Tallahassee, FL

Changes have been made by the Federal Housing Administration (FHA) that are going to have an immediately wonderful impact on people who want to do a Tallahassee FHA streamline refinance.

You see, the FHA has found itself in a bad position, and perhaps it feels that best way to protect itself is to to do a little more of "what got us here in the first place."

So what the heck is this all about and who could need or want a Tallahassee FHA streamline refinance?

Defining Tallahassee FHA Streamline Refinance

A Tallahassee FHA streamline refinance is simply a way for people who have FHA loans to lower their interest rate and payment amounts.

The "streamline" refers only to the amount of documentation and underwriting that needs to be performed by the lender, and does not mean that there are no costs involved in the transaction. The basic requirements of a streamline refinance are:

• The mortgage to be refinanced must already be FHA insured.
• The mortgage to be refinanced should be current (no late payments going back 12 months).
• The refinance is to result in a lowering of the borrower's monthly principal and interest payments.
• No cash may be taken out on mortgages refinanced using the streamline refinance process.

And the good news only gets better!

There are no credit checks, no property appraisals, no income verifications, etc. If you have a house with an FHA loan, you qualify!

So, in a nutshell, you should contact a Tallahassee FHA streamline refinance mortgage lender to see how much they can lower your payments on your home because ....

You Already Qualify!

Why FHA Wants You To Do A Tallahassee FHA Streamline Refinance

FHA mortgage insurance provides lenders with protection against losses as the result of homeowners defaulting on their mortgage loans. The lenders bear less risk because FHA will pay a claim to the lender in the event of a homeowner's default. So if you already have an FHA loan ...

The the FHA has already guaranteed a lender that you will repay the loan.

It's in their best interest to make it easier for you to do so!

So even if you own 100% more on the home than it is worth (with an FHA loan), and you've lost your job, and your credit score is 500, ... you still qualify. Why?

Because the FHA has already guaranteed your loan amount, that's why. They can reduce their risk if they can make it easier for you to repay the loan

How To Start A Tallahassee FHA Streamline Refinance

With today's historic low interest rates, the time is right for FHA financed homeowners to consider this as a long-term option for owning the home.

That means you should immediately talk to a trusted Tallahassee mortgage broker to do a Tallahassee FHA streamline refinance and see how much savings you can gain.

So many Americans are facing the hardship of being unable to pay their mortgage. Would it ever be smart to simply stop paying it? Strategic Default is a tough decision. Here are some great tips I came across to keep in mind:

1. Look to it as a last resort, not a first option. Your financial troubles could be alleviated with a simple refinancing, especially since 30-year mortgage rates are near record lows of below 4 percent. If the banks are hesitant to rework your loan, look into the number of government programs designed to keep you in your home, which can be researched at MakingHomeAffordable.gov.

2. Location, location, location. Each state has its own rules and regulations regarding foreclosures, which affect both the length of the process and what you could be liable for in the end. In so-called 'non-recourse' states like Arizona, California and Texas, a lender cannot come after you for any deficiency (for instance, if your mortgage was $300,000 and they're only able to sell the property for $200,000). In other states they can pursue the difference, in theory - which is why some homeowners opt to file for bankruptcy, to free themselves from those potential obligations as well.

3. Use the interim to save like a demon. If you're in a state like New York or Florida, which require a judicial review of every foreclosure, it might be a couple of years before you actually have to pack up. In the meantime, be extremely disciplined about stockpiling cash. That will help you with a down payment for a rental, to pay for a car in cash if you need to, or to clear up other debts you might have. "Save money as if you were still paying the mortgage," says Archer. "If you don't, then you'll run out of both time and money, and then you'll be in a real tough spot."

4. Know the tax implications. Historically, if you have a debt that's forgiven, the canceled amount is considered taxable by the IRS. In the wake of the housing bust, though, the Mortgage Forgiveness Debt Relief Act was drafted to spare you those taxes. That legislation expires at the end of 2012, though - so if it's not extended, you could potentially face a tax bill for the difference.

