Forgiveness Debt Relief

What Happens When The Mortgage Forgiveness Debt Relief Act Expires?

There are many ways to answer the question: what happens when the mortgage forgiveness debt relief act expires. In this post we are going to cover what happens with respect to the taxes you owe on your property should you sell your home through a short sale.
In the past, before the Mortgage Forgiveness Debt Relief Act was implemented by the US government several years ago, if you paid your mortgage company less than what was owed on it and they released their lien they could issue you a 1099 (income statement). With receipt of the 1099, you would owe self employment income taxes on that money such that it would amount to somewhere around 30%. So if you owed your mortgage company $250K and you paid them $200K you would owe them 30% of $50 which would be around $15K.
For many people this would create some serious financial hardship. So, during this tough economic times, the US government passed the Mortgage Forgiveness Debt Relief Act which provides for many homeowners to have this income be forgiven as a form of income even though the mortgage company issues a 1099. This provision/protection for homeowners is expected to run out at the end of 2012.
If you have considered a short sale in the past you may want to reconsider your options if you see a short term need to sell your home within the next few years. This is especially the case if your real estate market is depressed enough that it is unlikely that your home’s value will rebound to a point where you can sell your home for more than what you owe on it.
If you have questions about your options you should talk to someone who specializes in short sales and loan modifications. One such company is Anew Home Loan Services & Mortgage Mediation Group. We handle loan modifications and short sale consultations from the perspective of protecting the homeowner from future deficiency actions from the departing mortgage company.
What this brings to mind is that if you are a homeowner thinking about a loan modification or short sale you need to know what your options are. You will have different outcomes depending on which option you take: short sale, loan modification, bankruptcy or foreclosure. Don’t trust what a real estate agent says, or a mortgage loan officer. The only real advice there is to follow is an experienced real estate sspecialist.

How does the streamlined loan modification program for Fannie Mae and Freddie Mac work?

How does the streamlined loan modification program for Fannie Mae and Freddie Mac work?  This new mortgage bailout program will be set to begin on December 15, 2008.  It will apply only to mortgages that are owned or guaranteed by Freddie Mac or Fannie Mae.  A borrower who is 90 days delinquent will be eligible for a new mortgage with a monthly payment that does not exceed 38% of their gross monthly income.  Proof of a hardship will need to be justified, jobless or illness etc.  If you are not experiencing a loan default you will not be eligible for this mortgage bailout program.  You do not need to be in a bankruptcy proceeding.  This program is only available to primary residences.  Second homes and investment property will not qualify for this program.

If you are interested in a loan modification please call toll free 1-800-385-0502 for a new hassle loan modification review.

Our company has some of the best debt negotiators and credit information specialists in the business.

• Our company has some of the best debt negotiators and credit information specialists in the business.
• We have programs that will have you be debt free in 12-48 months.
• We can negotiate your debt balances down 40-60% of what you owe, including all fees.
• Debt Negotiation has no negative impact on your credit score.
• We will help stop creditor harassment.
• Debt Negotiation and Debt Settlement are not for everyone. If you qualify for our program we will design a debt free plan that is best for you and your family.

Once you have been accepted into the program, your life will get a lot simpler. You only need to set aside an affordable amount of money each month to save up and pay off your creditors. Your money will go into a savings account that you control. We will be available to answer your questions, deal with creditor calls, concerns, negotiations, monthly statements and administrative issues.
So before you get too involved with a bankruptcy attorney, give us a chance to alleviate your financial burden. Our program may be the solution you've been looking for.
Call toll free 1-800-385-0502 for a free no hassle debt review

Debt Consolidation Program is the best Option!!!

Debt Consolidation Program The Best Option?

