Joseph Foster

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.

This means that first-time homebuyers have just under 12 weeks to find and close on a home to qualify for the $8,000 federal tax credit by Nov. 30 - before the Dec. 1^st deadline.

Those just beginning the process will have to beat the average time it takes to buy a home, a challenge that real estate professionals can help buyers meet even though it's taking longer today to close most transactions today.

Foster & Probert would like to take this opportunity to provide our current and potential clients with more information on this topic. Below are some answers to some of the most frequently asked questions regarding this new tax credit. These answers are for general use only and can, in no way, replace the advice of a professional attorney, accountant, or knowledgeable real estate agent/broker. If you have specific questions, please contact us with your concerns.

Q. Who qualifies for this credit?

A. First-time home buyers who purchase homes between January 1, 2009 and December 1, 2009. To qualify as a "first-time home buyer" the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.

Q. Which Properties Are Eligible?

A. The 2009 First-Time Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.

Q. How Much Will the Credit Be?

A. The maximum allowable credit for home buyers is $8,000. Each home buyer's tax credit is determined by two factors:

1. The price of the home - the credit is equal to 10% of the purchase price of the home, up to $8,000.

2. The buyer's income - single buyers with incomes up to $75,000 and married couples with incomes up to $150,000 - may receive the maximum tax credit.

Q. If the Buyer(s)' income exceeds these limits, can he/she still get a credit?

A. Yes, some buyers may still be eligible for the credit.

The credit decreases for buyers who earn between $75,000 and $95,000 for single buyers and between $150,000 and $170,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income-over $95,000 for singles and over $170,000 for couples are not eligible for the credit.

Q. I plan to build a home and occupy it in 2009. Can I claim the first-time homebuyer credit now and use the funds toward the down payment or other ongoing construction costs?

A. No. To qualify for the first time home buyer credit, the residence must be purchased. By statute, a residence which is constructed by the taxpayer is treated as purchased on the date the taxpayer first occupies the residence.

Q. I am in the process of buying a home. I expect to close the deal before December 1, 2009. Can I claim the first-time homebuyer credit now? That would allow me to use the refund for a down payment.

A. No. You may not claim the credit in anticipation of a purchase that has yet to happen. Until you have finalized the purchase of your home, which for most purchasers occurs at the time of the closing, you do not qualify for the credit.

Q: When must I pay back the credit for the home I purchased in 2009?

A: Generally, there is no requirement to pay back the credit for a principal residence purchased in 2009. The obligation to repay the credit on a home purchased in 2009 arises only if the home ceases to be your principal residence within 36 months from the date of purchase. The full amount of the credit received becomes due on the return for the year the home ceased being your principal residence.

Q. Suppose a member of the military who purchased a home and qualified for the credit receives orders to deploy overseas for possibly 18 months. If they sell the home within 3 years from the date of purchase, do they have to pay back the credit?

A. Section 36 does not provide any recapture exceptions for military personnel who are deployed and sell their home within 36 months from the purchase date. If the taxpayer does not sell the residence, then the military deployment may be considered a "temporary absence" and the home may still be the taxpayer's principal residence if the taxpayer intends to return to the residence after the deployment.

The Foster-Probert team hopes that you have found this information to be helpful and look forward to being of service in your quest to purchase a new home.

Sellers Beware of Short Sale, Loan Modification and Foreclosure Rescue Scams

The age old adage "buyer beware" has been turned upside down in all over the country, but especially in Florida. These days it's "seller beware". For the many thousands of homeowners who find themselves upside down in their mortgages and unable to either keep up their payments or sell their homes, the scammers have come out en mass as "loan modification specialists", "home savers" and other creative titles to try and trick you out of your money and, in the worst cases, your home! Please read below for some of the most frequently asked questions regarding these kinds of scams and how to protect yourself from falling prey to them.

Frequently Asked Questions (provided by MyFloridaLegal.com)

• What is a Foreclosure "Rescue" Scam?
• How do I know whether a foreclosure modification company is legitimate?
• Do I need to stop paying my mortgage in order to qualify for a loan modification?
• I paid money to a company several months ago and now they are no longer answering their phones or responding to my emails. What should I do?
• I negotiated a loan modification with a company in California and paid an up-front fee for its service. I was reading about the companies in Florida which are being sued for charging these fees. Does the Florida law only apply to Florida companies?
• I am not a Florida resident and a Florida foreclosure rescue company is attempting to charge me an up-front fee. The company told me that the new law only applies to Florida residents, and they can charge out-of-state residents an upfront fee. Is this correct?
• I received a flyer in the mail or a telephone call from a company that sounded like it was affiliated with the government. What should I do?
• I am attempting to do a loan modification with a licensed Florida mortgage broker. He says he can charge me an application fee under Florida law. Is this correct?
• I have been told by the loan modification company that the fee it is charging is for a forensic audit. Is this legal?

