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Short Sales – Income Tax Effect

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Sellers of short sales often are not aware of the income tax effects of the short sale transaction and surprised to receive a form 1099-c.

Below is information for sellers of potential short sale transactions.

A short sale in real estate occurs when the outstanding loan against a property exceeds the market value of the property and the lender agrees to accept less than it is owed to permit the property to be sold.

The difference or shortage is an expense to the bank or lender and therefore becomes income to the individual(s) with the short sale. Put in simple terms – one’s expense is another’s income. [Read more...]

Filed Under: Buyer Tips, Real Estate News Tagged With: , , ,

Fed Rate Drops .5 Percent

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In a surprise move, the Fed slashes rates by 50 basis points today.

How will this effect interest rates on mortgages?

Federal Reserve cuts in the federal funds rate have an unpredictable impact on long-term mortgage rates. So it’s impossible to know for sure when — or even if — rates will fall as a result of the Fed’s emergency rate cut.

Adjustable rate mortgages (ARM’s) may be more sensitive to Federal Reserve rate decisions, especially if the spread between the federal funds rate and the London Interbank Offered Rate — more commonly known as LIBOR — narrows. There could be an impact due to other countries also dropping their interest rates by their central banks.

Depending on the exact nature of their mortgage, some people with ARMs may see their rate adjust downward the next time the mortgage resets.

Filed Under: Ave Marie Real Estate, Bonita Springs Florida Real Estate, Estero Florida Real Estate, Naples Florida Real Estate, Real Estate News Tagged With: , , , ,

Naples Real Estate News 07/16/08

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MORTGAGES

Local banks in Naples, Bonita Springs, Estero, through-out Florida, and the nation are telling investors that they should relax – “We’re fine.” A general fear of bank failures has made consumers wary of all financial institutions, even though most banks have no liquidity problems and very little risk.

HOMEBUYERS

There’s a dilemma for the nation’s lawmakers and millions of Americans priced out of homeownership: any rescue policy to stem foreclosures could artificially prop up home prices and perpetuate affordability problems.

FANNIE MAE AND FREDDIE MAC

Key Republicans on Tuesday expressed skepticism about an emergency Treasury Department plan to bolster troubled mortgage giants Fannie Mae and Freddie Mac, raising doubts on Wall Street about quick enactment.

MORTGAGE INSURANCE

Mortgage insurers have been tightening their standards throughout the U.S., further squeezing potential home buyers. Borrowers with less than a 20 percent downpayment now find few ways to avoid private mortgage insurance.

Filed Under: Bonita Springs Florida Real Estate, Estero Florida Real Estate, Naples Florida Real Estate, Real Estate News Tagged With: , , ,

Naples Real Estate News 07/15/08

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MORTGAGE REGULATIONS

The Federal Reserve issued new guidelines, effective Oct. 1, to curb shady lending practices. “It seems clear that unfair or deceptive acts and practices by lenders resulted in the extension of many loans, particularly high-cost loans, that were inappropriate for or misled the borrower,” says Fed Chairman Ben Bernanke.

HOUSING AID

The Fannie Mae/Freddie Mac problem will likely boost momentum for a quick final passage of Congress’ massive housing aid bill, aimed at helping some 400,000 struggling homeowners. “I’m confident we’re going to get this done,” said Senator Christopher J. Dodd. “Unfortunately, these events over the last few days have probably increased the importance of this in the minds of some.”

MORTGAGES

There were encouraging signs Monday for the Fannie Mae/Freddie Mac rescue plan, but also signs of concern; and in the wake of the IndyMac seizure by the federal government, investors worry about other big banks that might be in trouble. For homebuyers, it could mean tighter lending rules and fewer loan approvals.

OFFSHORE DRILLING

To drill or not to drill, that is the question. Louisiana, which allows drilling, gets about $1.5 billion annually in oil and gas revenue, and many Americans now want drilling to offset the high price of gasoline. Will Florida’s leaders give in to demand?

Filed Under: Bonita Springs Florida Real Estate, Estero Florida Real Estate, Naples Florida Real Estate, Real Estate News Tagged With: , , , , ,

Naples Real Estate News 07/14/08

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HOMEOWNERS INSURANCE

Start shopping around now for the best rates on homeowners insurance for your Naples, Bonita Springs or Estero residence. As the largest insurer of homes, condos and apartments in the state, Citizens Property Insurance has nearly 9,000 agents writing policies. But the insurance agents say that Citizens doesn’t pay them enough, especially in light of the heavier workload expected in February when new forms are introduced for its windstorm policies.

FHA

Starting today, homeowners trying to save their homes from foreclosure may find it easier to get federal help. FHASecure guidelines have been relaxed, expanding its eligibility standards to include borrowers with ARMS who were late on two monthly mortgage payments in the past 12 months, even if they were consecutive.

FORECLOSURES

With foreclosure rates at record highs, the Bush administration has been trying to keep people from losing their homes. But “many of today’s unusually high number of foreclosures are not preventable,” Treasury Secretary Henry Paulson said last week. “There is little public policymakers can, or should, do to compensate for untenable financial decisions.”

MORTGAGES

If Fannie Mae and Freddie Mac collapsed, it would deal a blow to the mortgage market. But the federal government unveiled a broad program yesterday to bolster the troubled mortgage giants. Both companies said they were financially sound but grateful for the confidence-building efforts.

Filed Under: Bonita Springs Florida Real Estate, Estero Florida Real Estate, Naples Florida Real Estate, Real Estate News Tagged With: , , , , ,
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