Posts Tagged ‘Intero Insider’

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Intero Insider: To Forgive Or Not To Forgive? That Is The Question.

By Gino Blefari | March 10th, 2010 0 Comments

Even in a “normal” year (when someone actually finds one of those, please tell me), I am bombarded each spring with questions about real estate transactions and their implications on Federal and State income taxes.

In a year in which we’re experiencing continued economic hardships, and since many of those hardships relate directly to home sales and foreclosures, I’m getting far more than usual.

Right out of the blocks, I tell them that I’m not a tax professional and that any questions that they have ought to be directed to their accountants and financial advisors. That said, I like to do all I can to help folks out, so I answer questions where I am able.

One of the most frequent questions I hear — and the one whose answer seems somewhat out of reach — pertains to short sales.

“I sold my house this year, but it was a short sale. Can the IRS or my state tax the forgiven debt?”

The answer is, “Yes. Yes, they can.” A better question is, “Will they?”

With regard to the Federal Government, the answer is “no”. In a move meant to encourage homeowners to work out alternatives to foreclosure, the Federal Government has placed a moratorium on the taxation of forgiven mortgage debt through 2012.

Many states have followed suit, but there are a great many who have not. One of the states in which the question has yet to be answered is California, a state that has been hit harder than most in this period of crisis, and also one whose economic woes far exceed that of any other.

While it may sound unfair, forgiven debt has always been treated as income and, until the Mortgage Forgiveness Debt Relief Act of 2007 was enacted, that income could (and would) be taxable.

At the time of this writing, Governor Schwarzenegger had not made a decision with regard to the state collecting taxes on forgiven debts, but in a state that is as cash-starved as California, there is a strong possibility that he’ll have no choice but to do so.

If you sold your home last year and that sale was a short sale, there are heady tax implications attached to it. It is imperative that you consult with your accountant or financial advisor, so that you can adequately prepare to meet the tax man, should he come a’calling.

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Bringing A Little Clarity To The Mortgage Business

By Gino Blefari | January 20th, 2010 0 Comments

Since the dawn of time (or at least since financial institutions have been issuing mortgages to consumers), a shroud of confusion has lain over the process. Questionable fees, questions that don’t really have concrete answers, “best guesses”, and a morass of paperwork have been the norm in a business that ought to have been crystal clear.

As of January 1, 2010, much of that changed.

Under the Real Estate Settlement Procedures Act (RESPA), HUD has instituted rules and regulations that require all lenders to use standardized, simple-to-understand good-faith estimate forms. In addition, closing agents are now required to use settlement statements that show — in black and white — any differences between original estimates and actual costs.

I say that it’s about time.

One of the major problems leading to the mortgage crisis that began in late 2007 and which continues today was the fact that many borrowers didn’t fully understand the terms of a mortgage. Now with standardized good-faith estimate forms, which are easy to understand, are being used with all lenders and allow people to compare loans and legitimately shop around for the best deal.

When you ask, “How much does this loan cost?” someone should be able to answer the question. It’s a question to which there should be a concrete answer. Now, most fees cannot increase from the time of the original estimate. Those that can cannot, increase more than 10%. Any increases over and above these levels will have to be covered by the lender. No ifs, ands or buts.

The new forms don’t fix everything, of course.

One thing that the new good-faith estimate does not show consumers is what their monthly payments will be under the terms of a mortgage, nor the funds that they need to bring with them to settlement. It is imperative that buyers have this information, so that they can effectively prepare for what lies ahead.

If you’re thinking of shopping for a mortgage this year — and there are certainly many, many reasons to do so — be sure to talk to your Intero Mortgage lender, your tax advisor or your Intero agent, so that any and all questions you may have are answered before you get to the settlement table. The good-faith estimate forms may have made it easier to compare mortgages, yet within our economy the lending criteria has become more strict and harder to decipher. Now it’s more important than ever, to not only choose a competitive lender, but choose the lender you have the utmost confidence and trust in.

