Real Estate Information Archive

Welcome to 2011, it is going to be a great year and I'm excited to see where it takes us!

Changing Short Sale Rules - The HAFA program has been a mixed bag, but last week the Treasury Department changed the rules to make short sales easier. 

Here are the primary changes to HAFA: 

- Those seeking a short sale must get an answer within 30 days
- Lender Servicers are no longer required to verify a borrower's financial information
- Lender Servicers are no longer required to determine if the debt-to-income exceeds 31%
- Though Second lien holders no longer must accept 6% of the unpaid balance - 

Overall, these changes should help expedite short sales, which is good news for Home owners, realtors, investors and ultimately the banks.

If you are looking for a way to sell you home that you feel is worth less than you owe on it, we can help.  Please contact us on this link or try the chat button at the bottom of the page.  You can also stop by this helpful short sale information site as we by clicking here.  

Here is to a healthy, wealthy, and exciting 2011!

 Help for the Hardest-Hit Housing Markets 

1. $1.5 Billion to Work with State Housing Agencies to Innovate and Help Address the Problems Facing the Hardest-Hit Housing Markets 

• There will be a formula for allocating funding among eligible states that will be based on Home price declines and unemployment. 

• HFAs must submit a program design to Treasury. 

• Programs may include:  Measures for unemployed homeowners; 

 Programs to assist borrowers owing more than their home is now worth; 

 Programs that help address challenges arising from second mortgages; or 

 Other programs encouraging sustainable and affordable homeownership. 

 

2. Accountability and Transparency for these Housing Programs 

• All funded program designs posted online. 

• Accountability for results – program effectiveness measured and results published online. 

• Effective oversight under the Emergency Economic Stabilization Act of 2008.

Click here for more information on this program.

Understandably, homeowners who apply for a loan modification tend to get a little antsy and perhaps even annoyed when they apply for a loan modification and then fail to hear anything for several weeks, especially if they continue to receive late payment notices and nasty phone calls from collection agencies.

Many homeowners wonder, “How long will it be before I hear anything?” and “What should I do while I’m waiting.” This article should help answer those very pressing questions.

How long will it take?

The loan modification process typically takes 30 to 90 days, depending mostly on your lender and your ability to efficiently work through the process with your attorney or other loan modification representative.

Note: The loan modification timeline is not set in stone. The more complex your situation or the greater the degree of concessions needed from the investor, the longer the process takes. Borrowers with a lot of collateral issues can see their loans take longer than what has become the typical 30- to 90-day timeframe.

A professional can often reduce the amount of time required by processing your paperwork efficiently, presenting your application exactly the way the lender wants it, and knowing from past experience what the lender is able and typically willing to agree to. Although each borrower’s situation is unique, knowing the measures the lender is willing to take for similarly situated borrowers can be a real time saver.

Whether you are dealing directly with your lender or through a loan modification specialist, ask several questions up front:

How long is the process likely to take? Find out the best- and worst-case scenarios and then count out the days and mark them on your calendar.

When can I expect to hear something about my case? Mark this date on your calendar.

If I don’t hear anything by the specified date, whom should I contact? Get the person’s name, employee identification number (if available), phone number, and any extension you need to dial to reach the person directly.

What should I do while I’m waiting?

Playing the waiting game can be agonizing, particularly when you have no idea of whether your application will be accepted or rejected or what the lender will offer in terms of a workout. It feels like your future hangs in the balance, and you remain in the dark. Knowing the standard timeline for processing a loan modification can certainly help relieve some anxiety. In addition, you can continue to make progress on your own by doing the following:

If you hired a loan modification specialist to represent you, do not speak with your lender or lender’s representative. Refer all matters to the professional who is representing you. Anything you say to the lender could confuse things or compromise your representative’s ability to negotiate the best deal on your behalf.

Log all phone calls and correspondence between you and your lender or representative. Write down the number you called, the person you talked with, what the person said, and what you said - not word for word, just jot down the key points.

