Turning foreclosures into rentals
NEW YORK (CNNMoney) -- Federal officials hope to launch a pilot program in early 2012 to convert government-owned foreclosures into rental properties.
The program, which was cited by Federal Reserve Chairman Ben Bernanke last week as one way to address the housing crisis, would sell foreclosed homes now owned by Fannie Mae (FNMA, Fortune 500) and Freddie Mac (FMCC, Fortune 500) to investors in bulk. The properties would then be converted into rentals.
The initiative began back in August, when the Federal Housing Finance Agency, the Treasury Department and the U.S. Department of Housing and Urban Development announced they were seeking suggestions on ways to dispose of repossessed homes now owned by Fannie Mae, Freddie Mac and the Federal Housing Administration.
In addition to getting the properties off the government's books, officials are hoping putting the homes back into productive use will stabilize neighborhoods and housing values. Also, it is looking to expand the supply of rentals, which are increasingly in demand.
The agency is not releasing details on how the rental program would work, instead saying it is "proceeding prudently but with a sense of urgency to lay the groundwork for the development of good initial transactions in early 2012."
Converting these homes to rentals can both help the neighborhood and minimize losses to Fannie, Freddie and the FHA, which hold about 250,000 properties, Bernanke told lawmakers last week.
He urged lawmakers to ramp up their efforts to fix the housing market, placing particular emphasis on the problem of vacant homes on the market.
"Restoring the health of the housing market is a necessary part of a broader strategy for economic recovery," he said. Bernanke's comments launched a full-court press by Federal Reserve officials last week to raise awareness of the continuing problems plaguing the housing market. His proposals were quickly followed by Fed Governors Sarah Bloom Raskin, who spoke on ramping up enforcement of mortgage servicers, and Elizabeth Duke, who said Fannie Mae and Freddie Mac could do more to help heal the housing market.
Meanwhile, New York Fed President William Dudley gave a speech that touched on a wide range of housing policies -- including principal reduction and mortgage refinancing -- that he believes will boost the economy.
The Fed has already tried to boost real estate sales by pushing mortgage rates down to record lows through massive bond-buying programs.
But the renewed push for housing help indicates that the Fed, which has basically run out of monetary policy ammunition to revive the real estate market, is urging the federal government to ramp up its efforts.
"The Federal Reserve is signaling in even stronger terms the need for the government to do more to help housing," said Jaret Seiberg, a policy analyst with the Washington Research GroupAdministration officials said they are continuing to work with the agency to develop the program.
Housing, stocks, gold and oil: Hot or not in 2012?
Until now, most foreclosed homes have been sold individually because investors have demanded bigger discounts to buy large numbers of properties.
But federal officials are warily eyeing the expected surge in foreclosures as banks ramp up their action against delinquent homeowners. The process had been stalled since late 2010 when banks' shoddy paperwork practices came to light.
There are close to 2 million homes in the late stages of delinquency, according to Lender Processing Services. Since foreclosed properties often sell below market value, they can wreak havoc on home prices.
Tuesday, January 17, 2012
Great Time to Buy a Home in the New Year!!! Fabulous article found on Quickenloans.com's Blog
Top 5 Reasons to Buy a Home in 2012
by Jonathan Slappey on January 6, 2012 in Home Buying
The American dream of homeownership is a very feasible aspiration for 2012.
There are many benefits of owning a home. Yet some first-time buyers are skeptical of purchasing with the uncertainty surrounding the housing market.
The uncertainty many reference when speaking about the housing market involves a specific date when home values will increase. Since no one can pinpoint this date, the word uncertainty (when paired with the housing market) often reveals a negative connotation.
There are some factors we can be certain about in this housing market such as home values rebounding. This is true; the housing market often moves in cycles.
It’s safe to assume that many Americans harbored the same uncertainty during the George H. W. Bush administration in the early 1990s when the national homeownership rate fell from its previous historic high of 64.4 percent in 1980 to a low of 64.1 percent in 1991.
