Thursday, April 15, 2010

California Governor Gave a Huge Tax Break to Californians by Signing Bill into Law


Distressed homeowners no longer have to pay California state income tax on debt forgiven in a short sale, foreclosure, or loan modification. Enacted into law yesterday, Senate Bill 401 generally aligns California's tax treatment of mortgage debt relief income with federal law. For debt forgiven on a loan secured by a "qualified principal residence," borrowers will now be exempt from both federal and state income tax consequences. The existing federal exemption is for indebtedness up to $2 million, whereas the new California exemption is for indebtedness up to $800,000 and forgiven debt up to $500,000.

"Qualified principal residence" indebtedness is defined as debt incurred in acquiring, constructing, or substantially improving a principal residence. It includes both first and second trust deeds. It also includes a refinance loan to the extent the funds were used to payoff a previous loan that would have qualified.

The tax breaks apply to debts discharged from 2009 through 2012. Californians who have already filed their 2009 tax returns may claim the exemption by filing a Form 540X amendment.

Taxpayers who do not qualify for the above exemptions (e.g., second home or rental property) may nevertheless be exempt under other provisions. Most notably, taxpayers who are bankrupt are exempt from debt relief income tax. Also, taxpayers who are insolvent are exempt from debt relief income tax to the extent their current liabilities exceed current assets.

For more information about mortgage forgiveness tax consequences, go to California Franchise Tax Board's Mortgage Forgiveness Debt Relief Extended webpage and the Internal Revenue Service's Mortgage Forgiveness Debt Relief Act and Debt Cancellation webpage. The full text of Senate Bill 401 is available at

Sunday, November 01, 2009

Odes to the Home Equity Loans: Homeowners are Asking What They Should Do

The rush to help homeowners pull out the equity out of their homes is long gone. Bank lenders are becoming more and more conservative.

The market for such credit lines, which practically shut down as home prices tumbled, remains tight as a drum despite signs of life in the rest of the home loan market. And offers that let you pay only the prime rate or just above that benchmark are long gone.

According to various reports including the following from LAtimes, one can start seeing the impact on families all over the country:

"The days of lenders falling all over themselves to help you empty the equity out of your home aren't coming back any time soon," said Keith Gumbinger, vice president at loan data tracker HSH Associates.

Even for homeowners with plenty of home equity still available, "access to it is harder to come by," Gumbinger said. "You need to be a much higher-quality borrower now. And if you can get it, the terms are going to be a lot less attractive."

Before the housing boom, home equity credit lines were a cheap way for homeowners to renovate their property, pay college tuition or buy a car. During the boom, they also were often used to make a down payment on a home or to finance a vacation or other indulgences.

Thursday, January 08, 2009

"Not Totally Safe but Secure Job with LAPD": LAPD Recruiters Want a Few Good Men and Women to Protect and Serve! Are you One?

"Not Totally Safe but Secure Job with LAPD": LAPD Recruiters Want a Few Good Men and Women to Protect and Serve! Are you One?

There has been a surge of applications for Los Angeles police officer jobs from September, October, November and December. Recruiters are taking advantage of the sour economy to offer good jobs to all willing to protect the surrounding communities. The message is simple these days, "Being a police officer might not be completely safe, but it is relatively secure..."

These times of economic uncertainty are causing many people apply for the police officer jobs. On the pages of the Daily News and various career websites, the LAPD is always looking for a few good men and women to protect and serve the LA communities. "Never have to face a layoff again! Start your new career today!"

At at a time when various police stations all over the nation are cutting down in order to balance their budget because of lower property taxes revenue and high defaults, LAPD comes out to offer layoff-proof jobs. The question is whether the hundreds and thousands of applicants can cut and survive long enough to wear the LAPD uniform. The statistics are grim, "only one in 10 or 11 applicants ends up in uniform."

It seems that there is a current push to hire as many people as possible in order to meet the 10,000-officer force by the Fall as requested by Mayor Antonio Villaraigosa. Staffing standards require that the department increase its officer ranks.

Officer I jobs promise starting salaries of $56,522 to $75,878 depending on education and experience.

Hurry up, people, put in your application now!


layoff-proof job, LAPD beat, Career, Daily News, police academy, police officers, mayor Antonio Villaraigosa, attrition, retirement.