Keep track of important dates. If you do not hear something back on the date promised, call the next day to find out what’s going on. Lenders almost never call you back with updates. If you hired a third party representative, they will (or should) keep you posted, but the lender simply doesn’t have the time to make follow up phone calls. If you’re dealing with your lender directly, you’ll have to be the one making the calls. Mark your calendar and schedule periodic update phone calls. Consistent follow up is paramount to a successful modification.

Explore other options. If the lender denies your request for a loan modification or presents an offer that you cannot accept, you will need a plan B (and maybe a plan C and a plan D). In addition, other options may be better for you than a loan modification. Consult a real estate agent about listing your Home for sale. Talk to a mortgage broker or loan officer about refinancing. Speak with a bankruptcy attorney to find out whether filing bankruptcy would be a better choice.

Don’t be surprised if you continue to receive delinquency notices or late payment phone calls. Lenders rarely put a stop on the foreclosure process until a workout solution is fully in place. You should ask your lender if your attempts to negotiate a solution will stop or at least postpone other collection actions. If they do not, you should find out what that means for you. If the lender is able to foreclose in 30 days and a workout takes 60 days, there’s a slight timeline problem. Push to have all default and foreclosure actions put on hold while your workout attempts are underway.

When your fate is in someone else’s hands, 30 to 90 days can seem like an eternity. By doing your part to keep the process on track, remain informed, and explore other options, you not only improve your chances of achieving a positive outcome, but you can also reduce the stress that commonly accompanies the waiting process.

To get a market report on your homes value in the Washtenaw County area Click Here
For information on new home listings Click Here

A Nutshell Lesson for Your 10 Minute Presentation

 

 

With our Michigan economy and money supply tight, many people are looking for financial relief. Our 2008 tax assessments have arrived and while they have provided a reprieve for many, some tax payers are scratching their heads wondering, “They say my value dropped, so how can it be that my taxes have again gone up?”

This year, the assessors and Boards of Review have been swarmed by upset tax payers looking to land one of the few available appeal appointments in the next few weeks. Some cities have limited appeal hearings to 10 minutes. My purpose in writing this is twofold: first, to help those who have a case, prepare it; second, to help those who don’t, understand why they don’t so that they don’t waste their time trying.

 

There is one and only one question that typically matters with a Board of Review… do the SEV(State Equalized Value) or Taxable Value exceed 50% of the market value of the property? Things that are irrelevant and not actionable by the Board of Review include: taxes going up while values are dropping; and the fact that subject property taxes are higher than taxes of neighbors, the fact that a property owner feels her taxes are excessive. Even if the taxpayer is right, it doesn’t matter. What does matter for Board of Review purposes and for a decision that will affect this year’s taxes is that the taxpayer shows their new Taxable value is greater than 50% of the market value of their Home as of the December 31^st of the prior year.

 

Since 1994 Michigan property taxes have had 3 values:

            SEV = assessor’s estimate of 50% of the market value of your home.

            Capped Value=  the 1994 SEV (or the SEV from the year following the most recent transfer of ownership) plus annual adjustments for cost of living (CPI, not to exceed 5% in any year).

            Taxable Value= the lesser of the SEV or Capped and the factor that is multiplied times the city’s tax rate to determine property taxes.

 

In the late ‘90’s we had a little tortoise and the hare action as property values and SEVs were shooting up and Capped/Taxables were plodding along behind.  We’re seeing situations today where the tortoise has gotten close or even passed the hare. We rarely saw Capped values exceed SEVs. We are starting to see that now, with declining property values pulling down SEVs and cost of living increases lifting Capped values. It is especially common where there was a recent sale and “uncapping” followed by a reduction in the SEV by the Assessor.

 

SEVs are adjusted by our Assessors, while our Caps are statutorily adjusted according to the Consumer Price Index (2.3% for 2008 and roughly 2-3% in recent past years).