Be informed yet be well guided.

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Intero Insider: What’s In Store In 2010?

By Gino Blefari | January 13th, 2010 0 Comments

After two solid years of unmitigated distress in the real estate market, 2009 gave us some positive signs that we’ve seen the worst of it and that, while it’ll be slow, recovery has started. It was the year in which prices seem to have hit bottom and began to stabilize.

But what’s coming in 2010?

One of the biggest stories of 2009 was the Federal home buyer’s tax credit. The credit likely spurred the real estate market along, as buyers were anxious to take advantage of it. But the credit’s been expanded, and it now has a benefit to current homebuyers, should they choose to move up to a higher-priced home. With many of those homes at prices that are, comparatively, very low, 2010 could be just the time to make the move.

2010 could well show marked improvements as people clamor to take advantage of the credit before it expires in the Spring. Though small increases have been seen in mortgage interest rates, they are still at historically low levels. There is wide speculation, however, that these rates are nearing their end. With heightened demand from buyers and housing inventory on the decline, 2010 could very well be THE time to buy.

There could be great news for sellers, as well. While it’s not likely that we’ll ever return to the feverish seller’s market of 2005 & 2006, increased buyer demand will likely help to ease the losses that many sellers have taken in the past couple of years. It’s probable that many neighborhoods will start to see some increases in their prices. These gains will be more reflective of actual worth — numbers based in reality — as opposed to the artificially-created sales figures of the early 2000s.

It’s important to note that, as a nation, we’re not out of the woods just yet. But the end of 2009 gave us many signs that its edge is near. At Intero, we look forward to making the journey toward recovery with you.

Happy New Year, and the best to you in 2010.

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Intero Insider: Sweeping Changes Coming to the HVCC

By Gino Blefari | December 23rd, 2009 0 Comments

While we’ve all been focused on the Homebuyer Tax Credit and the effect that foreclosures have had on the real estate market, Congress has been hard at work, trying to right some unintended wrongs.

For some time now, the home buying process, already strained by the desperate straits of our nation’s economy, has been made more difficult than necessary as a result of unofficial “rules” put in place by Fannie Mae & Freddie Mac. These “rules”, known as the Home Valuation Code of Conduct, were put in place to reduce abuse by appraisers, who’d been under pressure from lenders, real estate professionals, sellers … you name it, to make sure that a particular house appraised for a certain amount (whether that amount had any basis in reality or not).

But while paved with good intentions, the HVCC’s road was littered with potholes.

The HVCC put the onus on lenders to order appraisals. It also required that lenders stay out of the process; that they not exert any influence over the appraisal. This has led to the use of appraisal management companies, which, for lack of a better description, are like brokers for individual appraisers. The AMC (appraisal management companies) gets an order for an appraiser, then assigns someone to take care of the job. The big problems here are that, more often than not, appraisers are being assigned to value homes in communities and neighborhoods with which they are wholly unfamiliar. Also, the use of the management companies requires the splitting of appraisal fees, causing appraisers to cut their rates and putting many experienced appraisers out of business.

Complaints about the HVCC have run the gamut from inaccuracy in valuation, “lowball” appraisals, to inexperienced appraisers (not to mention a host of other complaints). As a result, many sales have been adversely affected.

It looks like that may be about to change.

The US House of Representatives has been hard at work on its financial and mortgage industry reform bill. It has voted to terminate use of the HVCC, pending the initiation of a new Consumer Financial Protection Agency. The House’s bill, now on its way to the Senate, requires the director of this agency to implement national sales rules and standards that will cover all transactions.

Once the new standards are in place, Fannie Mae & Freddie Mac will be barred from using their much-maligned rules.

How the Senate will handle the creation of this new agency (if it goes along with it at all) remains to be seen, but the House bill is a clear signal that the HVCC is all but dead in the water.

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Intero Insider: Bringing the American Dream Home With 203k Loans

By Gino Blefari | December 16th, 2009 0 Comments

The American Dream. Own a home. Provide for your family. Be part of a community. These are things that each of us want. For many, however, achieving that dream has become harder over the past couple of years.