In the 1960s Lyndon Johnson illustrated a correlation between homeownership and accountability by stating “owning a home can increase responsibility and stake out a man’s place in his community…The man who owns a home has something to be proud of and reason to protect and preserve it."
This statement is still true more than 50 years later. There are many reasons to take pride in homeownership such as:
•Appreciation – Buying a home now (at the current rates) can almost ensure your home’s appreciation in the future. Mortgage rates are near historic lows and home prices in many parts of the country are down. This is the perfect recipe for home appreciation. Additionally, many foreclosed homes are available for a fraction of the original cost. This can translate to a higher profit if you decide to sell once the market rebounds.
•Property Tax Deductions – For income tax purposes, real estate property taxes for a vacation home and first home are fully deductible. The IRS (Publication 530) provides detailed tax information for first-time buyers that may answer many questions about what deductions homeowners are eligible for.
•Preferential Tax Treatment – If you own your home for more than a year and receive more profit than the allowable exclusion after the sale of your home, the profit will be considered a capital asset. Capital assets are given preferential tax treatment.
•Equity Building – Many factors such as credit qualification, loan flexibility, and annual percentage rate (APR) contribute to the final decision of what type of mortgage loan best fits your goals. Yet, a new trend being used by some homeowners is to actually add money to their monthly payment to decrease the principal balance of their loans at a much faster pace. This trend is called equity building. Equity builders usually select a home loan with a lower interest rate (and a shorter term loan such as a 15-year fixed) to help build equity faster. This rapid payment process allows borrowers to:
•Pay off the principal balance faster
•Lock in near-record-low interest rates
•Shorten the length of their home loan
•Own their home faster
•Pay substantially less mortgage interest
Equity building is a beneficial trend that’s becoming more and more popular with fiscally responsible homeowners. Also, home equity is the largest single source of household wealth for most Americans.
•Pride – Homeownership offers many benefits to many different types of people. For some homeowners, playing your music as loud as you want and painting the walls the color of your choice is a perk. For me, homeownership will permit me to build an NBA regulation size basketball court on my own property. For my coworker Joel Jarvi, home ownership may allow him to build the indoor slide of his dreams. No matter who you are, homeownership is a purchase, commitment, and journey that’s sure to bring you pride.
Furthermore, when the uncertainty surrounding the housing market fades and the market rebounds, homeownership may in fact transform that pride to profit through a home sale.
Read more: http://www.quickenloans.com/blog/top-5-reasons-buy-home-2012#ixzz1jjP5BC6e
by Jonathan Slappey on January 6, 2012 in Home Buying
The American dream of homeownership is a very feasible aspiration for 2012.
There are many benefits of owning a home. Yet some first-time buyers are skeptical of purchasing with the uncertainty surrounding the housing market.
The uncertainty many reference when speaking about the housing market involves a specific date when home values will increase. Since no one can pinpoint this date, the word uncertainty (when paired with the housing market) often reveals a negative connotation.
There are some factors we can be certain about in this housing market such as home values rebounding. This is true; the housing market often moves in cycles.
It’s safe to assume that many Americans harbored the same uncertainty during the George H. W. Bush administration in the early 1990s when the national homeownership rate fell from its previous historic high of 64.4 percent in 1980 to a low of 64.1 percent in 1991.
In the 1960s Lyndon Johnson illustrated a correlation between homeownership and accountability by stating “owning a home can increase responsibility and stake out a man’s place in his community…The man who owns a home has something to be proud of and reason to protect and preserve it."
This statement is still true more than 50 years later. There are many reasons to take pride in homeownership such as:
•Appreciation – Buying a home now (at the current rates) can almost ensure your home’s appreciation in the future. Mortgage rates are near historic lows and home prices in many parts of the country are down. This is the perfect recipe for home appreciation. Additionally, many foreclosed homes are available for a fraction of the original cost. This can translate to a higher profit if you decide to sell once the market rebounds.