5. Talk to a professional. A bankruptcy or real-estate attorney can help you through a very tricky process. The National Association of Consumer Bankruptcy Attorneys, for instance, has a searchable database of lawyers at www.nacba.org.

"Strategic default is not an easy decision, and there's a cost either way," said Gerri Detweiler, director of consumer education for Credit.com. "Would you rather be $200,000 underwater, or would you rather have seven years of damage to your credit report? It depends whether you're finally at the point where enough is enough."

I have had quite a few conversations lately about the capital gains tax that results from a short sale or foreclosure, and what exactly what you should do when the lender sends you an IRS Form 1099-C.

First of all, as a quick disclosure to first-time readers ...

OK, my "I'm not a Tallahassee accountant" disclosure is out of the way, let's get back to the topic at hand regarding IRS Form 1099-C.

What Is An IRS Form 1099-C

Recently, a long-time reader asked "why did I get a IRS Form 1099-C from the lender, and what does the amount on the form represent?"

I [gave him my "I'm not a Tallahassee accountant disclosure] explained that the Form 1099-C is sent by the lender as a "forgiveness of debt." The following comes from the language right on the form:

Basically, the way I understand it is the IRS Form 1099-C has one of two purposes for a real estate investor who disposes of a distressed property:

1. Through Foreclosure: The amount on the 1099-C represents the same thing as a sales price would had you sold the property. From that price, you should be able to deduct your cost of sales (in the case of a foreclosure, legals costs paid, etc.), your basis, and you most likely have some recapture to add back in. For simplicity sake, think of the amount as the gross sales price attained.
2. Through Short Sale or some other non-foreclosure sale remedy: The amount on the 1099-C should represent the total loss realized by the lender (loan amount + interest + penalties + legal costs minus net from sales). I have heard of all sorts of numbers that come back from this, but it really should be an amount equal to what they took as a loss. This number then should be added into your formula when calculating your tax on home sales gain [loss] (capital gains tax rate multiplied by [net from sales - basis + debt forgiveness + recapture]).

Scrutinize Your IRS Form 1099-C

Here's two additional questions to ask your Accountant:

1. Has the lender properly calculated the IRS Form 1099-C amount?
2. Can the lender add to the IRS Form 1099-C any uncollected fees to their loss, or must it be purely principle, interest, and penalties only?

I hope this helps clear-up what to do (tax wise) after you dispose of an investment property through short sale, deed-in-lieu, or foreclosure. If you have any additional questions or comments about the IRS Form 1099-C, post them below in the comments section and I will reach out to some Tallahassee accountants to chime in for the right answers.

There are millions of baby boomers around the world trying to decide where to retire, and if long-term reader "Bill" has anything to with it, they are going to choose Tallahassee.

Bill has given the Tallahassee Real Estate Blog great feedback over the years, and his recent comments center on the fact that Tallahassee needs population growth to help the housing market recovery, and courting retirees could be a very wise part of this solution.

We have folks running around trying to attract new business and get "visitors" yet there appears to be no concerted effort to market Tallahassee as a great place to retire. Retirees are clean industry with lots of disposable income -- and a good solution for turning around the housing market and home values. - Bill Z

He adds that Tallahassee is "sorta just like home" for many who come here, so getting Tallahassee into the running for "where to retire" should not be hard to do.

People Want To Know Where To Retire

According to Google, the popular search engine is asked "where to retire" 22,126 times each day in the US alone. It seems as if finding where to retire is a very popular question right now, and we need to get the word out that Tallahassee is a very suitable answer.

