Last month, the Consumer Financial Protection Bureau announced a new tool to assist homeowners in anticipation of the new mortgage rules taking effect in January 2014. The purpose of the tool, which can be accessed here, is to connect homeowners with local housing counseling agencies. Effective January 10, 2014, mortgage lenders will be required to give mortgage applicants a list of housing counseling agencies. In case they do not have their own lists available by that time, they can use the tool provided by CFPB.
The new online tool will help homeowners and home buyers find the closest HUD-approved counseling agencies. It will also list the languages spoken at each agency, as well as list the specific services available there.
Thursday, December 26, 2013
Monday, December 16, 2013
FHA Requires Lenders to Self-Report
Lenders who are FHA-approved and lend on single-family property now face a new set of reporting requirements. Effective last month, lenders must report "material findings" of suspected fraud or material misrepresentation, discovered through the lender's quality control process, directly to the Federal Housing Administration. The lender must also disclose what the lender is doing to resolve the issue. Any issues that have already been resolved need not be reported.
So, what's a "material finding"? A material finding is any finding that would have caused the lender to disapprove the loan or not request an FHA endorsement had the lender discovered the material finding before the loan was approved. For example, if the borrower would not have qualified under FHA guidelines but was approved anyway because of the lender's failure to verify his eligibility, income, employment, credit, or the appraisal of the house, that would constitute a "material finding". If the home the borrower purchased was not repaired to FHA standards even though the appraisal noted significant deficiencies, that would be a "material finding" as well.
If lenders fail to report such material findings to the FHA, they are subject to administrative action.
So, what's a "material finding"? A material finding is any finding that would have caused the lender to disapprove the loan or not request an FHA endorsement had the lender discovered the material finding before the loan was approved. For example, if the borrower would not have qualified under FHA guidelines but was approved anyway because of the lender's failure to verify his eligibility, income, employment, credit, or the appraisal of the house, that would constitute a "material finding". If the home the borrower purchased was not repaired to FHA standards even though the appraisal noted significant deficiencies, that would be a "material finding" as well.
If lenders fail to report such material findings to the FHA, they are subject to administrative action.
Monday, December 9, 2013
Alternative Energy Tax Credits Available Through 2016
If you are making, or thinking about making, certain large-scale alternative-energy improvements to your home, there's good news for you. You can get a tax credit for 30% of the cost of these improvements. And you have plenty of time to make the improvements too -- all the way through 2016. There is no limit on the tax credit for these improvements, except that they cannot exceed 30% of the cost of labor and installation.
To qualify, you must install certain types of equipment, such as solar panels, solar water heaters, wind-energy systems, fuel cells or geothermal heat pumps. More information is available on the IRS' web site.
If you're not making such large changes to improve your home's energy efficiency, you may still qualify for certain tax credits for 2013. Click here for more information.
To qualify, you must install certain types of equipment, such as solar panels, solar water heaters, wind-energy systems, fuel cells or geothermal heat pumps. More information is available on the IRS' web site.
If you're not making such large changes to improve your home's energy efficiency, you may still qualify for certain tax credits for 2013. Click here for more information.
Saturday, November 30, 2013
JP Morgan Chase Settles Toxic Mortgage Claim for $13 Billion
Recently, JP Morgan Chase finally settled a lawsuit alleging that they had sold bonds backed by "toxic" residential mortgages between 2005 and 2008, and misled investors in the process. The settlement amount, $13 billion, includes a $2 billion fine paid to the Department of Justice ("DOJ").
Additionally, a portion of the funds will be used for homeowner relief. Specifically, $500 million are earmarked for loan modifications, and $1.5 billion are meant to be used for principle reductions. $2 billion are set aside to forgive the principal balances on homes that are vacant but are not foreclosed yet, to demolish deserted homes, and to assist low and medium-income borrowers who are trying to finance a purchase. $100 million is coming to Illinois, and other states will divvy up close to $1 billion. The bank has until 2017 to complete the delivery of relief to homeowners and borrowers.
Much of the rest of the money will go to the various regulatory agencies involved, such as state attorney general offices and the Federal Housing Finance Agency, among others.
According to the DOJ, JP Morgan Chase repeatedly misled investors and sold them loans, even when the loans did not meet internal guidelines. The DOJ has insisted that the settlement does not relieve the bank's employees of wrongdoing or potential criminal actions.
Additionally, a portion of the funds will be used for homeowner relief. Specifically, $500 million are earmarked for loan modifications, and $1.5 billion are meant to be used for principle reductions. $2 billion are set aside to forgive the principal balances on homes that are vacant but are not foreclosed yet, to demolish deserted homes, and to assist low and medium-income borrowers who are trying to finance a purchase. $100 million is coming to Illinois, and other states will divvy up close to $1 billion. The bank has until 2017 to complete the delivery of relief to homeowners and borrowers.
Much of the rest of the money will go to the various regulatory agencies involved, such as state attorney general offices and the Federal Housing Finance Agency, among others.
According to the DOJ, JP Morgan Chase repeatedly misled investors and sold them loans, even when the loans did not meet internal guidelines. The DOJ has insisted that the settlement does not relieve the bank's employees of wrongdoing or potential criminal actions.
Wednesday, November 27, 2013
Chicago Area Homes Becoming Less Affordable!