•Property Tax Deductions – For income tax purposes, real estate property taxes for a vacation home and first home are fully deductible. The IRS (Publication 530) provides detailed tax information for first-time buyers that may answer many questions about what deductions homeowners are eligible for.
•Preferential Tax Treatment – If you own your home for more than a year and receive more profit than the allowable exclusion after the sale of your home, the profit will be considered a capital asset. Capital assets are given preferential tax treatment.
•Equity Building – Many factors such as credit qualification, loan flexibility, and annual percentage rate (APR) contribute to the final decision of what type of mortgage loan best fits your goals. Yet, a new trend being used by some homeowners is to actually add money to their monthly payment to decrease the principal balance of their loans at a much faster pace. This trend is called equity building. Equity builders usually select a home loan with a lower interest rate (and a shorter term loan such as a 15-year fixed) to help build equity faster. This rapid payment process allows borrowers to:
•Pay off the principal balance faster
•Lock in near-record-low interest rates
•Shorten the length of their home loan
•Own their home faster
•Pay substantially less mortgage interest
Equity building is a beneficial trend that’s becoming more and more popular with fiscally responsible homeowners. Also, home equity is the largest single source of household wealth for most Americans.
•Pride – Homeownership offers many benefits to many different types of people. For some homeowners, playing your music as loud as you want and painting the walls the color of your choice is a perk. For me, homeownership will permit me to build an NBA regulation size basketball court on my own property. For my coworker Joel Jarvi, home ownership may allow him to build the indoor slide of his dreams. No matter who you are, homeownership is a purchase, commitment, and journey that’s sure to bring you pride.
Furthermore, when the uncertainty surrounding the housing market fades and the market rebounds, homeownership may in fact transform that pride to profit through a home sale.
Read more: http://www.quickenloans.com/blog/top-5-reasons-buy-home-2012#ixzz1jjP5BC6e
Tuesday, September 27, 2011
How to Access and Use Counselors' Online Calculator
COUNSELORS CALCULATOR TUTORIAL
An interesting application on our website allows you to calculate preliminary closing costs. By answering a few mandatory questions, you can have your free quote sent right to your email in a matter of seconds!! In order to correctly use this tool, please visit our homepage at http://www.ctitle.net/ and follow these directions:
1) Please click on the blue "Let Us Save You Money!/ Get a Quote" box on the right.
An interesting application on our website allows you to calculate preliminary closing costs. By answering a few mandatory questions, you can have your free quote sent right to your email in a matter of seconds!! In order to correctly use this tool, please visit our homepage at http://www.ctitle.net/ and follow these directions:
1) Please click on the blue "Let Us Save You Money!/ Get a Quote" box on the right.
2) Then continue to the next page where you are required to fill out:
- whether you are refinancing or purchasing
- if it is your primary residence
- the property type
- the property location
- sales price and/ or loan amount
- the property address
- your name and email to send the quote
3) Then Press "Get My Quote"! Your quote will appear immediately and will also be sent to your email for easy printing.
**Always remember that Counselors keeps all of the information you have given us very secure.
If you are at all hesitant to complete the online form, PLEASE give us a call at (202) 686-0100 to speak to an attorney in person.
If you are at all hesitant to complete the online form, PLEASE give us a call at (202) 686-0100 to speak to an attorney in person.
Monday, August 22, 2011
Friday, August 19, 2011
COUNSELORS TITLE OPENS NEW OFFICE IN DUPONT CIRCLE
Christopher Darby, Esq. Announced New Office Manager
Washington, D.C. (August 12, 2011) - Counselors Title announced the opening of its new Dupont Circle office which joins other locations in Friendship Heights, Gaithersburg/Kentlands, Bethesda, Rockville, and Germantown. Counselors Title is an independently owned and operated title and escrow company serving Washington, DC, Maryland, and Virginia. Founded in September 2007 by five former managers of Universal Settlements, among the largest and most well respected title companies in the Washington Metropolitan area, Counselors Title brings over 75 years of combined experience in one of the most active and competitive real estate and mortgage markets in the country. Counselors is proud to announce the opening of its new Dupont office and the new office manager and title industry expert Chris Darby.