There are lots of homes for sale. There are lots of homes that are priced incredibly well. More and more of these homes, however, are in desperate need of repair and renovation. Whether the result of age and general neglect, or whether the homes have been gutted by previous owners, the result is the same: the cost of renovations almost immediately puts the reasonably-priced home suddenly out of reach.

But there is a solution: the FHA 203k mortgage loan.

The 203k mortgage offers all of the great benefits of FHA financing, but also covers the costs of renovation. Imagine! The possibilities have tremendous implications for homeowners and their sense of pride, not to mention the benefits to our nation’s economy.

Intero is committed to helping rebuild The American Dream. Intero is committed to rebuilding communities. We’re committed to helping create jobs. We’re committed to YOU.

The financial crisis with which our country is dealing has left many homes distressed. These homes often stand empty, causing neighborhoods and communities to degenerate. The 203k mortgage loan gives homebuyers the opportunity to buy these homes and take advantages of their remarkably low prices, and then pour into them the TLC that they so desperately need. Through this program, they’ll infuse new life into these neighborhoods. They’ll stimulate the economy. And they’ll achieve pride in ownership.

With RE-buildUSA, a program designed to raise consumer awareness and help Americans enjoy the benefits of this incredible opportunity and Lowe’s home improvement centers, we will be able to educate consumers about possibilities that are out there.

Each of our real estate professionals is going through training to become certified 203k mortgage specialists. We will be the experts. As is our goal in everything, we will be mounting the charge head-on to help RE-build our nation’s economy, one homeowner at a time.

The American Dream. It’s out there. With Intero & the 203k mortgage loan, you can achieve it.

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2010 market forecast: The long recovery continues

By Gino Blefari | November 24th, 2009 0 Comments

After three years of pain, the housing market appears to at last be on the mend.

The California Association of Realtors is projecting a median price increase of 3.3% in 2010. This would have looked anemic just a few years ago, but comes as welcome news to homeowners who have watched their finances – and, in many cases, their lives – turned upside down by collapsing values.

The National Association of Realtors predicts the number of home sales to increase by 13.6% percent in 2010 – fueled, in part, by a rosy forecast for interest rates, which the association sees remaining low through 2010.

At Intero, our view of the Northern California market is not much different. We expect to see continued vitality in the first-time homebuyer market, which accounts for nearly half of all volume. The expansion and extension of the homebuyer tax credit combined with an extremely favorable interest rate environment will see to that.

Vital signs improve in the move-up market

But the key to any housing recovery over my more than three decades in this business has been the “move-up market.” Until those who sell to all those first time buyers in turn move up, the market remains tepid. In 2009, we saw few signs of improvement here due to the huge number of bank owned properties. These properties are not owned by people who move up – they are owned by institutions purging bad assets. You see the problem.

While we do not see this changing dramatically in 2010, we do expect the move-up market (and, in time, the luxury market) to show signs of life for three reasons:

  1. The expansion of the home buyer tax credit beyond first-timers
  2. The middle and upper segments of the market offer prices that are still dramatically lower then their 2005 highs (as opposed to the entry-level market, where prices have already risen from their bottom and multiple-offer scenarios are now commonplace)
  3. The relative strength of the tech sector in Northern California will continue to increase as the economy recovers, fueling demand in the upper strata of the market

Are happy days here again?

Surely, things are looking better heading into 2010 than they have in a long time. While the twin specters of unemployment and foreclosure will continue to exact a toll, it will be less severe. We are moving to a normal market.

But here is my caveat: Normal is not what we experienced in the 2001-2005 bubble. Do not expect credit to become as easy to obtain as it was (and may some of the more “creative” loan products from those days rest in peace!) and do not expect home values to snowball at reality-defying rates.

Those days are gone, at least for now.