 

 

Back to appeals

While there may be a reason we may want to reduce our SEV (i.e. in anticipation of an upcoming sale), for most taxpayers, the number of most significance is the Taxable value. The other numbers may or may not mean anything to us, but our Taxable Value is the factor that the Assessor multiplies times our tax rate to determine our property taxes. To lower my 2008 taxes, I need to demonstrate to the Assessor and Board of Review that my Taxable Value exceeds 50% of the market value of my home as it sat on December 31, 2007. Be focused. For practical purposes, Nothing Else Matters!  I recommend you get a formal appraisal dated 12/31/07 that  you can use for the board of review and later if needed for the State Tax Tribunal appeal. It makes a presentation much easier and credible. contact me if you need a referral for an appraiser providing a discount.

 

It doesn’t matter that I think my taxes are too high. It doesn’t matter that I pay more than my neighbor whose house is 75% larger. It doesn’t matter that my taxes went up while my value (even according to the Assessor) dropped. Basically the only way I can get my Taxable Value and/or SEV reduced is to demonstrate to the Assessor and Board of Review that my Taxable Value or SEV exceeded 50% of the market value of my home as of December 31, 2007. Again the number of most significance for a reduction of this year’s taxes is  Taxable Value. Unless I can persuade the Board of Review that my Taxable Value exceeds 50% of the market value of my home, I won’t save anything on my 2008 taxes.

 

Assembling and presenting your case.

As the tax payer, it is my responsibility to collect the materials and present a case (in about 5 minutes) that will convince the Board of Review that my Taxable Value and/or SEV exceed 50% of the market value of your home. Some people choose to pull together recent sold information on their own. Some hire appraisers. Many who have existing relationships with good real estate professionals call on them for help.

 

Keep it clear and simple.

Walk in the door with a positive attitude. Be nice. Today you are a salesperson making a sales presentation. Your job is to make it easy for the Board of Review to see and agree with your point. You only have about 5 minutes to present and a few minutes to answer questions. Focus on Value. If you are bringing comparables or other visuals, make copies so each member of the Board of Review has a copy. Keep it simple and tight. Be logical, reasonable and friendly (you are asking the same of the Board members).

 

If you recently purchased your home and your SEV/Taxable are higher than they should be, it is important that you appeal your assessment in the year following your purchase. By doing so, you preserve what might be the most compelling piece of evidence you have in establishing its market value… the selling price of your home. By doing so in the year following your purchase you will also establish a new starting benchmark which may affect and reduce taxes this year and all future years you live in the home.

 

The purchase price of a home is not conclusive in itself. We need to establish: that the home was on the open market for a period of time; that the transaction was an arms-length transaction; that the sale price is the best indication of market value as of the date of the sale; and that due to market conditions, the value of the property as of December 31^st in the preceding year had not increased since the sale.

 

Results from Your Hearing

Appealing taxpayers typically don’t receive an answer while at the Board of Review hearing. Different Boards may work in different ways, but most often, taxpayers present their case and leave. Board members then review and discuss the evidence behind closed doors and make a decision that is then sent to the taxpayer via mail which arrives a few weeks later with directions for appealing the Board of Review decision.

 

As a community service, I have posted other articels and information under the tax category heading and would suggest that you review them. There are some helpful materials to help you understand this confusing subject.

 

There has never been a time when homeowners were more in need of professional help from a REALTOR®.  Please feel free to contact me any time at 734-996-0000 or [email protected]

Many consumers with nontraditional and other new types of mortgages with lower initial payments are now facing significant increases in their monthly payments — called "payment shock."

The brochure download below explains the types of mortgages that are placing families at risk, provides suggestions for getting help by talking to a Tom Stachler with Real Estate One and reputable counseling persons or organizations, and urges borrowers to work with experts and their lender as soon as possible. The brochure lists some of the ways lenders may be willing to help borrowers avoid foreclosure.