Chris Darby has offered clients exceptional, professional, and friendly real estate services since 1998. He is a member of the District of Columbia and Maryland Bar Associations. Chris is an active member of the local real estate community with service to and membership in the D.C. Land Title Association and the Greater Capital Area Association of Realtors ("GCAAR") where he has served on the Contract and Clause Committee since 2001. Chris regularly teaches real estate continuing education courses for local realtors and was honored by GCAAR as its 2007 Affiliate of the Year for his service to the real estate community. Chris is excited to focus on strengthening Counselors' presence in downtown DC and capitalizing on the local market's emerging growth.
"Dupont Circle was the logical step in this company's expansion," says Counselors' attorney Chris Darby. Counselors based its decision on the attraction of Dupont's wide range of style and pricing. Not only has Dupont become one of D.C.'s more stylish neighborhoods, it has maintained its appeal because of its convenient central location near commercial work, dining, shopping, entertainment venues, and historical landmarks. With convenient access to downtown DC, Northern Virginia and Maryland, the Dupont location allows the real estate community another option to service their real estate needs.
For more information regarding Counselors Title, please visit http://www.ctitle.net . For legal advice email askus@ctitle.net and for the latest real estate news, follow The Counselor at http://counselorstitleblog.blogspot.com/
Contact: Chris Darby
chris@ctitle.net
1320 19th Street, NW
Suite 201
Washington, DC 20036
(202) 787-5600
Monday, May 2, 2011
Property Tax Ups and Downs
The proposed tax assessments for the 2012 tax year in the District of Columbia (October 1, 2011 to September 30, 2012) have recently been released. Many District residents may find that their assessments have decreased but actually see an increase in their real estate tax liability. District residents, you are not alone. This same issue has arisen in Maryland. This seemingly impossible scenario is a direct result of real property tax “caps” put into place in both jurisdictions known as the Owner Occupied Tax Credit in the District and the Homestead Credit in Maryland. While this will not be true for all homeowners, the situation is prevalent and properly illustrates the need for all homeowners to familiarize themselves with their property tax bills.
Assessments
Assessed values establish the value of a property for purposes of determining its real estate tax liability. In Maryland, properties are assessed on three year cycles and increases in the assessed values are phased in on each property over the course of the three year assessment term. Decreases take effect immediately and remain in place for the three year term. The District of Columbia re-assesses every property every year, with the recently released assessments effective for the tax year beginning next October. There are a number of approaches used in each jurisdiction to determine assessed value, including sales and cost approaches. Irrespective of the means through which the valuations are arrived upon, both District and Maryland laws require that the assessments be set at 100% of the estimated market value.
Where the assessment is not in line with market values, homeowners should be ready to appeal their assessments. For current owners, the District allows until April1 for appeals. Maryland owners have forty-five (45) days from the date of their assessment notice to file their appeals. New homeowners in both jurisdictions have the ability to appeal their assessments for a limited time after their purchase. While the timeframes for these post-purchase appeals may be greater than the standard appeal periods, the right to appeal and timeframes for doing so are strictly adhered to. These provisions must be consulted at the time of purchase. For information on the appeals process, owners should consult:
District - otr.cfo.dc.gov/otr/cwp/view,a,1330,q,594359.asp
Maryland - www.dat.state.md.us/sdatweb/appeal.html
Caps
They may have different names, but the effect of the “caps” in the District and Maryland are the same. The history behind the caps is not unique to our jurisdictions. Briefly, as property values increased rapidly in the middle part of the mid-2000s, many long-time residents saw their assessments, and subsequently their tax liability, increase dramatically. The legislatures were appealed to and subsequently enacted legislation that restricted the real property tax liability increases in certain situations. Owner-occupants who have properly filed for the Homestead Deduction/Credit in the District and Maryland now see their property tax liability increase from year to year capped at ten (10) percent over the prior year’s liability.
