National Assn. Of Realtors To Fight Budget Item

 Letter from NAR President:

 

	Dear Fellow REALTOR®,   You may have seen news reports about President Obama’s budget proposal that was released today at 11:30 AM Eastern Time. A small section of the sweeping budget plan has the potential to become a major impediment to a recovery in real estate markets across the nation. NAR is 100% opposed to the provision that modifies the Mortgage Interest Deduction and is prepared to use its formidable array of resources against its enactment. As currently drafted, the plan changes the Mortgage Interest Deduction by reducing the amount of mortgage deductibility on families earning over $250,000. This proposed change in the Mortgage Interest Deduction will result in further erosion of home prices and home values. If this proposal is enacted it will lead to a new round of price depreciation, will cause greater distress on the balance sheets of banks as the collateral value of mortgage backed securities declines. A second credit crisis could emerge before the first one is resolved. As you read this NAR is launching a multiphase plan of action to eliminate this provision from the budget plan. In the next 24 hours, NAR will be expressing our concerns directly to President Obama, to all members of the United States House of Representatives and the Senate, placing advertisements in the publications read by Washington, DC decision makers. Additionally, NAR will be forming a coalition with other groups affected by this proposal. This communication is the first part of our response, we will continue to update you as the situation and events warrant. Sincerely, Charles McMillan, CIPS, GRI 2009 NAR President

Good News for Buyers

According to a report today from the National Associaton of Realtors, Fannie Mae has just agreed to lift the cap of 4 investment properties eligible for loans and raise it to 10.

NAR also reports that a component of the Treasury/Obama stimulus packages is a buyer tax credit that has been increased to (up to) $8,000 with NO payback [a true credit].

Will investor purchases qualify for the $8,000 tax credit?

No. The credit will be available only to first-time homebuyers.

Scams target those facing foreclosure

By Steve Tarter

GATEHOUSE NEWS SERVICE

Posted Jan 28, 2009 @ 06:55 AM

Last update Jan 28, 2009 @ 08:13 AM

PEORIA —

Homeowners facing foreclosure have one more thing to worry about: Getting “help” from scam artists.

“This is a relatively new trend affecting homeowners struggling with their mortgages,” said Jeff Telling, central Illinois regional manager for Chicago-based Family Credit Management.

“Many for-profit companies are contacting delinquent consumers. Our Rockford office even reported hearing from consumers who have had these companies knocking on the front door of consumers who were in preforeclosure,” Telling said.

“We’re hearing about scams all over the country, from California to Kansas to Florida. The sad thing is that people are paying money for assistance that, in most cases, is available at no cost to the consumer. Consumers need to know there is help available and they should never pay for this type of assistance,” Telling said.

So far, Illinois Attorney General Lisa Madigan filed lawsuits against 22 so-called mortgage “rescue” companies.

“Consumers need to resist offers of a rescue. These scam artists prey on desperate homeowners who are struggling to save their homes,” she said.

One type of rescue fraud scheme involves scam artists who convince home owners to sign over the title of their home under the promise that the home will be signed back over to the original owner at a later date. “This is especially devastating to homeowners who often have their entire life savings wrapped up in their home’s equity,” Madigan said.

The predominant foreclosure “rescue” scams generally come in three varieties, according to the San Diego-based Housing Opportunities Collaborative:

Title transfer: The most dangerous scheme is the “bailout” that never quite works. This scenario includes various schemes in which the homeowner surrenders title to the house in the belief that within the deal, they’ll be able to remain in the home as a renter, and eventually buy it back. Another scam convinces the homeowner to transfer title to a “federal land grant” with the false promise that this prevents the lender from foreclosing.

Bait and switch: In the bait-and-switch scheme, the homeowner fails to realize they are surrendering ownership of the house in exchange for a “rescue.” Many homeowners later insist that they believed they were only signing documents for a new loan to make the mortgage current.

Phantom help: The third scheme could be called “phantom help” because the “rescuer” charges outrageous fees, either for light-duty phone calls and paperwork the homeowner could have easily done, or on a promise of more robust representation that never happens.

Many scammers use “affinity marketing” — that is, using Spanish-speakers to market to Spanish-speaking consumers, senior citizens to senior citizens, and other matches, according to LOLO, a Berkeley, Calif. legal aid group.

LOLO offers the following tips for those who believe they may be losing their home:

* Stay in touch with your mortgage lender. Contrary to what a foreclosure scammer will tell you, you should contact your lender the minute you have trouble paying.

* Get full information about the foreclosure process. Your best offense in saving your home, and your best defense in preventing scams, is to learn about and understand the foreclosure process.

* Never make a verbal agreement. Always get everything in writing.

* Seek help from a legitimate foreclosure counseling agency. See HUD’s Web site at www.nfcc.org for HUD-approved counseling agencies.

Steve Tarter can be reached at 309-686-3260 or starter@pjstar.com.

Rental Floss

Do You Screen For Undocumented Immigrants?