Produced jointly by NAR, the Center for Responsible Lending, and NeighborWorks^® America, this 5-panel brochure allows us to help consumers take early action to protect their homes whenever possible.

Need Help with determining your Property Value?  Click on this link to get a valuation report on your property emailed to you containing sold and active (comps) property pricing, marketing tips and more.

Download Learn How to Avoid Foreclosure and Keep Your Home (PDF: 1.7MB

Download brochure text (PDF: 71KB)

HOUSING MARKET HOLDS STEADY

The housing market will hold close to present levels in the months ahead, according to Lawrence Yun, the National Association of REALTORS® senior economist. "Existing-Home sales should be relatively stable over the next few months, holding in a modest range, with some pent-up demand growing from buyers who’ve been on the sidelines," he said.

"Mortgage disruptions will hold back sales over the short term, but long-term fundamentals are favorable. A modest up turn is projected for existing-home sales toward the end of the year, with broader improvement to include the new-home market by the middle of 2008."

The Ann Arbor Area Board of REALTORS® July Housing Statistics demonstrate the economic outlook of Lawrence Yun’s projections. When compared with July 2006, median residential and condominium sales prices are on the rise. New listings show a decline of 13 percent, while pending sales increased 21 percent and average list and sale prices increased by $2,730 and $3,970 respectively.

How would you like to take title to your new home, Mr. and Mrs. Purchaser?" the attorney or title closing settlement officer asks.

Thinking fast, you ask, "Well, how do most married couples take title?"
The reply is usually something like: "Most couples take title in joint tenancy."

Not wanting to appear stupid or uninformed, you reply, "That's fine with us." But do you fully understand the implications of holding joint-tenancy title?

>To be legally correct, joint-tenancy real estate ownership means "joint tenancy with right of survivorship." A few states require use of those exact words on the deed. But in most states, "joint tenancy" is sufficient.

Survivorship means the joint tenant who outlives the joint tenant co-owner(s) automatically receives the deceased's share of the property without probate court costs or delays. Probate court avoidance is considered the major joint-tenancy advantage.

All that is usually necessary to clear the title of a deceased joint tenant's name is to record a certified copy of the death certificate and an affidavit of survivorship with the local recorder of deeds.

The will of a deceased joint tenant has no effect on their joint-tenancy property. However, joint tenants still need a written will. In the event of simultaneous death of all the joint tenants, such as in a plane crash, the will of each deceased joint tenant determines who receives their share of the property.

Or, in the unlikely event one joint tenant kills another joint tenant, the wrongdoer cannot receive the deceased joint tenant's share by survivorship, so the deceased joint tenant's will then becomes important.

Although joint tenancy usually involves two co-owners, such as husband and wife, there can be an unlimited number of joint tenants. But they all must take title at the same time by the same deed, and they all own equal shares.

For example, suppose John and Mary Purchaser purchase their Home as joint tenants. Each therefore owns a 50 percent share. However, when their daughter, Suzy, becomes 18 they decide to add her as an additional joint tenant.

To add Suzy to the title, John and Mary sign and record a quitclaim deed from themselves to John, Mary and Suzy as joint tenants with right of survivorship. The result is each of the three joint tenants now own a one-third interest in the home.

In 24 states, a husband and wife can hold title as tenants by the entireties, which is very similar to joint tenancy. However, neither spouse can convey their tenancy by entirety share without the other spouse's signature.

This ownership form overcomes the joint-tenancy disadvantage that one joint tenant can transfer his/her share without approval of the other joint tenant(s), thus breaking up the joint tenancy and creating a tenancy in common.

Tenancy by the entireties for husband and wife is allowed in Alaska, Arkansas, Delaware, Florida, Hawaii, Indiana, Kentucky, Maryland, Massachusetts, Michigan, Mississippi, Missouri, New Jersey, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Tennessee, Vermont, Virginia, Wyoming, and the District of Columbia.