Wednesday, October 08, 2008

Bank of America Offers Mortgage Relief

Facing a lawsuit over the deceptive mortgage practices, Bank of America Corp. is agreeing to pay more than $8 billion to modify hundreds of thousands of loans to keep people from losing their homes. This announcement from the N.C.-based Bank of America will give relief to a lot of homeowners.

Hope For Homeowners Program Designed to Provide Aid to Distressed Borrowers

The government starts the mortgage loan swap which lets troubled homeowners stay in their homes. Lenders, rather than borrowers, will decide whether to participate in the program, which requires them to take a loss on the initial loan. The $300 billion, three-year program is designed to help borrowers who owe more on their loans than their homes are worth. To qualify, borrowers must be spending more than 31% of their income on mortgage payments. Loans made this year are excluded, except for those completed on Jan. 1. Borrowers must have made six months of payments on their loans

Here is the gist of the act:

The “HOPE for Homeowners Act of 2008" creates a new program within FHA to back FHA-insured mortgages to distressed borrowers. The new mortgages offered by FHA-approved lenders will refinance abusive loans at a significant discount for homeowners facing difficulty meeting their mortgage payments.

The program is built on five principles:
Long-term Affordability. The program is built on the idea, expressed by Federal Reserve Chairman Bernanke, that creating new equity for troubled homeowners is likely to be a more effective way to avoid foreclosures. New loans will be based on a family’s ability to repay the loan, ensuring affordability and sustainable homeownership.
No investor or lender bailout. Investors and/or lenders will have to take significant losses in order to benefit from the proceeds of the loans refinanced with government insurance. However, these losses would be less than the losses associated with foreclosure.
No windfall for borrowers. Borrowers will share their new equity and future appreciation equally with FHA. Borrowers will pay for the FHA insurance.
Voluntary Participation. This will be a voluntary program. No servicers will be compelled to participate.
Restore confidence, liquidity, and transparency. Credit markets are fearful and frozen in part because banks and other financial institutions do not know what their subprime mortgages and related securities are worth. The uncertainty is forcing lenders to hoard capital and stop the lending necessary for economic growth. This program will create certainty and get markets flowing again.

Program Administration. The new program will be overseen by a Board made up of the Secretary of HUD, the Secretary of the Treasury, and the Chairman of the Federal Deposit Insurance Corporation (FDIC). The Board will have the authority to develop standards within the framework of the legislation.

Eligible Borrowers. Only owner-occupants will be eligible for the new FHA-insured mortgage. No investors or investor properties will qualify. The Board will establish other eligibility criteria, including criteria designed to determine whether borrowers can afford their existing loans.

New Loan Amount. The size of the new FHA-insured loan will be determined by:
The lesser of the amount the borrower can afford to repay, as determined by the current affordability requirements of FHA, taking into account the amount of income available to the family after basic expenses are paid (residual income); or,
The amount of the existing loan minus a discount established through an auction process established by the Board. The auction process will allow for bulk refinances, at a discount, of eligible loans. The federal government will not take possession of the mortgages.
The Board will have flexibility to change the affordability standards to suit circumstances.
In either case, FHA will not insure more than 90% of the current value of the home. Loans must be 30-year, fixed rate loans.

Equity Sharing. In order to avoid a windfall to the borrower created by the new 90% loan-to-value FHA-insured mortgage, the borrower must share the newly-created equity and future appreciation equally with FHA. This obligation will continue until the borrower sells the home or refinances the FHA-insured mortgage. Moreover, the homeowner’s access to the newly created equity will be phased-in over 5 years.

Existing Subordinate Liens. Before participating in this program, all subordinate liens must be extinguished. This will have to be done through negotiation with the first lien holder.

Qualified Safe Harbor. The legislation provides servicers with an incentive to participate in the program by offering a safe harbor against legal liability.

Funding. The Act provides for $20 billion in credit subsidy, which is expected to insure new, affordable loans that refinance approximately $400 billion in troubled mortgages.

Program Sunset. The program sunsets at the end of 2012. Any remaining funds, and future collections resulting from appreciation of FHA-insured mortgages made under this program, will be returned to the government.