Landlords have no legal obligation to check an applicant’s legal immigration status, and I have never done so. I am not in the immigration enforcement business, and legal resident status is not on my list of criteria.

On the other hand, there isn’t any reason why you couldn’t require your tenants to be legal US residents if that is your wish. If you rent to tenants receiving Section 8 rental assistance, you do want to ensure your tenants are legal. Here’s a true story:

Section 8 won’t pay for undocumented immigrants

Landlord rented house for $1,045 to mother and three children and signed Section 8 HAP contract.

One month after the family moves in, Section 8 discovered the mother was an undocumented immigrant. The children are legal, though.

Section 8 notified landlord that his HAP assistance payment will be reduced to $750 as of March 1st, since they may only provide housing assistance for legal US residents.

Moral: If you accept a Section 8 tenant, do whatever is necessary to ensure the tenants are legal US residents.

Don’t rely on Section 8 to make this determination.

Although he would like to, the landlord in question can’t evict the tenant right now, since she hasn’t violated the lease and her rent payment is current.

What could landlord do differently?

Landlord’s Rental Application could include the following question:

Are you a legal resident of the United States?

Landlord’s Rental Agreement could also state that lying on the application is grounds for eviction.

Problem solved. Now landlord has grounds for eviction.

10 New Rules for 2008 Taxes

10 New Tax Rules for 2008 Taxes

01-20-2009

With each new year comes a new batch of tax rules and miscellaneous changes to the laws that taxpayers need to be aware of. There’s no denying that the tax code in the United States is incredibly complex, and there are tons of changes. But here are some of the rule changes that are likely to affect the average consumer:

Recovery Rebate Credit – If you weren’t eligible for an economic stimulus payment in 2008, you might still be able to get that money. The initial payments were based on your 2007 income, and if your income was too low or too high, you may have missed out. You can now use your 2008 income to collect, and the IRS is offering help in calculating whether you qualify.

AMT Exemption Increased – The Alternative Minimum Tax (AMT) is a law that was created to make sure high income earners didn’t get out of paying income taxes. Now this rule is affecting more middle-income taxpayers, but the “bailout bill” upped the exemption amount for 2008 to spare more taxpayers from the AMT for one more year. The 2008 exemption amounts are $33,750 for individuals and $45,00 for married filing jointly. Don’t worry if your income is around those figures, however. Those numbers are part of a much larger (and complex) calculation! . You pr obably only need to worry about AMT if you’re single and making more than $100,000, or married and making more than $175,000. (These are just rough guidelines, however. So if you’re anywhere close to that range you should speak to a tax preparer.)

First Time Homebuyer Credit – If you bought your first home between April 9, 2008 and June 30, 2009, you might qualify for a new credit. Taxpayers can get up to $7,500 from the federal government, which has to be paid back over 15 years at a rate of $500 per year. It amounts to an interest-free loan from Uncle Sam that can help you get your first house. More on this credit can be found in this article.

Tax Relief for Midwest Disaster Areas – If you lived in certain Midwest states that were affected by severe storms, tornadoes or flooding that happened between May 19 and August 1, 2008, you can receive special tax breaks. The rules include reduced restrictions on casualty loss deductions and charitable contribution deductions. There is also an exemption available if you provided housing to a victim of these disasters. A list of states and counties that qualify for this tax relief is found here.

Increased contribution limits for IRAs – The tax rules permit taxpayers to contribute to traditional IRAs and Roth IRAs if their income falls within certain parameters. If your income is too high, you are limited in these contributions. All of the limits increased for 2008, which means taxpayers with higher income might still be able to contribute. A taxpayer can contribute either $5,000 or an amoun! t equal to their taxable compensation (whichever is smaller).

Standard Mileage Rate Changed – The standard mileage rate for business use of your vehicle was 50.5 cents per mile for the first six months of 2008, and 58.5 cents per mile for the rest of the year. The rates also changed for miles driven for medical reasons or charitable purposes.

Capital Gains Taxes Lowered – Those with lower incomes will benefit from a reduction in the lowest capital gains rate. The formerly 5% rate for married taxpayers with income under $65,100 and single taxpayers with income under $32,500 has now been reduced to 0%.

Kiddie Tax Changes – The rules related to investment income of children have changed to include students between ages 18 and 24 who are not financially reporting themselves. A child with investment income greater than $1,800 must be taxed at the parent’s tax rate to avoid shifting of investments to children to escape income taxes.

Required Minimum Distributions from IRAs – Retirees with tax-deferred retirement funds such as 401(k)s and IRAs are required to take minimum amounts out of those funds once they reach age 70 ½ . The government requires this because those amounts taken out are taxable on withdrawal, and it ensures the IRS gets something from retirees. Because of the stock market troubles, RMDs are suspended for 2009. That doesn’t help when preparing 2008 taxes, but is important to note for planning for 2009.

