Dawnmarie Hatfield

The Department of Defense (DOD) is now offering the Homeowners Assistance Program (HAP) to eligible service members and federal civilian, including non-appropriated fund, employees. The program is to assist eligible homeowners who face financial loss when selling their primary residence homes in areas where real estate values have declined because of a base closure or realignment announcement.

The American Recovery and Reinvestment Act of 2009 (ARRA) has also temporarily expanded the HAP to assist service members and DOD employees who are wounded, injured or become ill when deployed, surviving spouses of service members or DOD employees killed or died of wounds while deployed, service member and civilian employees assigned to BRAC 05 organizations, and service members required to permanently relocate during the home mortgage crisis. For more information go to the Dept of Defense Info.

Info courtesy of military.com

The American Recovery and Reinvestment Act of 2009 expanded the first-time homebuyer credit by increasing the credit amount to $8,000 for purchases made in 2009 before Dec. 1. However, the new Worker, Homeownership and Business Assistance Act of 2009 has extended the deadline. Now, taxpayers who have a binding contract to purchase a home before May 1, 2010, are eligible for the credit. Buyers must close on the home before July 1, 2010.

For homes purchased in 2009, the credit does not have to be paid back unless the home ceases to be the taxpayer's main residence within a three-year period following the purchase.

First-time homebuyers who purchase a home in 2009 can claim the credit on either a 2008 tax return, due April 15, 2009, or a 2009 tax return, due April 15, 2010. The credit may not be claimed before the closing date. But, if the closing occurs after April 15, 2009, a taxpayer can still claim it on a 2008 tax return by requesting an extension of time to file or by filing an amended return. News release 2009-27 has more information on these options.

Information provided from www.irs.gov. 2010

If your mortgage payments are delinquent and you have not contacted your bank, you should do so immediately. I have worked with several sellers that have the idea they can't afford the house, nor the real estate commission, to sell the house with a Realtor, so they would rather just walk away from their home and abandon the house. What homeowners do not realize, is the mortgage that you obtained to finance that house remains attached to you even if the bank that takes over the home sells the property. The contract was between you and the bank and most likely was not transferrable. So if you walk away from the home, you not only look at a future judgment being placed against you (if not tended to can end up costing you far more than the loan did itself) but also a lien on any other property of asset value. It also reduces your chances in obtaining another loan and can cause damage to your credit rating.

As a homeowner in distress, contact your lender. Tell them your financial situation has changed. If you have made your payments on time and are in good standing and still have your job, you may qualify for a loan modification so you can stay in the home. If you have missed payments or the bank does not find you to qualify for a loan modification you may have the option of selling your home in a short sale process, which really isn't short at all.

A short sale involves a lender or investor agreeing to collect less than the balance owed on a mortgage debt out of the proceeds of a negotiated sale of the property. Often, a short sale is the last alternative to foreclosure available to distressed homeowners and banks. If your bank agrees to accepting a short sale, you need to hire a realtor familiar with the short sale process. Then you must wait for a buyer who has financing to close the deal and will make an acceptable offer to the bank. If your property has a second mortgage or home-equity credit line, you also need to negotiate how much that lender will receive from the sale proceeds. Sometimes that second mortgage lien may be worthless, but that bank has a legal power to block the short sale by refusing to sign on the deal. And we have come to find that banks, mortgage providers and bond investors are conflicting in their requirements.

But Homeowners may be in for some relief. Believe it or not the first choice for lenders was to keep borrowers in their homes by offering loan modifications as an alternative to foreclosure. According to the Office of the Comptroller of the Currency on September 30, 2009, more than half of those modifications of delinquent mortgages re-defaulted within a year.

Because of this, Obama's administration has now implemented a new standardized short sale plan that is scheduled to roll out in April 2010 which will require lenders to consider borrowers for a short sale on their primary residence 30 days after missing two consecutive payments on a modified loan or after a borrower requests a short sale.

With this plan, the Department of Treasury's program will pay up to $1,500 for a homeowner to relocate, $1,000 to loan servicing companies that accept a sale and a maximum of $1,000 to help settle a second mortgage or subordinate lien. And the lender must agree to release the borrower from all liability for repayment of the mortgage.

Now if I was a Homeowner In Distress, I would think twice about abandoning my home and do whatever it took to communicate with my lender. Whether it be a loan modification or a short sale, in the end I would have saved my credit and my sanity.