New Foreclosure Prevention Affordable Housing Goal for Fannie Mae and Freddie Mac. In addition to the FHA option, the legislation requires the Secretary of HUD, together with the Secretary of the Treasury and the Director of OFHEO, to establish a new Foreclosure Prevention goal for Fannie Mae and Freddie Mac. The two enterprises would be required to purchase eligible loans at a discount, and write down those mortgages to help the families keep their homes. Mortgages would have to be written down according to the same criteria as loans eligible for FHA insurance under this legislation – based on ability to pay, taking residual income into account. OFHEO would be given the authority to require the enterprises to raise additional capital commensurate with the additional risk this new goal may pose.

Monday, October 06, 2008

Financial Difficulties Lead Father to Kill Wife, Mother-in-law and Three Children in California Gated Community

Financial Crisis Caused Murder-suicide in Paradise

Former PricewaterhouseCoopers and Sony Pictures employee went a killing rampage after being unemployed for several months. The unemployed accounting industry worker became despondent and withdrawn. Living in an upscale, large home in a California gated community, the father could not take it any longer. Watching the credit crunch or contraction and the tight economic market and the changing of Wall Street business model, he realized that his chances of getting a job were almost nil. He could not count on his master's of business administration in finance to get him a job. Ill-advised, he decided to take matters in his own hand. He unleashed all his demons on his unsuspecting family.

Police investigating the case in the San Fernando Valley neighborhood of Porter Ranch found a handgun which was purchased on Sept. 16, 2008. They recovered where the father's body was located. The man used it to kill his 39-year old wife, 70-year-old mother-in-law, and his sons aged 19, 12, and 7. It is worth nothing that the family did not own the home.

The father created hell for his wife and his children as he went from room to room to commit these killings. In his suicide letters, he attests to some financial difficulties, takes responsibility for the taking of his family members and himself as a result of these financial hardships. The financial dealings and situation of his household overwhelmed him.


Sorrento Pointe, gated community, Santa Susana Mountains, Porter Ranch, pricewaterhousecoopers, Sony Pictures, large home, financial problems, handgun, San Fernando Valley, suicide letters

Tuesday, August 19, 2008

Housing Crisis Fueled by Inflated Home Appraisal: Who are Perpetrators and Victims? The Wild West of The Housing Boom Years, Devastation and Impact.

Housing Crisis Fueled by Inflated Home Appraisal: Who are the Perpetrators and Victims?
The Wild West of The Housing Boom Years, Devastation and Impact.

Many industry insiders just knew that it was just a matter of time. What goes up will have to come crashing down. Indeed, soaring home prices were just setting the stage for this country's greatest housing meltdown. Many onlookers could see that the high home sales were just a game. They were not fair deal. It was clear that the real estate industry was starting to crumble from the inside. Rogue appraisers, real estate agents and bad real estate brokers were running the show. They were making money left and right on the ignorance of unsuspecting homeowners, buyers and sellers. The bankers, mortgage companies and real estate investors appeared ready to make money along the way. Very few people raised their little fingers. Business was good. Since 2005, many potential buyers have been kept out of the market. They were priced out by speculators who flew in and flew out of hot deals and markets all over California. Those who were not too greedy amassed a fortune. Then, they moved this money to other shores or diversified.

Many appraisers were being pressured by all sides to inflate home values. They sometimes quoted prices only aimed at supporting loans that are more than the buyers can truly afford. According to former acting director at the Federal agency charged with monitoring the appraisal industry, Marc Weinberg, the system was completely broken. Since the height of the housing boom (which was fake or based solely on borrowed money), many violations could have constituted the red flags. According to a recent AP investigation, there were complaints that were lodged at the agency, but the lack of agents prevented it from investigating. Since the complaints were uninvestigated for many years, many of the appraisers who were accused of inflating prices continued to commit fraud in the industry.

What are the causes of the current housing crisis? Many will say greed, easy money-making tricks with no regards to the future

Here is a list of some of the perpetrators and victims: They were lenders who allowed people with spotty credit to buy homes with little or no money down, mortgage brokers who focused on selling loans without regard to the borrowers' ability to repay and investment bankers who bought and sold risky mortgage-backed securities. Failure to be able to monitor the real estate appraisals also contributed to the problems we are seeing now. Foreclosures are rampant and continue to destroy communities.