Free Tax Help – Low income and elderly taxpayers have several options for free tax help. The most extensive option is the Volunteer Income Tax Assistance program. Qualified tax preparers volunteer their time to help answer tax questions and prepare basic tax returns. Taxpayers can also get assistance by calling the IRS or visiting one of their walk-in centers.

(Thanks to my friend Dorothy Milakovic for forwarding this article to me.)

Landlord Safety

FEBRUARY LCPIA MEETING TOPIC: LANDLORD SAFETY

WHERE:
American Legion Gurnee Post #771
Located 1 block east of Rt. 21 at Grand Avenue in Gurnee.

WHEN:
February 10, 2009
6:30 p.m. (Registration 6:00 to 6:30)

Aug 24, 2008 | CHICAGO | The 77-year-old South Side landlord who was set on fire last week, allegedly by a 28-year-old former tenant, has died.

Harlan Hayes was pronounced dead at 12:15 a.m. Sunday, according to a spokesman for the Cook County Medical Examiner’s office.

Police responding to a fire about 2 a.m. Tuesday found Hayes screaming for help on a sidewalk in the 6300 block of South Ellis Avenue.

Hayes told police he had answered an early knock at his door at 6319 S. Ellis Ave. when a former tenant drenched him with gasoline and lit him on fire.

Hayes was initially taken to University of Chicago Hospitals in critical condition with third degree burns to more than 90 percent of his body. Hayes was doused with an accelerant and lit on fire inside his building, police said.

A tenant who called 911 after seeing smoke coming from Hayes’ apartment said Hayes had asked the alleged arsonist to move because of illegal activities in the apartment. He would not specify the type of illegal activities.

The tenant said he thought he heard noises in the former tenant’s apartment just before Tuesday’s incident.

The former tenant, Donald Hardy, 28, of the 800 block of East 65th Street, was charged Friday afternoon with attempted first-degree murder.

Hardy turned himself into Grand Crossing District police on Thursday after realizing he had been identified as a person of interest, police said.

A judge denied bond for Hardy during a Saturday morning hearing.
(Source: Chicago Sun-Times)
——

Like it or not, landlords engage in high-risk activity all the time. From working alone in vacant units to meeting strangers at all hours, it’s a wonder we aren’t victims of violence more often.

Join us February 10 and learn how to take precautions to avoid becoming a victim.

LCPIA member Mel Metts has adapted a presentation from the Arlington Heights Police Department that was created for Realtors.

You will learn how to protect yourself when showing vacancies, minimize risk in your daily activities, and reduce chances of identity theft on the Internet.

Right or Wrong?

By Mel Metts

Right or Wrong?

Don’t shovel your sidewalks! If you don’t shovel, you can’t be sued if someone slips and falls; but if you do shovel, you are liable.

Wrong!

Illinois law protects you from liability.

CIVIL IMMUNITIES [Illinois Compiled Statutes]

(745 ILCS 75/) Snow and Ice Removal Act.
(745 ILCS 75/1) (from Ch. 70, par. 201)
Sec. 1. It is declared to be the public policy of this State that owners and others residing in residential units be encouraged to clean the sidewalks abutting their residences of snow and ice. The General Assembly, therefore, determines that it is undesirable for any person to be found liable for damages due to his or her efforts in the removal of snow or ice from such sidewalks, except for acts which amount to clear wrongdoing, as described in Section 2 of this Act.
(Source: P.A. 81-591.)

(745 ILCS 75/2) (from Ch. 70, par. 202)
Sec. 2. Any owner, lessor, occupant or other person in charge of any residential property, or any agent of or other person engaged by any such party, who removes or attempts to remove snow or ice from sidewalks abutting the property shall not be liable for any personal injuries allegedly caused by the snowy or icy condition of the sidewalk resulting from his or her acts or omissions unless the alleged misconduct was willful or wanton.
(Source: P.A. 81-591.)

Accept Credit and Debit Cards From Your Tenants

By Mel Metts

Think that accepting credit cards from your tenants is a big hassle? Times have changed, and now anybody with a bank account and e-mail address can accept plastic. It’s not difficult.

PayPal changed all the rules. Before PayPal, vendors faced multiple hurdles if they wanted to accept credit and debit cards. No more!

First, let’s clear up a common misconception: Customers don’t need a PayPal account to pay via PayPal. PayPal accepts all major credit and debit cards, and their fee is approximately 3% of the transaction.

>>> Full Story 

 

 

 

2000 Readers With Nothing to Say

So this blog has had more than 2,000 hits so far.

Yet — except for spammers, precious few of you have replied to any of my posts.

How about this: If you agree with me, let me know. If you disagree, let me know. If you can shed more light on an issue, let me know.

Comment! Please!

(Humor me)

Can I Find REO Bargains in Lake County?

The other day I put together a list of foreclosed homes that turned out to be pretty good deals for their buyers. All sold for $110k or less.

All of the homes on the list would also make good rental properties; they are in desirable locations and should garner sufficient rents.

For a look at this list, go here.