Ever wonder what the difference is between a "short sale" and a "deed-in-lieu of foreclosure". This link below explains the differences and the advantages of one or the other. There are also some links to the IRS website that talks about the "Mortgage Loan Forgiveness Act of 2007".

http://www.foreclosures.com/forecast/ff_Jun10/default.asp?topic=marketing

Senate Passes Finance Reform Legislation

Anti-Predatory Lending Laws to Hurt Investors

National REIA - Despite the ardent opposition from National REIA, many state associations across the country and other industry organizations, the Anti-Predatory Lending laws that we have been fighting are now closer than ever to becoming the law of the land after the recent passage of HR 4173 in the Senate on May 20, 2010.

To fully grasp the impact that this legislation could have on the Real Estate investing industry, as well as the economy as a whole during this fragile recovery process please see the Economic Impact of Seller Financing graphic.

*This flow chart, based on a study conducted by RealTrends and Harris Interactive, commissioned by Personal Real Estate Investor Magazine and other partners explains that for every one percent of homes sold by investors each year that $3.2 Billion dollars in Seller financing transactions occur. The one percent is a very low estimate and some industry professionals would estimate that more than 5% of homes sold by real estate investors are sold via seller financing. This would mean that $16 Billion dollars in real estate transactions are going to be eliminated.

History of our fight

On March 26, 2009 Rep. Brad Miller (D-NC) introduced HR 1728, the Mortgage Reform and Anti-Predatory Lending Act which passed the House on May 7, 2009. After speaking with Rep. Miller’s staff during our 3rd Annual Day on the Hill event, even he was unaware of where the language referring to individual property owners came from. According to his staff it had not been his intent to negatively impact property owners in such a way, but we’ve all heard the term, unintended consequences.

Despite its rapid movement in the House, HR 1728 died in the Senate Committee on Banking, Housing, and Urban Affairs, which we were very happy about. Our sense of comfort was short lived, however, when we learned that the exact wording from HR 1728 had been cut and pasted into HR 4173 the Wall Street Reform and Consumer Protection Act which was introduced in the House on December 2, 2009 by Barney Frank (D-MA) and passed on December 11, 2009. The passage of a bill that would seek to reform the entire financial system (the bill is over 1,400 pages in length) in less than two weeks is unheard of, but this is what we’re up against.

Unlike HR 1728, which had no companion bill in the Senate, HR 4173 was tied to S 3217, Restoring American Financial Stability Act, and we knew we’d have to fight to have the language we have been concerned with all along removed. Considering Senate Bill 3217, introduced by Senator Chris Dodd (D-CT) did not contain the same harmful language we were optimistic that we may have a chance to have the section pertaining to individual property owners removed if the bills required a conference committee. In a surprising and unfortunate move, however, the Senate dropped debate on S 3217 after repeated attempts by Senate leader Harry Reid (D-NV) to force cloture, and passed an amended version of HR 4173 which contained the same language requiring all sellers who finance more than one of their own deals in every 36 month period to become licensed as Mortgage Loan Originators.

What’s Next?

As the Senate version and the House version of HR 4173 are different they will require a conference committee hearing, but because the language in Title VII does not differ, the committee will not even address our concern. The final bill has not yet been passed by either chamber or signed by President Obama, but these are just formalities now that the real work has been completed.

Our next move is to continue our advocacy efforts regarding HR 3440, the Installment Sales bill that we have been supporting since its introduction in 2008. This legislation if passed may be a vehicle for an amendment to HR 4173 that would clarify an exemption for individual property owners and it is now our mission to identify a legislator who will be willing to introduce and support this type of amendment.

Despite the feeling that we have been dealt a direct blow, it is important to remember that our industry was not the specific target of the financial reform efforts. We must continue to clarify our intentions to professionally rebuild communities, and point to the positive impact that real estate investors can have on communities across this country.

As we again push the reset button in the wake of another hard fought battle lost, we must reassert our dedication to our businesses, and take aim at initiatives that will enable us to continue playing our role in the ongoing economic recovery process.

If you have questions about how you can help, please do not hesitate to contact your local Real Estate Investors Association which you can find at http://www.nationalreia.com/.

Would you walk away? | Inman News

Would you walk away? Inman News

Here is an article by Teresa Moardman with Inman News that speaks about walking away from your home loan.

Did you see 60 Minutes last Sunday? They did a piece on Strategic Defaults. Here is the piece:

http://www.cbsnews.com/video/watch/?id=6470184n&tag=api

Freddie Mac News on Emerging Fraud Trends: Short Payoff Fraud

Freddie Mac has just released a news item regarding Short Payoff Fraud. Plainly stated, if you purchase a property at a discount and the lender must accept a short payoff, but you already have a new purchaser under contract and do not disclose that purchase transaction to the shorted lender, they consider that fraud.

Here is a link to the news on the Freddie Mac website:

http://www.freddiemac.com/singlefamily/news/2010/0412_payoff_fraud.html

First-Time Homebuyer Credit for Members of the Military

While the First-Time Homebuyer's Tax Credit is set to expire soon, there is a special exception to these deadlines for the military. In summary, if you were a member of the military and/or certain other federal employees that served outside the US, you have an extra year to buy a principal residence and qualify for the credit.



To be eligible, you must have served outside the US for at least 90 days during the time of January 1, 2009 and April 30, 2010. You must be in contract to purchase a principle residence by April 20, 2011 and close on the transaction by June 30, 2011. There are provisions for eligibility of you had to return to the US for medical reasons prior to the 90 period.



For complete details, follow this link to the IRS.gov website:



http://www.irs.gov/newsroom/article/0,,id=215594,00.html



Thank you, and check back often. Cody

First Time Homebuyer's Credit soon to expire

The First Time Homebuyer's Credit will soon expire. You must have a fully signed sales contract in force by April 30, 2010 and close by June 30, 2010 to qualify. First time homebuyer's may receive a credit up to $8,000, and move-up purchasers may be entitled to a $6,500 credit. There are some income and qualifications to receive the credit. Watch the video below from the IRS for a few more details.

http://www.youtube.com/watch?v=GkzB03uuGlg

Thanks, Cody