How does the process work? Once an appraiser receives an order from a real estate agent, lender, or mortgage broker to inspect a property, he or she is supposed to use some measurable tools of the trade. He will use the physical inspection of the home and comparable sales in the area to develop an estimated value for the property. What happens when the values of the other properties are not real? The figure the appraisers get will be used by banks to set the home's value as collateral for the mortgage loan. That is why it makes sense for the appraisers to come up with a value free of any outside pressure. In many cases, the appraisers were influenced by owners, buyers and sellers and the rest of the players to produce a number. They know that they are supposed to generate a value free of any outside pressure. Such was not the case in many of the cases investigated by AP. Some appraisers did complain to federal and state agencies about the fraudulent inflation of property values. Oftentimes, appraisers would put each other down in front of the buyers.

Saturday, August 02, 2008

Are The New Provisions of Housing-Mortgage Relief Bill For You?

How many Americans will benefit from the housing-mortgage relief bill signed by President Bush? Well, according to many analysts, not too many people will be able to stay in their house and see their bills paid even when loan servicers and mortgage debt investors did everything they could. Let alone that these people are not required to do anything if they do not want to.

Find out whether you can get something done for your particular case.

The housing bill that Congress passed Saturday and sent to President Bush would:

_Give the Federal Housing Administration $300 billion in new lending authority and relax standards to provide affordable, fixed-rate mortgages to an estimated 400,000 debt-ridden homeowners. Any losses would be covered by an affordable housing fund financed by Fannie Mae and Freddie Mac, the government-sponsored companies that finance mortgages.

_Allow the Treasury Department temporary authority to lend money to Fannie and Freddie or buy their stock to avert a collapse of one or both of the mortgage giants. The authority would expire on Dec. 31, 2009.

_Create a new regulator and tighten controls on Fannie and Freddie, including power for the regulator to approve pay packages for company executives. Create a new affordable housing fund drawn from their profits. Permanently raise the limit on the loans they may buy to $625,000 in the highest-cost areas. Allow them to buy loans 15 percent higher than the median home price in certain cities.

Provide $3.9 billion in grants to the hardest-hit communities for buying and fixing up foreclosed property.

_Modernize the FHA and allow it to back loans for riskier borrowers. Permanently increase the size of loans the agency may insure _ currently set to revert to $362,790 by the end of the year _ to $625,000 in the highest-cost areas. The agency could insure loans 15 percent higher than the median home price in certain cities.

_Forbid the FHA from insuring mortgages in which the borrower's down payment is paid by the seller, beginning on Oct. 1, 2008. Place a one-year moratorium forbidding the agency from charging premiums based on the riskiness of the homeowner, until Oct. 1, 2009.

_Provide $15 billion in housing tax breaks, including for low-income housing. Give a credit of up to $7,500 for first-time home buyers who purchase residences between April 9, 2008, and July 1, 2009. Allow people who don't itemize their taxes to claim a $500-$1,000 deduction on their 2008 property taxes.

_Give states an additional $11 billion in tax-free municipal bond authority for low-interest loans to first-time home buyers, construction of low-income rental housing and refinancing subprime mortgages.

_Offer protection from investor lawsuits for mortgage holders that modify loans to borrowers who are in default or about to default.

_Provide $180 million for pre-foreclosure counseling and legal services for distressed borrowers.

Wednesday, July 30, 2008

Top-rated Foreclosure Attorneys List: Avoid Bankruptcy and Homelessness

There is a spike in foreclosure cases. Bankruptcy and foreclosure lawyers are being inundated with new cases. Web sites offering information on foreclosure are also seeing a spike of traffic.

Find a list of Foreclosure and Business Attorneys

Here is what is being reported by many of these sites:

"When the government can't help, a good lawyer sometimes can. The attorneys seeing the largest spikes in business are those who help homeowners handle foreclosures or assist banks and property owners in collecting unpaid mortgages. Eric Appleton, a foreclosure attorney in Tampa who is among the most highly rated in his field on, had more foreclosure cases in a single day recently than he had seen in a whole month last year. "People are most definitely going online to find lawyers to defend themselves against foreclosures," says Appleton, who often represents condominium associations. "It's not uncommon for us to get 10 to 15 mortgage foreclosure [cases] in a single day."