What is a Foreclosure "Rescue" Scam?
Simply put - foreclosure rescue fraud happens when a company or person promises to help save your home from foreclosure, but is actually intent on stealing your home, most of the equity you have accumulated in your home, or a substantial amount of money.
There are several types of Foreclosure Rescue Scams you should be aware of:

• • Foreclosure Prevention Specialist - these are phony foreclosure counselors who may try to collect large sums of money but rarely provide any services.
  • Phantom Help - individuals who charge high fees for work the homeowner could do his or herself.
  • Lease/Buy Back - homeowners are deceived into signing over the deed to their homes.
  • False Bailout - the homeowner is led to believe that he or she can rent his or her home from the new owners and eventually repurchase the home.
  • Bait and Switch - the homeowner thinks he or she is signing new mortgage documents, but is actually signing over the deed to their home.

How do I know whether a foreclosure modification company is legitimate?
You should avoid any company that asks you to pay an up-front fee for its services, no matter what that fee is called. You should also avoid any company that promises you that it can save your home or get you a reduced mortgage interest rate. You can call the Attorney General Hotline at 1-866-966-7226 and check to see if there are any complaints.

Do I need to stop paying my mortgage in order to qualify for a loan modification?
No. Avoid any company that instructs you to stop paying your mortgage.

I paid money to a company several months ago and now they are no longer answering their phones or responding to my emails. What should I do?
You should always attempt to negotiate with your original lender first, and you should re-contact them if you still need assistance. You should also file a complaint with the Attorney General's Office.

I negotiated a loan modification with a company in California and paid an up-front fee for its service. I was reading about the companies in Florida which are being sued for charging these fees. Does the Florida law only apply to Florida companies?
No. The statute applies to ALL companies, regardless of where they are located, if they are assisting a consumer who owns real property in the State of Florida or if the companies are located in Florida.

I am not a Florida resident and a Florida foreclosure rescue company is attempting to charge me an up-front fee. The company told me that the new law only applies to Florida residents, and they can charge out-of-state residents an upfront fee. Is this correct?
No. The law applies to any company doing business in Florida.

I received a flyer in the mail or a telephone call from a company that sounded like it was affiliated with the government. What should I do?
Do not respond to any solicitation, either by mail or by telephone, which does not come from someone you already know and trust. These types of solicitations usually are from private, for-profit companies which are only looking to make money.

I am attempting to do a loan modification with a licensed Florida mortgage broker. He says he can charge me an application fee under Florida law. Is this correct?
No. The Office of Financial Regulation has stated that loan modifications are not governed under their regulatory statutes. Consequently, even Florida licensed mortgage brokers are governed by Florida Statute 501.1377 and may not charge an application fee or any other upfront fee directly or indirectly.

I have been told by the loan modification company that the fee it is charging is for a forensic audit. Is this legal?
No. Loan modification companies cannot charge any fee or secure payment for any service that has not been completed.

Don't let yourself fall prey to these scam artists. Remember, if it sounds too good to be true, it very well probably is. If the professional wants a large sum of money upfront, investigate them; see how long they have been in business by using www.Sunbiz.org and check the status of their license and make sure there are no complaints (www.MyFlorida.com is good for this). Are they an attorney? A Real Estate Professional? What did they do to earn their living before the this outbreak of Short Sales and Foreclosures? Hint: if it wasn't Real Estate Law or Real Estate Brokerage, that smells like an Opportunist, not a Professional.

If your property is even ONE payment behind, you need to find a professional who is truly out to help you navigate this tough time. If you intend to KEEP the home, you can likely try and work out a modification on your own. If you just can't keep the home, give us a call, we are here to help you market, sell and CLOSE West Coast Florida Short Sale Property. We are Licensed Real Estate Agents that are specially trained in Short Sale and Foreclosure Homes. We only get paid when the property SELLS, and that comes out of the proceeds to the lender from the sale, not your pocket!

For more information on how we can assist you with buying a short sale home, or listing your homes as a short sale, please contact the Foster-Probert team at (941) 812-7634, or email us at: jospehfoster@michaelsaunders.com