Choosing to sign up for a debt consolidation program is certainly one option to get out of credit card debt. But is this the best and only option that you may have? The solutions that are out there seem to stem from whether you are a home owner or not. We will review the options for both.
Options To Get Out Of Debt As A Home Owner
The first option to look at if you are a home owner is doing a cash out refinance. Paying off credit card debt with your home’s equity will in most cases give you a lower rate and a much lower payment. Credit cards work off of simple interest calculations and mortgages are amortized usually over a 30 year period. A credit card balance of $30,000 may give you a payment of over $1200. However, if you were able to move that balance into your mortgage, your new payment would be just under $200 when calculated on an amortized basis.
Refinancing Your Mortgage To Payoff Debt – Advantages
Refinancing your home mortgage to payoff credit card debt can have huge advantages for you. The first advantage is that you can probably now write off the interest you were paying on the credit cards in the form of the mortgage interest tax write off allowed by the IRS. Second, with a lower payment comes stress relief. Can you imagine having an extra few hundred dollars in your bank account at the end of the month?
Potential Disadvantages Of Refinancing To Pay Down Debt
I am only an advocate of transferring unsecured debt to secured debt – like a mortgage or auto loan – if you have the discipline to not go out and repeat the past. Wiping your credit cards clean is great but if you act on the temptation to use them again, you may end up in worse shape. You may end of with no equity and no emergency backup plan.
Refinancing your mortgage will have closing costs which could cost you a couple of thousand dollars. You will also be starting over with a new thirty year term.
The Home Equity Loan Option To Get Out Of Debt
The other option with your home would be to add a home equity loan or a second mortgage. Typically a home equity loan will have no costs associated with getting it started. It also gives you flexibility in getting access to the cash in your home. But with most home equity loans being interest only you will need to make extra payments above the minimum payment to pay off your debt.
Similar to a straight cash-out refinance of your first mortgage as I mentioned in the previous section, the mortgage interest is a possible tax write off on your tax returns. For both tax write off possibilities you will need to consult with a tax adviser to see if and how you can write off your mortgage interest.
There is one drawback to consider if you roll your credit card debt into your mortgage. What happens if you get into trouble and cannot make the extra payment? In the case of it being your mortgage, you can lose your home to a foreclosure. But if it is with your credit cards, the collectors cannot take your home, nor are they likely to take the stuff back that you bought. So be careful of moving unsecured debt to a new mortgage.
Options If You Do Not Own A Home To Get Out Of Debt
Unfortunately, the opportunities for getting out of debt by leveraging your home’s equity just aren’t there for you if you do not own a home. However, there are still some viable options that might work if you do not want to go into a debt consolidation program.
Get A Lower Interest Rate On Your Car Loan
One way to pay off debt is to rearrange where you are paying your debt. Often, car loans can be refinanced to lower the payment due on the loan. Most people do not think about lowering their monthly bill payments with a refinance of the car loan.
You can go online and search car loan companies to see if you can get a better interest rate. Getting a better rate on your car loan can free up $100 or more. Give yourself a raise without working any harder. I would start my search for lower car rates on Google and see what you come up with.
Credit Card Companies Lower Their Interest Rates – Just Ask
Another way to lower your monthly bill payments is to get your credit card interest rates lowered. Amazing as it sounds, this may be one of the easiest things you can do to make headway at getting out of debt. Just pick up the phone and see if you can negotiate better rates with your credit card companies.
The key to remember is: that they do not want to loose you as a customer. You may have to play hard ball with them and threaten that you will move to a company that is offering you a lower interest rate. If you have been with them for a longtime they do not want to loose you.
Switch to Lower Interest Credit Cards
If your credit card company will not lower your interest rate switch to another credit card with a lower interest rate. Make sure that you keep the date handy for the introductory period if you do get a 0% balance transfer. If you go over this time period, your payments will go up.
Also, if you do payoff an older credit card do not close your account. Closing this account could hurt your credit scores considerably.
For more information about credit scores see GetPreQualified.com’s article on tips for raising your credit scores: things your creditors do not want you to know.

Zero Cost Mortgage Loans Are they really the best???

Zero Cost Mortgages – No Cost Mortgage – Are They Good?