But if you want to find a place to live at a reasonable price, if you seek to sell into a market with a strengthening level of demand, and if you believe in the undeniable value of real estate as a long-term investment … well, 2010 may just be your year.

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Intero Insider: The (Not Just) First-Time Homebuyer Tax Credit, Expanded & Explained

By Gino Blefari | November 12th, 2009 0 Comments

After much speculation by the general populace (and the real estate industry) and much consternation by Congress, the much-anticipated extension of the First-Time Homebuyer Tax Credit has been passed.

Passed, not to mention greatly expanded.

Whether you’re in favor of or opposed to the credit, it’s now been made available to a host of Americans not included in the initial offering, so how can you take advantage of it? Let’s break it down, shall we?

The original tax credit, which was a part of the economic stimulus package put into effect in February 2009, was made available to first-time homebuyers (people who hadn’t owned a home for three or more years) and applied to home purchases that closed on or before November 30, 2009. With the passage of the expansion bill into law, that credit has been extended to purchases made by May 1, 2010 and that are closed prior to July 1, 2010 (that means escrow is closed, all papers signed and keys are in-hand on or before June 30th).

For first-time homebuyers, the credit amount, as it was in the original plan, remains at 10% of the purchase price, up to a maximum credit of $8,000. Originally, to be eligible for the credit, single (not married) purchasers could have an adjusted gross income (AGI) of no more than $75,000/year; married couples with an AGI of $150,000 or less were eligible. Under the new plan, singles with an AGI of up to $125,000 and married couples with an AGI of up to $225,000 are eligible.

For those of you who had previously been ineligible to claim the credit at all because you already owned a home, there may be good news for you. Under the new plan, homeowners who have lived in their homes for 5 consecutive years of the past 8 years are eligible to receive a credit toward a new home purchase. Meant to give a boost to “move-up” buyers, this credit amount can be 10% of the purchase price, up to $6,500. The income caps referenced above are the same.

If you’re a member of the Armed Services and were/will be deployed outside the United States for at least 90 days between December 31, 2008 – May 1, 2010, you may claim the credit until May 1, 2011 (with settlement all wrapped up before July 1, 2011).

One peculiarity of which it’s important to take note: even if you purchase a new home in 2010, you can claim the credit on your 2009 tax return. If you file for an extension of time to file your income taxes, or if you amend your already-filed 2009 tax return, you may include the tax credit (this would put the cash in your pocket much sooner than if you were to claim the credit on your 2010 tax return). Be sure, however, to take heed of the income limitations, as they apply to the year in which you claim the credit.

Finally, it’s important that you understand that if the purchase price of the home exceeds $800,000, no tax credit may be claimed, regardless of your income levels. The credit only applies to primary residences. Investment properties or vacation homes don’t qualify.

Whether the expansion and extension of this credit is the shot in the arm that the US Economy needs remains to be seen, but it’s here, it’s ready and, if you’re planning on purchasing a new home, you should most certainly take advantage of it. Talk to your Intero agent or consult your financial advisor to discuss how this affects YOU.

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The First-Time Homebuyer Tax Credit is Likely to be Extended

By Gino Blefari | November 4th, 2009 0 Comments

Of late, all the buzz in the real estate industry — and in much of the overall news, in fact — has been about the First-Time Homebuyer Tax Credit. Credited (no pun intended) with giving the national real estate market a much-needed shot in the arm, the credit is scheduled, at the time of this writing, to go to a vote before Congress in the next few hours, and is likely to be not just extended, but expanded to benefit some current homeowners, as well.

There’s no question that the national economy is in a time of crisis. There’s no question that the real estate industry lies near the very heart of that crisis, and we all want to see its recovery.

A large part of the Federal Government’s economic stimulus package, the FTHTC is set to expire at the end of this month. Any real estate transaction that closes prior to midnight on November 30th, and whose buyers are first-time (meaning that they haven’t owned a home in 3 or more years) buyers, qualifies to receive an $8000 tax credit.

Certainly, many buyers have taken advantage of it (they would have been crazy not to).