Before consulting your attorney or other trusted adviser to determine if joint tenancy with right of survivorship (JTWRS) is right for your situation, it pays to know the pros and cons:

Probate Costs And Delays Are Avoided. When a joint tenant dies, his or her share automatically passes to the surviving joint tenant(s) without probate court interference. This is considered the major joint-tenancy advantage.

A Joint Tenant's Will Does Not Affect Jtwrs Property. Except for joint-tenancy simultaneous death or murder situations, a written will has no effect on JTWRS property. Especially in second marriages, where each spouse often wants to leave their half of the property to children of their first marriage, better alternatives might be holding title in a revocable living trust or as tenants in common.

Joint Tenant's Share Can Be Attached By Judgment Creditors. Unknown to most joint tenants, judgment creditors of one joint tenant can attach that person's share of the property. Or, if a joint tenant files bankruptcy and there is sufficient equity in the property, the bankruptcy court can order the property sold with the proceeds divided among the co-owners.

However, after a joint tenant dies, creditors cannot attach the deceased's share, which automatically passed to the surviving joint tenants.

In A Partition Lawsuit, One Joint Tenant Can Force A Sale Of The Property. In most states, one joint tenant co-owner can bring a partition lawsuit to force a sale of the property. Tenants in common also have this right.

All Joint Tenants Can Occupy And Manage The Property. Although each joint tenant has the right to occupy and manage the property, this can become a problem if one joint tenant refuses to pay his or her share of the property expenses.

<However, if one joint tenant pays all the expenses, there is a right of reimbursement for necessary costs, such as property taxes.

If a joint tenant is under 18, a minor cannot convey title or pay their share of the property expenses unless represented by a court-appointed guardian. For this reason, minors should usually not be added to the title as joint tenants.

Similarly, if a joint tenant becomes incapacitated, such as with Alzheimer's disease or a severe stroke, a court-appointed conservator might be necessary to represent the incapacitated joint tenant. However, this problem can be avoided if title is held in a revocable living trust instead of joint tenancy.

Approval Of Co-Owners Is Not Needed To Break Up A Joint Tenancy. Except for tenancy by the entireties between husband and wife, one joint tenant can secretly convey his/her share to a third party, thus breaking up the joint tenancy and creating a tenancy in common.

The most famous court decision on this issue is the 1980 decision in Riddle v. Harmon (162 Cal.Rptr. 530). Shortly before her death, the wife secretly conveyed by a quitclaim deed her joint-tenancy share to herself as a tenant in common. After her death, the surviving husband presumed he owned the entire property as the surviving joint tenant. But the court ruled the late wife's secret deed to herself as a tenant in common made her half of the property subject to her will, which left her assets to a third party. The widower husband retained his 50 percent share as a tenant in common.

Non-Simultaneous Death Of Joint Tenants May Have an Unintended Result. When all joint tenants die at the same time and the order of death cannot be determined, such as in a plane crash, the share of each deceased joint tenant then passes according to his/her written will (or by the state law of intestate succession if no will is found).

However, if one joint tenant survives the other for just a short time, his or her heirs receive the entire property. That happened a few years ago in Berkeley, Calif. Joint-tenant property owners Larry and his girlfriend Lana were on an evening walk. A drive-by shooter's bullets hit both Larry and Lana.

They were rushed to a nearby hospital where Lana died at 2:58 a.m. Larry was kept alive on a ventilator until 4:55 a.m. when he died. Because Larry survived Lana, he was the surviving joint tenant of their properties. His heirs inherited all the joint-tenancy property under his will and Lana's relatives received nothing because she was not the surviving joint tenant.

Although holding title as joint tenants (or tenancy by the entireties between husband and wife where allowed) offers many benefits, it also provides possible disadvantages. Other co-ownership alternatives to be considered include tenants in common and revocable living trusts. Consultation with your attorney and tax adviser is recommended.

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