Attorney: David Leen
Law Firm: David Leen & Associates, Seattle, Wa.
Education: University of Oregon School of Law, 1971
Expertise: Represents individuals in foreclosure, predatory lending, fraud, and real estate cases

Attorney: Eric Appleton
Law Firm: Bush Ross, Tampa
Education: University of Florida J.D., 1998
Expertise: Represents Florida property owners and community associations in disputes with lenders and home owners

Attorney: Robert S. Bernstein
Law Firm: Bernstein Law Firm, Pittsburgh
Education: Duquesne University J.D., 1981
Expertise: Bankruptcy law, creditors' rights law

Attorney: David Leibowitz
Law Firm: LakeLaw Bankruptcy Center, Chicago
Education: Loyola University School of Law, 1974
Expertise: Consumer bankruptcy, mortgage defense

Attorney: Steven H. Mezer
Law Firm: Bush Ross, Tampa
Education: Stetson University College of Law, 1977
Expertise: Real estate litigation, foreclosures, collection of assessments, and deed-restriction enforcement

Attorney: Joseph Moldovan
Law Firm: Morrison Cohen, New York City
Education: Brooklyn Law School, 1982
Expertise: Bankruptcy and creditor/debtor rights

Attorney: Paul Riffel
Law Firm: Paul Riffel, Tampa
Education: Stetson University College of Law, 1982
Expertise: Bankruptcy court, family law, real estate

Attorney: Stephen W. Sather
Law Firm: Barron, Newburger, Sinsley & Wier, Houston and Austin
Education: University of Texas School of Law, 1986
Expertise: Bankruptcy law

Find a list of Foreclosure and Business Attorneys

Attorney: Jonathan Stein
Law Firm: Jonathan G. Stein, Elk Grove, Calif.
Education: McGeorge School of Law, 2002
Expertise: Consumer debt

Attorney: Mervin Waage
Law Firm: Waage & Waage, Denton, Tex.
Education: Southern Methodist University
Expertise: Bankruptcy, debt

Wednesday, July 23, 2008

Donald Trump and Pete Sampras Show The Market for Celebrity Homes is Hot

If you did not hear the news about the record amount Donald Trump made on a home bought on the cheap side when he recently sold it to a Russian billionaire for $25 million? Now read this about Pete Sampras, the famed and retired Tennis player.

Tennis star Pete Sampras has sold his Beverly Hills home after dropping the price from $25 million to $23 million, which is what the MLS says the place fetched.

Sampras recently expanded and remodeled the English manor, adding lots of detailed finishes throughout. The estate, walled and gated, sits on more than an acre of landscaped grounds that include -- surprise! surprise! -- a north-south tennis court. Did the Great One ever play on it?

The 10,376-square-foot, two-story house has five bedrooms and 12 bathrooms. There is a detached guesthouse and a separate gym. The main house includes a home theater and an office-library; the master bedroom suite has his-and-hers bathrooms.

Sylvester Stallone Bought Thousands Oaks Lakefront Property for $7.2 Million

Stallone is adding to his group of homes. He is not new to the area. He already had a property in Hidden Valley. Celebrity homes cost a lot. Just like Donald Trump, they stand to make a lot of money when selling them.

Sylvester bought a property with 500 feet of lake frontage that was listed at about $5.5 million and the adjacent lot, giving him another 150 square feet of frontage, that was listed at about $1.7 million

Celebrity Property: Who Would Like to Live in a Paparazzi's Home?

Boris Nizon, president and founder of Fame Pictures, a Santa Monica-based photo agency that chases celebrities around and then sells their pictures to fan magazines and websites, has listed his Beverly Hills home for sale at $3,495,000.

It seems that it pays well to be a paparazzi. Look at the description of his home.

The house, built in 2006, has five bedrooms and 5 1/2 bathrooms in 4,300 square feet. There is a grand foyer with a floating staircase and crystal chandelier. The gourmet kitchen has Viking appliances and granite countertops and a breakfast area that leads out to a patio and a tropical pool with rock formation waterfall and spa. There is a balcony off the master suite