Now, the government is set to vote on an expansion of the tax credit. The credit would not just be extended into next year, its terms would extend to homeowners who’ve been in their homes for five or more years (provided that they would be moving “up”), and would apply to buyers with higher incomes.

There are two other superstars playing roles in the real estate market right now: record-low interest rates and low, low, low home prices. Those two characters alone carry a huge amount of influence (as well they should) and should be the things motivating buyers — both new and experienced — to buy homes.

An extension of the Credit will no doubt magnify the impact of these forces.

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The Intero Insider: California Cracks Down on Mortgage Malfeasance

By Gino Blefari | October 21st, 2009 0 Comments

A little over a week ago, Governor Schwarzenegger signed several bills into law that are designed to protect homeowners and to get tough on abusive lending practices.

The new legislation is designed to bolster California’s reverse mortgage laws, giving seniors greater protections when considering such financing options, making it a felony to commit fraud in conjunction with any mortgage application, as well as to promote forthrightness, responsibility and accountability in the real estate market.

“Fraudulent mortgage practices have become more prevalent as a result of the national foreclosure crisis that negatively impacted California’s housing market and economy,” said Governor Schwarzenegger. “This legislation helps crack down on abusive lending practices by giving law enforcement the tools to effectively investigate mortgage fraud crimes and provides Californians with greater consumer protections to promote homeownership in a safe and accountable environment.”

Specifically, the bills signed into law on October 11, 2009 are:

  • AB260, by Assemblyman Ted Lieu, D-Torrance, will enact the Higher-Priced Mortgage Loan Law, which would codify a fiduciary duty for mortgage brokers, authorize California’s mortgage regulators to apply specified federal mortgage lending laws and regulations to their licensees and cap prepayment penalties and yield spread premiums on higher-priced loans
  • SB36, by Sen. Ron Calderon, D-Montebello, which will establish licensing requirements for all individual loan originators who offer or negotiate residential mortgages.
  • SB239, by Sen. Fran Pavley, D-Santa Monica, which makes it a felony to commit fraud in connection with a mortgage application. This bill makes individuals who engage in mortgage fraud guilty of a public offense punishable by imprisonment in the state prison or in a county jail for up to one year. The bill also provides law enforcement with the necessary tools to make it easier to obtain a search warrant to real estate records and documents believed to contain evidence of mortgage fraud.
  • AB329, by Assemblyman Mike Feuer, D-Los Angeles, which establishes the Reverse Mortgage Elder Protection Act of 2009 to provide senior homeowners with greater consumer protections to ensure that they are fully informed about the consequences of entering into a reverse mortgage agreement. Specifically, the bill requires lenders to provide prospective borrowers with a clear and informative written disclosure statement and a written checklist pertaining to the risks and suitability of a reverse mortgage, prior to the borrowers attending loan counseling.
  • SB237, by Sen. Ron Calderon, D-Montebello, which creates a registration program for appraisal management companies and prohibits any person or entity from acting in the capacity of an appraisal management company without first obtaining a certificate for registration from the Office of Real Estate Appraisers.
  • AB957, by Assemblywoman Cathleen Galgiani, D-Livingston, which mandates that buyers of foreclosed homes would have the choice of using a local escrow office to handle the transaction. It also prohibits a seller of residential property from requiring the buyer to use an escrow company or purchase title insurance chosen by the seller and would also prohibit a seller or residential property from, without good cause, disapproving the use of a title or escrow company chosen by the buyer.
  • AB1160, by Assemblyman Paul Fong, D-Cupertino, which requires mortgage loan documents to be translated into the language in which the verbal negotiations were conducted. Mortgage documents would be translated into Spanish, Chinese, Tagalong, Korean and Vietnamese languages.

What all of this means for buyers — and sellers, for that matter — of real property in California is that while there are now more protections than ever, constant vigilance is always in order. No matter what sort of pressure you might feel, take all the time you need to understand what you’re signing. Cross every t, dot every i. You have lots of rights and protections, but they won’t necessarily help you if you aren’t aware of them.