For a copy of the Dept. of Treasury's Plan, Click Here.

If you've been in the market to purchase a property in short sale, you may want to read this article (Click here) released by the Tampa Tribune concerning properties with liens pending against properties as a result of contractor non-payment to their construction vendors. While this article shares an incident with one bay area contractor, you buyers of short sales out there need to be aware that along with those amazing prices on properties deficient in their mortgage payments, comes possible tax liens, construction liens, attorney's fees, court costs, past due Homeowner's Association Fees, delinquent Homeowner Association Assessments and more.

The market may be pleasing for buyers, but remember "Caveat Emptor" (let the buyer beware). Examine the property and buy at your own risk, that would include not only include a full inspection of the home itself, but of its court and title records to verify what history you will be purchasing along with the home.

During the course of the last two years, as the lending requirements have changed, many individuals who once qualified for a loan could not get one when trying to buy. Those people in turn selected to either lease a home, or move into an apartment. When you lease a home or apartment you don't usually pay for an inspector to come to the home and check for mold, mildew, dry rot, water damage or termites.

I wanted to share this with everyone because my sister just encountered a situation that almost anyone would walk into now in a renting situation.

When you lease from a private owner, they more likely will do whatever they can to maintain the home so they can continue to keep the rent coming in. When you live in an apartment complex you have to take into consideration how old the building is and the constant flow through of people that lease monthly they work with. Apartment complexes are usually owned by a large corporation. While they have a maintenance person on site., it doesn't appear they are that worried about maintaining the property that well. Usually the landscaping is done to provide a great presentation and when you preview the apartment, there appear to be no flaws because new paint and new carpet make everything look fresh and new. It isn't until you pay your security deposit and move in before you start to notice concerns.

In my sister's case, she moved into an apartment complex that was 18-20 years old. She was placed in a ground floor corner unit. A month into living in the unit, during a heavy rain, she came home to find a wet ring on the wall in the bedroom that extended the length of the outside wall. She took pictures of it and brought them to the office and the office sent the maintenance person to her apartment. Rather than check the source of where the water came from., they pulled back the carpet, dried the floor with paper towels, and proceeded to paint the wall where the ring stained the drywall.

Over a few days the carpet was dry and my sister thought they fixed the problem. My sister is very young and not aware of issues with caring for a home, maintenance or otherwise. Over this weekend, she received a telephone call at her job from her neighbor that a large crash sent her to her bathroom only to find that all the ceramic tiles on the wall of her shower had fallen to the shower floor and the wall baseboards were soak and wet. This wall was attached to my sister's bathroom and walk in closet, so when she got home she immediately went into the bathroom and noticed the baseboard behind the toilet was damp - when she cleaned it dry the entire baseboard came off and what was behind it was startling. The Drywall behind the toilet was wet and damaged along the baseboards, completely soiled in black mold, hidden by a brand new Vinyl baseboard. While on her hands and knees, she noticed the underside of the bathroom cabinetry frayed and bowed from water damage. Then she ran to the closet and found that one side of the closet was soak and wet along the wall attached to the bathroom. A box of personal belongings on the floor was so wet it had stuck to the wall and when moved away revealed black furry mold. There apparently is a leak in the walls but we wondered how long exactly this leak had been going on. Of Course now its Sunday so Maintenance does not work at the apartment. Leaving the entire closet wet for another day just left more room for mold and mildew, so off to CVS we went to get a box fan, bleach, gloves and baking soda.

We spent hours drying the floor by hand, vacumming up excess water, scrubing the walls with bleach and putting baking soda in the holes to stop the water bugs and spiders from coming into the bathroom and closet. Then we ran the fan the entire night. Photos were taken of everything before the cleanup and now we are waiting to see what management plans to do. It is unlikely that Maintenance can fix such a leak problem without tearing out the wall or finding the source of the problem. From discussion with the management office, the leasing agent advised my sister that the last tenant had the same problem and the management broke her lease and sent her on her way.

This can not be a safe living environment for anyone ( especially in this building) . You can not just paint over the problem like this apartment complex has done and hope the next tenant doesn't notice. There is something called quiet enjoyment of living and while it appears my sister may have to move because that apparently has been breached, by contacting the county code ordinance division and OSHA we are hoping that a message can be sent to this complex.

If you are leasing or renting, this is the very reason why you should have renter's insurance with a rider to cover flood or water damage. Your lease will not protect your belongings or replace those items that are sentimental.