hamlets within the Town of Southampton. There are seven (7) Villages within Southampton's boundaries, to wit: (1) Sag Harbor; (2) North Haven; (3) Quogue; (4) Westhampton Beach; (5) Westhampton Dunes; (6) Southampton and (7) Sagaponack.Moreover, there are nineteen (19) Hamlets within Southampton’s boundaries, to wit: (1) Remsenburg; (2) Speonk; (3) Hampton Bays; (4) Westhampton; (5) Westhampton Beach; (6) Quiogue; (7) Flanders; (8) Riverside; (9) Northampton; (10) East Quogue; (11) Eastport; (12) North Sea; (13) Bridgehampton; (14) Water Mill; (15) Sagaponack; (16) Noyac; (17) Shinnecock Hills; (18) Tuckahoe; and (19) Southampton.

Let’s also explore the Villages and Hamlets within the Town of East Hampton. There are two (2) Villages within East Hampton’s boundaries, to wit: (1) Sag Harbor; and (2) East Hampton. Moreover, there are six (6) Hamlets within East Hampton’s boundaries, to wit: (1) Amagansett; (2) East Hampton North; (3) Montauk; (4) Northwest Harbor; (5) Springs; and (6) Wainscott.

Now the question remains, are East Hampton and Southampton the only Towns in the Hamptons? Well, certainly the Western Suffolk Towns of Babylon,Huntington, Islip, and Smithtown are out, as well are the Northern Suffolk County Towns of Riverhead and Southold. That leaves Brookhaven and Shelter Island. Are they in the Hamptons? If you believe that the Hamptons are an area abutting the Southern Bays and Oceans of Long Island, then Shelter Island, located within the Peconic Bay is out, and only Brookhaven remains. Parts of Brookhaven are also located in Northern Suffolk County and must be excluded, but parts, such as the Hamlet of East Moriches, are located within a stone’s throw of Southampton and must be considered. Moreover, any local can tell you that the Hamptons are moving West. So, in the end

I am choosing not to correct my friends. They are coming to the Hamptons for the weekend. East Moriches is my Hampton, is it yours?

Spring home buying guide for long island - newsday

A great little article that goes into the different regions in Long Island and what is happening with current sales. A must read by Kristin Taveira if you want to learn what is happening this spring in sales. Click here for a link to the article.

HAMP is Alive

Many in the news are saying that Home Affordable Modification Program is dying. They point to insufficient income as the cause, I submit its insufficient application skills. My firm has many alive HAMPs. I am lecturing attorneys in Nassau this evening on how to navigate the program as well as the rest of Making Home Affordable. The problem is all of the press that says homeowners can do this themselves and that they don't need help. Yes, homeowners can technically submit their own application, but having a lawyer seems pretty important in all other aspects of citizens legal lives (for instance Miranda Rights), why not here? Lets get some really trained attorneys who can fight for our clients in CPLR 3408 Settlement Conferences and you will see HAMP be reborn!