While assessments over the past decade may have increased by 50, 75 or even over 100%, the effect of the cap makes it such that it could take a number of years before a Homesteader would pay taxes at the full assessed value. Many residents subsequently have been paying property taxes that are a great deal less than the assessments would otherwise dictate. As a result, it is quite possible that a homeowner, even after seeing his/her assessment reduced, will continue to have their actual tax liability increase until the “caps” catch up with the new assessment.
What to Do
First, make sure that tax assessments are accurate. If they are not, be sure to appeal.
Second, if you are entitled to Homestead benefits (or any other tax credits) in your jurisdiction (DC otr.cfo.dc.gov/otr/cwp/view,A,1330,Q,594163.asp and MD www.dat.state.md.us/sdatweb/homestead.html), make certain that you have filed for them. Third, review your tax bills to make sure that they are correct and reflect the benefits for which you have filed and are entitled. You can review your property tax information in the District at www.taxpayerservicecenter.com. In Maryland, assessments can be reviewed at www.dat.state.md.us and the tax information can be seen on the various county/city websites.
Keep in mind that, if your taxes are going up by ten percent per year, that isn’t necessarily a bad thing. It means that you are receiving the benefit of the cap and it is preventing your taxes from being even higher. For additional information, please consult your real estate professional or the real estate attorneys at Counselors Title, LLC.
Assessments
Assessed values establish the value of a property for purposes of determining its real estate tax liability. In Maryland, properties are assessed on three year cycles and increases in the assessed values are phased in on each property over the course of the three year assessment term. Decreases take effect immediately and remain in place for the three year term. The District of Columbia re-assesses every property every year, with the recently released assessments effective for the tax year beginning next October. There are a number of approaches used in each jurisdiction to determine assessed value, including sales and cost approaches. Irrespective of the means through which the valuations are arrived upon, both District and Maryland laws require that the assessments be set at 100% of the estimated market value.
Where the assessment is not in line with market values, homeowners should be ready to appeal their assessments. For current owners, the District allows until April1 for appeals. Maryland owners have forty-five (45) days from the date of their assessment notice to file their appeals. New homeowners in both jurisdictions have the ability to appeal their assessments for a limited time after their purchase. While the timeframes for these post-purchase appeals may be greater than the standard appeal periods, the right to appeal and timeframes for doing so are strictly adhered to. These provisions must be consulted at the time of purchase. For information on the appeals process, owners should consult:
District - otr.cfo.dc.gov/otr/cwp/view,a,1330,q,594359.asp
Maryland - www.dat.state.md.us/sdatweb/appeal.html
Caps
They may have different names, but the effect of the “caps” in the District and Maryland are the same. The history behind the caps is not unique to our jurisdictions. Briefly, as property values increased rapidly in the middle part of the mid-2000s, many long-time residents saw their assessments, and subsequently their tax liability, increase dramatically. The legislatures were appealed to and subsequently enacted legislation that restricted the real property tax liability increases in certain situations. Owner-occupants who have properly filed for the Homestead Deduction/Credit in the District and Maryland now see their property tax liability increase from year to year capped at ten (10) percent over the prior year’s liability.
While assessments over the past decade may have increased by 50, 75 or even over 100%, the effect of the cap makes it such that it could take a number of years before a Homesteader would pay taxes at the full assessed value. Many residents subsequently have been paying property taxes that are a great deal less than the assessments would otherwise dictate. As a result, it is quite possible that a homeowner, even after seeing his/her assessment reduced, will continue to have their actual tax liability increase until the “caps” catch up with the new assessment.
What to Do
First, make sure that tax assessments are accurate. If they are not, be sure to appeal.