There are so many logical reasons that Tallahassee could become a top destination for people who are looking for "the next phase of their life." As Bill pointed out in his message, Tallahassee is

• not South Florida
• hilly
• blessed with four seasons
• seasonal, but with benign winters
• oozing "home town feel"
• not prone to storm surge
• not provincial
• relatively sophisticated due to government and the universities
• where to retire

Tallahassee: Where To Retire

Last August, we shared an article from the Democrat, written by Elizabeth M. Mack, that announced the new Choose Tallahassee initiative. This marketing campaign was designed to lure more baby boomers to the Tallahassee area.

Here we are six months later and that campaign apparently died. There is a choose Tallahassee website that shows little, if any traffic (website rating on Alexa). As a matter of fact, the article I wrote about the campaign is the #1 search result on Google for "choose Tallahassee."

This means that many of us understand the need to get the word out about Tallahassee, but there is no collective effort to make it happen.

How To Help Spread The Word About Tallahassee

This part is simple, and we all play a part in the getting the word out about Tallahassee.

Help spread the message. When you see positive articles on Tallahassee, share them!

Put them on Facebook and any other social media applications that you use. The viral effect of all of us spreading the word about the benefits of living in Tallahassee could help restore our local economy, as well as the slumping housing market.

You can be part of a great support system for Choose Tallahassee, so help spread the word! Look to the top left margin on the Tallahassee Real Estate Blog and the social sharing buttons are all there. Spread the word in your network, and ask them to do the same.

And the next time you are asked about where to retire, remember to tell them to check out Tallahassee, Florida.

There was an article in yesterday's New York Times that explained the new mortgage relief plan, which is due to be signed today, is very close to completion.

Like so many articles that have been written about the housing market crisis, this one liberally showed how all the victims will receive assistance.

In case you do not remember, the victims of this are the homeowners who have or will lose their homes to foreclosure due to their failure to make the payments on the loan.

They are victims because the banks wrongfully forged documents to make the foreclosures happen.

Now I certainly understand why the Feds want to go after and punish the banks for forgery, but I'm having a problem labeling the homeowners as "victims" of this crime.

Have their been any cases reported where banks forged documents to foreclose on anybody who was "current" on their loan?

Everybody is lining up to take shots at these banks as if they were attacking performing loans. These are loans that are in default!

You are not going to fix the housing market by handing out money to people who are not making their mortgage payments. But apparently, the Obama Administration sees otherwise:

“This will be one of the most significant steps in the recovery of homeowners, neighborhoods and the broader housing market from the worst collapse since the Depression.” - Shaun Donovan, the Secretary of Housing and Urban Development

This makes me sick.

Mortgage Relief Plan Is Counter Productive

Let's not confuse two very separate issues that are really at play here.

1. Many lenders forged documents (they broke the law) and they should be punished
2. What harm has there been to homeowners, and why are we taking billions of dollars from banks and just giving them out to people who defaulted on their loans?

Maybe I'm reading this wrong, but I have yet to hear stories from the "robo-signing" scandal where people were wrongfully foreclosed upon.

These lenders (or their legal representatives) created documents to show they owned the loans (meaning so they could have the legal right to foreclose). Again, have the FBI throw the wrong-doers into jail for loan fraud.

But why take money from the shareholders of these banks and give it to people who were in default of their loans? Is this really justice for anybody, or just a re-distribution of wealth?

Mortgage Relief Plan Is Fraud

Unless I completely missed the boat on this, I would think that this mortgage relief plan is as fraudulent as the methods the banks used to foreclose on the loans in question.

The comment from the Secretary of Hud is an insult to the intelligence of the American people. The US mortgage market exposure far exceeds a trillion dollars, giving handouts of $18B to $25B to a small fraction of the market is not going to have an impact.

Think I'm wrong? I said the same thing about the Homebuyer Tax Credit when it was first envisioned several years ago. The Tallahassee housing market (as well as the US housing market) has since returned to pre-tax credit levels, and the US government is going to receive less revenues from taxes for the coming few years.

Keep the government out of the housing market recovery. The mortgage relief plan is a terrible mistake that is a clear re-distribution of wealth (which I guess is Obama delivering on his campaign promises).