Every quarter, the National Association of Home Builders, in conjunction with Wells Fargo, calculates the "home affordability index". The index calculates the median income of families in a given area, and compares it with the median home price in that same area.
For example, for the third quarter of 2013, the home affordability increase for the Chicago area calculated a $73,400 median income and a $210,000 median home price. Based on these figures, only approximately 64% of homes sold in the Chicago area were affordable to families earning the median income. Interestingly enough, in the second quarter of 2013, nearly 71% of Chicago area homes were affordable to the median-income buyer. The latest figures represent quite a drop just over the last three months.
What's causing this drop? Well, most probably it's rising home prices and increased interest rates. Home prices are increasing faster than wages do. Although the winter months are usually the slowest in the real estate market, this year prices are expected to continue to increase regardless. If you're in the market to buy, don't dawdle!
For example, for the third quarter of 2013, the home affordability increase for the Chicago area calculated a $73,400 median income and a $210,000 median home price. Based on these figures, only approximately 64% of homes sold in the Chicago area were affordable to families earning the median income. Interestingly enough, in the second quarter of 2013, nearly 71% of Chicago area homes were affordable to the median-income buyer. The latest figures represent quite a drop just over the last three months.
What's causing this drop? Well, most probably it's rising home prices and increased interest rates. Home prices are increasing faster than wages do. Although the winter months are usually the slowest in the real estate market, this year prices are expected to continue to increase regardless. If you're in the market to buy, don't dawdle!
Sunday, November 24, 2013
Energy Tax Credit Deadline is Soon!
If you have made any energy-efficient home improvements since 2006 and have not claimed a tax credit of $500 or more for them already, you may be eligible for a tax credit of up to $500 for improvements made before the end of 2013. The types of items that qualify are listed below:
1) Up to $300 in materials and labor for some energy-efficient electric water heaters and heat pumps, central a/c units, and biomass stoves.
2) Up to $150 for certain energy-efficient propane, natural gas, or oil furnaces and boilers.
3) Up to 10% of the cost, excluding installation, of some energy-efficient insulation, doors and skylights, and certain metal and asphalt roofs.
4) Up to 10% of the cost up to $200 only, excluding installation, of certain energy-efficient windows.
You will need your receipts and also manufacturer documentation, so keep the paperwork for when you file your taxes!
1) Up to $300 in materials and labor for some energy-efficient electric water heaters and heat pumps, central a/c units, and biomass stoves.
2) Up to $150 for certain energy-efficient propane, natural gas, or oil furnaces and boilers.
3) Up to 10% of the cost, excluding installation, of some energy-efficient insulation, doors and skylights, and certain metal and asphalt roofs.
4) Up to 10% of the cost up to $200 only, excluding installation, of certain energy-efficient windows.
You will need your receipts and also manufacturer documentation, so keep the paperwork for when you file your taxes!
Monday, November 11, 2013
Appellate Court Strictly Interprets Notice Provisions of Property Tax Code
In a case decided just last week on appeal in Illinois, In re Application of the County Treasurer, 2013 IL App (1st) 130103 (November 8, 2013) Cook Co., 5th Division, the potential purchaser of a tax deed lost the property because of a two-day discrepancy in the notice he provided.
In August of 2008, the appellant bought delinquent real estate taxes from 2006 for real estate located in Cook County. In December of that same year, the appellant filed a copy of it's Section 22-5 notice, stating that the property owner had until February 12, 2011 to redeem the taxes. February 12, 2011 happened to be a Saturday.
No one attempted to redeem the taxes, and in August of 2011, the appellant petitioned for a tax deed. Even though all parties were served, no one appeared in court. Regardless, in July of 2012, the appellant's tax deed petition was denied because the final date of redemption was listed as a Saturday on the Section 22-5 notice, instead of the following Monday, February 14, 2011. Under Illinois law, when calculating time frames, if the last day to perform is a Saturday, Sunday or a holiday, the time frame is extended to the next business day.
The appellant filed a motion for reconsideration, was denied, and eventually appealed on various grounds and lost at appeal as well. After extensive discussion, the bottom line is this -- if your Section 22-5 notice puts the last day on a weekend or holiday, your notice is deficient. Period. The court felt that the burden of proper notice was a minimal one for the appellant to meet.
In August of 2008, the appellant bought delinquent real estate taxes from 2006 for real estate located in Cook County. In December of that same year, the appellant filed a copy of it's Section 22-5 notice, stating that the property owner had until February 12, 2011 to redeem the taxes. February 12, 2011 happened to be a Saturday.
No one attempted to redeem the taxes, and in August of 2011, the appellant petitioned for a tax deed. Even though all parties were served, no one appeared in court. Regardless, in July of 2012, the appellant's tax deed petition was denied because the final date of redemption was listed as a Saturday on the Section 22-5 notice, instead of the following Monday, February 14, 2011. Under Illinois law, when calculating time frames, if the last day to perform is a Saturday, Sunday or a holiday, the time frame is extended to the next business day.
The appellant filed a motion for reconsideration, was denied, and eventually appealed on various grounds and lost at appeal as well. After extensive discussion, the bottom line is this -- if your Section 22-5 notice puts the last day on a weekend or holiday, your notice is deficient. Period. The court felt that the burden of proper notice was a minimal one for the appellant to meet.
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