Second, if you are entitled to Homestead benefits (or any other tax credits) in your jurisdiction (DC otr.cfo.dc.gov/otr/cwp/view,A,1330,Q,594163.asp and MD www.dat.state.md.us/sdatweb/homestead.html), make certain that you have filed for them. Third, review your tax bills to make sure that they are correct and reflect the benefits for which you have filed and are entitled. You can review your property tax information in the District at www.taxpayerservicecenter.com. In Maryland, assessments can be reviewed at www.dat.state.md.us and the tax information can be seen on the various county/city websites.
Keep in mind that, if your taxes are going up by ten percent per year, that isn’t necessarily a bad thing. It means that you are receiving the benefit of the cap and it is preventing your taxes from being even higher. For additional information, please consult your real estate professional or the real estate attorneys at Counselors Title, LLC.
Wednesday, April 20, 2011
Counselors Minimum Credit and the Reissue Rate
Counselors Minimum Credit*
COUNSELORS TITLE MINIMUM CREDIT (purchases). We anticipate finding you a reissue rate. To that end, we will GUARANTEE you minimum savings (a reissue rate may provide for a greater discount) on every purchase transaction. Below is a chart for our Guaranteed Minimum Credits. We will pass on to you whichever credit/discount provides for the greater savings!
Purchase Price Counselors Minimum
Credit
$100,000 - $249,999 $150.00
$250,000 - $399,999 $300.00
$400,000 - $499,999 $600.00
$500,000 - $599,999 $700.00
$600,000 - $699,999 $800.00
$700,000 and above $900.00
What is a Reissue Rate and Why is it Important?
The reissue rate is a discount on the title insurance premium charged. Title insurers allow their agents to pass-on discounts to consumer where there is evidence that the title to the property being acquired has previously been insured. In these cases, the risk to the “new” insurer is reduced and warrants a reduced charge to the consumer (up to 40%). Insurers vary as to how recently the property must have been previously been insured and what evidence of prior insurance is required.
Below is a chart illustrating the significant savings that can be provided by a “full” reissue rate:
Purchase Price:(Full Premium) - (Reissue Savings) = Discounted
Premium
$500,000.00 ($2,700.00) - ($1,080.00) = $1,620.00
$1,000,000.00 ($4,950.00) - ($1,980.00) = $2,970.00
$1,500,000.00 ($6,900.00) - ($2,760.00) = $4,140.00
$2,000,000.00 ($8,850.00) - ($3,540.00) = $5,310.00
COUNSELORS TITLE MINIMUM CREDIT (purchases). We anticipate finding you a reissue rate. To that end, we will GUARANTEE you minimum savings (a reissue rate may provide for a greater discount) on every purchase transaction. Below is a chart for our Guaranteed Minimum Credits. We will pass on to you whichever credit/discount provides for the greater savings!
Purchase Price Counselors Minimum
Credit
$100,000 - $249,999 $150.00
$250,000 - $399,999 $300.00
$400,000 - $499,999 $600.00
$500,000 - $599,999 $700.00
$600,000 - $699,999 $800.00
$700,000 and above $900.00
What is a Reissue Rate and Why is it Important?
The reissue rate is a discount on the title insurance premium charged. Title insurers allow their agents to pass-on discounts to consumer where there is evidence that the title to the property being acquired has previously been insured. In these cases, the risk to the “new” insurer is reduced and warrants a reduced charge to the consumer (up to 40%). Insurers vary as to how recently the property must have been previously been insured and what evidence of prior insurance is required.
Below is a chart illustrating the significant savings that can be provided by a “full” reissue rate:
Purchase Price:(Full Premium) - (Reissue Savings) = Discounted
Premium
$500,000.00 ($2,700.00) - ($1,080.00) = $1,620.00
$1,000,000.00 ($4,950.00) - ($1,980.00) = $2,970.00
$1,500,000.00 ($6,900.00) - ($2,760.00) = $4,140.00
$2,000,000.00 ($8,850.00) - ($3,540.00) = $5,310.00
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