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The Intero Insider: Being part of something bigger than ourselves

By Gino Blefari | October 14th, 2009 0 Comments

InteroFoundationLogoI try to keep the Intero Insider focused on you, the consumer. But today I want to share something that we do here at Intero that I am especially proud of.

And, when you think about it, this really is about you too.

I’m talking about the Intero Foundation.

Let me explain.

When we founded Intero just seven years ago, we set out to create a company that was different. That difference would be based on our values. One of those values is commitment – defined as; a pledge to do something, a state of being bound intellectually to a course of action.

As Realtors we earn our living by serving our community. So it was fundamental when creating Intero to figure out a way to give back to the community. We express this commitment now through the Intero Foundation.

To date, the Intero Foundation has donated $1,367,365 to local charities. These organizations range in size and mission, but all work to positively impact the growth and well being of children by enhancing their education and personal development.

Just last week, we announced our most recent list of beneficiaries, we were able to give out over $100,000 in one week divided amongst these organizations which work to make our children – and our communities — stronger: Dream Power Horsemanship, Rape Trauma Services, Family Connections, My New Red Shoes, Jacob’s Heart, Bill Wilson Center (SSJFY), Small Steps Foundation, Community Solutions, and the Learning & Loving Education Center.

To give you an idea of all the non-profits we’ve been able to contribute to since the foundation’s existence – here is our long list:

A Brighter Today Foundation, Alum Rock CounselingCenter, Assistance League of San Jose, Assistance League of Saratoga, Barrett Elementary School, Barrett Home School & Community Club, Bay Area Alliance for Youth Family Svcs, Bay Area Crisis Nursery, Bill Wilson Center (SSJFY), Buena Vista Auxiliary, Buenas Vidas Youth Ranch, Burnett Elementary School, Burton Elementary School, CampHope, CampTaylor, Carlmont Motivational Center, Children’s Hospital Branches, Community School of Arts, Community Solutions, Concord Youth Center, Cross Cultural Community Service Center, Cupertino Community Services, Dan Herbert CampHope, Diablo Valley Assistance League, Discovery Counseling Center, Discovery Counseling Center SCIP Program, Downs Syndrome Connection, Estrella Family Services, Family Connections, Family Giving Tree, Franklin McKinley Education Foundation, Friends Together, Future Families, Future Vision Mentoring, Generations in Jazz, Hellyer Elementary, Housing Industry Foundation, Interfaith Council of Contra Costa County, JW House, Learning for Life, Let Them Hear Foundation, Lincoln High School, Los Paseos Elementary School, Montalvo Arts Center, NAMI Contra Costa, National Alliance of the Mentally Ill, One Step Closer, Open Heart Kitchen, Organization of Special Needs Families, PACE, Partners for New Generations, Project Help, Quilt Museum, Rape Trauma Center, Rebekah Children’s Services, Role Model Program, San Francisco 49ers Academy, San Jose Education Foundation, Schmahl Science Workshop, Shelter Inc. of Contra Costa County, Silicon Valley Education Fund, Silvar-Charitable Foundation Trust, Small Steps, Social Advocates for Youth, Special Olympics, St. Rose Hospital Foundation, St. Joseph Family Center, Starting Point Arts, Super Stars Literacy Program, The Salvation Army, The Wellness Community, The Wish Book, Upward Bound Youth, US Relief for Unicef, Via Services, Westwind Riding Institute.

Each of us at Intero is proud to support these organizations.

So why does this matter to you? Well, there is an obvious connection: We are helping to make the place you call home (or are hoping to call home) better. And that matters.

But we are also expressing something about ourselves that might interest you: That we are a big organization, but not too big to remember that we are part of something still larger; that we take seriously our role as an organization rooted in a place; that we believe we must give in order to receive.

If you share these beliefs, if it matters to you what your real estate company does in the wider world, then we have created something for all of us.


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