Zero Cost Mortgages, also known as the No Cost Mortgage seems to be making a comeback because mortgage rates are so low. With rates making the zero cost mortgage more attractive, GetPreQualified decided we should spell things out again regarding these mortgages – the real deal about no cost mortgages so to speak.
If you are thinking that there is a mortgage program out there that doesn’t cost you anything it is time to correct your way of thinking. All mortgages have costs – underwriters, loan officers, processors, appraisers, title companies, attorneys, county recorders, and in some cases even insurance companies all seem to have their hand the mortgage loan cookie jar when it comes to getting paid.
In a typical mortgage scenario, all of these folks get paid their cut through what is called your "closing costs". With a purchase mortgage you are either having to pay this money out of your pocket along with your down payment, or you are getting the seller to assist you through the sales contract that you negotiated. In a refinance loan scenario, you are paying these costs out of your home’s equity (the new loan amount is made of up of what you owe on your old mortgage plus your closing costs) with the new mortgage or you are going to have to pay them through bringing money to your loan closing.
However, in a zero cost – no closing cost – mortgage scenario, you agree to take a slightly higher interest rate for your mortgage which translates into cash upfront to pay your closing costs. In this way, you don’t have to add to your mortgage balance (a good thing in the case where you don’t have any more equity to give because your home has lost value) to get a new mortgage – nor do you have to take money out of your pocket to get your new mortgage. Instead you will pay a slightly higher mortgage payment each month because you elected to take a higher interest rate that what you could have paid if you had the equity in your home and used it to pay your closing costs or if you had taken the money out of the bank.

Zero Cost Mortgage – Compare Different Offers

The no closing cost mortgage isn’t a bad program, but you do have to understand what you are getting. You also have to be careful and compare several loan closing cost scenarios from different mortgage companies. You could end up paying too high of an interest rate than necessary. During the mortgage and real estate hay day of 2005 and 2006 mortgage loan officers were charging interest rate markups in some cases equivalent to 4-5 points in upfront fees – which left the homeowner holding the bag with a higher than necessary mortgage payment.
There is a break even point of something like 5 years where it makes sense to have this program in place, but after that initial period, the loan is now costing you more than normal closing costs because the interest rate is stuck where it is so your mortgage payment stays at a higher amount. Take a good look at what makes most sense – pay now or pay later.
Bottom line – use this program wisely – but the zero cost mortgage does serve a very nice purpose when not abused the parties involved.

Getting The Right Price For The Home You Want To Buy

Buying a home in today’s 2011 real estate market brings uncertainty and excitement. Mostly the uncertainty stems from questions about the stability of home values. Are home values still going down, are they stable, or are they going up? The excitement stems super low va rates, FHA rates and conventional mortgage rates which can set up a scenario where a mortgage payment can be less than a rent payment. And, ultimately what’s behind both of these is the economy.
We don’t have enough time, and certainly we don’t want to get into a debate about how to fix it in this particular article. Rather we’re going to look at few points to consider should you decide to purchase a home that can help you offer a competitive price.
First of all, play poker with the seller. Don’t layout your cards like you can afford more than what you are offering for the home. If you get a pre-approval letter from your lender, make sure that if you qualify for more than the home price that the letter sets your approval at or near the offer price of the home. If you can buy more the seller is more likely to hold a higher price for acceptance.
Second, use a buyer’s agent. If you can avoid it, try not to use the listing agent directly to negotiate with home seller. Listing agents are hired by the seller to sell their home. They are in a position to get paid a higher commission if they sell the home at a higher price. A buyer’s agent can help you negotiate in a way that better represents your buying position – however keep in mind – buyer’s agents get paid based on the sales price too. With this being the case, keep your financing limits between you and the lender if you can help it.
Third, get a copy of the title history on the property you want to purchase. You can tell what kind of money the seller owes on the home which can give you a sense of what sales price they might accept. The title history won’t tell the whole story, especially if the seller owes some unrecorded private debt say for example like a down payment loan from a parent or relative that was kept off the books. Along with what’s owed on the home to a mortgage company and other lien holders like the IRS for back taxes, keep in mind the real estate commissions. Real estate commissions come from the seller of the home, so there needs to be room in the deal to pay both the listing and the buyer agent.
These are just three quick tips to help you with your home buying process. There are plenty more, you can view more here at: the steps to buying a home.