HAFA Updates – Now More Boise Homeowners Can Avoid Foreclosure

The Treasury Department announced that the Home Affordable Modification Program (HAMP) - which is the sister program for HAFA - was extended by one (1) year through December 31, 2013.

This is good news for Boise homeowners who can no longer afford to stay in their homes but fear some of the adverse consequences of a short sale. Not only has the HAFA program been extended, but key provisions have been expanded to allow more Boise homeowners to participate and avoid foreclosure.

Noteworthy changes to the HAFA short sale program include:

· Occupancy requirements have been eliminated so homeowners no longer have to stay in their home to participate in the HAFA short sale program.

· Increased the amount of proceeds that can be paid to secondary loans, up to $8,500, thus increasing the number of short sales that can be approved.

· Homeowners that have the ability and desire can now keep payments current throughout the HAFA short sale process in order to preserve a favorable credit score.

· Loan servicers may now report short sales to credit reporting bureaus under more favorable status codes to show the account was paid or closed, with zero balance or the account was paid in full, a foreclosure was started as applicable.

· Higher treasury paid financial incentives for Fannie Mae and Freddie Mac to forgive principal

If you are looking for more information about short sales in the Boise area click here and learn how a certified distressed property expert can help you avoid foreclosure. Now is an excellent time to sell your home, Boise real estate inventory is low and buyer remains strong and demand is rising as we head into springtime, so don't miss the current real estate market opportunities.

Invest in Boise Idaho Real Estate

Buffett, or The Oracle of Omaha as he is often called says single family homes are a best bet investment given today’s real estate prices and historically low mortgage interest rates.

Buffett is considered by many to be the foremost voices in the financial investment field so in other words when he says buy, others ask how many?

Buffett has been talking up single family homes for awhile now and recently reiterated his bullish opinion on real estate investments a short time ago during a CNBC interview. He advises first time home buyers to get off the fence and purchase because now before the opportunity to cash in passes them by. Further he opines that those who are handy with home repair should invest in more than one and gain additional financial benefit from sweat equity.

Boise Idaho real estate trends continue to point toward improving market conditions. Price erosion has leveled off and in some Boise areas pricing is actually on an upward trajectory. Opportunities to purchase a 3 bedroom, 2 bath home in the Boise real estate market for under $100,000 are disappearing quickly as inventory levels continue to plummet.

Click here to search for Boise short sales and bank owned homes and cash in on the opportunities!

DEBT FORGIVENESS GUIDELINES

Thousands of Boise homeowners have experienced a short sale of their primary home over the past several years, but many may not know about the tax consequences of a short sale. Tax consequences are one of the first questions that I am asked as a Boise Certified Distressed Property Expert when counseling clients about their foreclosure options. All homeowners should consider the following information from the IRS about short sale debt forgiveness when considering whether a short sales is the best option for them to avoid foreclosure.

When a lender writes off any part of a mortgage balance (debt forgiveness), the portion of the balance that was forgiven becomes taxable income to the borrower under IRS guidelines.

In 2007, congress passed the Mortgage Forgiveness Debt Relief Act (MFDRA) in response to the burgeoning mortgage default crisis. Under the MFDRA, borrowers may be allowed to exclude up to $2 million of mortgage debt on a principal residence from 2007 through 2012; however there is a $1 million dollar limit for a married person when filing a separate tax return. The MFDRA also includes debt reduced through a mortgage restructuring program.

The MFDRA also includes mortgages for home improvement projects as long as the improvements “substantially improve” the borrowers principle residence. Homeowners should contact a qualified CPA for details regarding what constitutes as a “substantial improvement”. Any secondary mortgage(s) taken out for other purposes not related to home improvement would not qualify for debt forgiveness with the possible exception of certain bankruptcy considerations.

During the short sale process, homeowners will need to pay special attention to the short sale approval letter issued by their lender(s). The approval letter will often outline issues regarding debt forgiveness and may reference IRS Form 1099-C which is an indication a portion of the mortgage debt may be forgiven. A lender will send Form 1099-C after a short sale is approved and they must include certain information on the form such as the amount of debt forgiven and the fair market value of property if foreclosed. Be sure to review the 1099-C upon receipt of it for accuracy.

All Boise homeowners who have successfully sold their home by short sale must complete Form 982: Reduction of Tax Attributes Due to Discharge of Indebtedness when filing their federal income tax return for the year mortgage debt was forgiven.

All Boise homeowners that have gone through a short sale or are considering a short sale to avoid foreclosure should contact a qualified CPA for expert financial counseling. In addition, the IRS provides online tools to assist as well. The Interactive Tax Assistant is a user friendly tool that can be found at irs.gov as well as Publication 4681: Canceled Debts, Foreclosures, Repossessions and Abandonments.

Is It Time To Invest in Boise Real Estate?

The Boise real estate market continues to pick up steam as real estate investors nation wide take advantage of the great opportunities the Boise real estate market currently offering up.

Boise Idaho ranks number 3 on activerain’s February 2012 survey of the hottest real estate markets in the nation. Activerain’s survey targets those that are actively involved in the real estate industry on all levels; thus having their fingers on the pulse of the market. Real estate professionals are best qualified to see shifts in their local markets, months before the media at large takes notice.

The January 2012 Boise real estate statistics also point towards a much stronger market. Single family home pending sales have increased by over 20 percent as compared to January 2011. Pending sales tend to be a leading economic indicator and a strong forecast of future performance. As of February 2012, pending sales show no signs of receding and have already exceeded expectations.

The force behind the emerging Boise real estate market recovery is mostly due to the allure of the Idaho lifystyle to those that are relocating, as well as a relatively stable economy and diverse mix of industries that are well represented in the Treasure Valley. During the last economic boom that ended in 2007/2008, people were relocating in droves to the beautiful Treasure Valley (Ada and Canyon counties). Once the economy stalled, relocations slowed to a trickle when the housing crisis significantly created immobility issues throughout the nation. Some of those same national mobility issues remain, but no longer are they at the same level so we are starting to see the beginnings of another migration to the Gem State.

Another driving force behind the Boise real estate recovery are investors themselves. Savvy investors are attracted to the Boise real estate market because the Boise rental market has become red hot as the demand for rental units increases while the supply of rental inventory units decrease. Boise real estate investors are finding that even in the slow winter months they can still attract tenants, even after adjusting rents upward so they are reflective of current market value.

The most acute Boise real estate market dynamic is the downward spiral of available single family housing inventory that began in June 2011 and has continued unabated into 2012. Inventory levels have been reduced to below “normal” market levels and have continued to remain low. Low inventory levels, coupled with increased sales during the slowest selling season portend robust spring and summer sales. Expect to see more multiple offer scenarios play out beyond the REO inventory if inventory remains low during the warm weather seasons.

The Boise real estate market still has a large supply of underwater mortgages so expect to see bank owned homes hit the market but at a reduced rate, and the competition will remain fierce for the cream of the REO crop. As of late 2011, distress sales still represented about half of all single family home sales. The national mortgage relief settlement will likely increase the number of short sales on the market as compared to REO inventory which seems to have already peaked. Under this settlement, lenders will likely be more financially motivated to encourage distressed borrowers to pursue short sales so they can avoid the escalating cost of foreclosure.

Visit us online to search for Boise short sales and foreclosures, we are available seven days a week to assist our clients.