New FHA Program Seeks to Return Foreclosed Borrowers to Homeownership

Housing Options & Planning Enterprises, Inc.  September 9, 2013 Real Estate Professionals,   The FHA "Back To Work" Program Is Official!   That's good news for borrowers who lost their home due to specific financial hardships but can now demonstrate they have regained their previously lost financial ground.  Housing Options & Planning Enterprises, Inc. (H.O.P.E.) * FHA Question & Answers Forms   New FHA Program seeks to return foreclosed borrower to homeownership After more than 2.5 million foreclosures, the Federal Housing Administration (FHA) is now offering a Homeownership Program that will put previously troubled borrowers back on a fast-track to the home ownership market. The new program known as "Back to Work - Extenuating Circumstance" cuts the standard three-year waiting period to only 12 months.  The list of eligible financial hardships reads like a list of housing crisis woes: · Chapter 7 or Chapter 13 bankruptcy · Deed-in-lieu · Forbearance · Foreclosure · Loan modification · Loss of income, employment or both that totaled at least 20 percent of previous earnings for at least six months - including copies of applicable termination notices or changes in employment status · Pre-foreclosure sales · Short sales Additionally, consumers must also meet other verifiable measures to participate in the program: · Proof of borrower's current income - usually W-2 forms or federal tax returns that show the desired mortgage would be affordable and sustainable; · Credit history pre and post the eligible hardship event that is free from late payments or other major credit issues, including rental housing payments and accounts delinquent by 30 days or more; · Credit score of at least 500; and · Housing counseling by a HUD-approved counselor at least 30 days but no more than six months before submitting an FHA application. For consumers meeting all of these criteria as well as other standing FHA mortgage guidelines, the Back to Work program is now available nationwide through FHA-approved lenders. Once participating lenders determine that mortgage applicants meet all eligibility and policy criteria, the same 3.5 percent minimum FHA down payment requirement will apply. Mortgage insurance and closing costs will also apply. Only one FHA program is ineligible for the Back to Work program: reverse mortgages. For more information about FHA "Back To Work" Program the Question & Answer form is link above.  Thank You,  HOPE Team HUD Approved Housing Counseling Agency. Visit Our Wedsite at HOPEfinancial.org

Down Payment & Closing Cost Help for First Time Home Buyers

This post is a list of the programs that the State of Maryland and District of Columbia offers for first time home buyers.  The link opens a new web page for the program web site.

CDA, DSELP, HK4E: The Maryland Mortgage Program

MD Home Programs Web Site: A list of all available programs in MD

Buy Suitland Program

DC Opens Doors

DC HPAP

DC Tax Abatement Program - No Link.  Just check with your title company to see if you qualify.

What's most important is having a loan officer who is well versed and has experience in offering the programs.  In addition to these programs different mortgage companies may have their own programs to offer.

You should trust that your real estate professional, ME, has referrals for loan officers that have your best interest at heart.

GOOGLE ME - Angel S.

Copies of Prior Year Federal Tax Returns and/or a Transcript

Most taxpayers will ask for a copy of their prior year tax return. In many cases, however, a transcript will provide the information they need more quickly. Transcripts provide taxpayers with a computer-created record of their tax return which includes most of the line-items as filed with the IRS, including any accompanying forms and schedules. The transcript does not reflect any changes the taxpayer, his/her representative, or the IRS made after the return was filed.

• To download Form 4506 (Request for Copy of Tax Return) or Form 4506T (Request for Transcript of Return), refer to this IRS.gov page.
• If you were impacted by a federally declared disaster, you may request a transcript by phone at 1-866-562-5227 (Hours of operation are 7 a.m. to 10 p.m., Monday-Friday, your local time - except Alaska and Hawaii which are Pacific time.) You will still need to submit Form 4506 for an actual copy of a return. Send your request to the office indicated on Form 4506. You may fax or mail your request. Write the word “Disaster” on the top of Form 4506 and your request will be expedited at no charge.
• If the taxpayer used a professional preparer to prepare the prior year's return, he/she can request a copy of the return from the preparer. If they need help locating the preparer, the Electronic Return Originator data base may help.
• To request copies in person, you may refer taxpayers to the nearest IRS Taxpayer Assistance Center (TAC).
• For practitioners only – E-services (if enrolled)

Foreclosure Prevention from Secretary Raymond Skinner

Message from the Secretary: Please Do Not Tune Us Out I worry that our "Mortgage Late? Don't Wait!" message may begin to fall on deaf ears. We've been fighting this foreclosure crisis for well over five years, now. Our Office of Community Outreach has participated in nearly 700 foreclosure prevention workshops and forums and we have reached well over one million Marylanders through direct mail, our website, advertising and our 24-hour MD HOPE Hotline. Our message has been simple: if you are late on your mortgage, do not wait to call us for help! But sometimes, when you say the same thing over and over again, the very people you need to reach will begin to tune you out. We know how scary it can be for a family to face losing their home; it is like seeing all of your hopes and dreams collapse into a nightmare. We know that a homeowner engulfed in such a nightmare can reach a point of paralysis and indecision that is a lot like being in shock. Yet there is nothing we can say that gets more directly to the point: We cannot save every home. But we can help every homeowner who contacts one of our MD HOPE counselors navigate the Byzantine foreclosure process and find the best, most sustainable solution for their family. Many families may receive mailings from DHCD in upcoming days. I urge you to open them. Those letters will contain important information about upcoming workshops and forums, designed to put you in direct contact with the resources and the information you need. In This Issue Sesame Street is Helping Families Foreclosure Mediation Works MD Foreclosures Rose - 2012 Counseling Agencies Receive $11.8 Million in Funding MD exceeds $1.1 Billion in Mortgage Settlement Relief Sec. Skinner on WEAA Radio Cong. Cummings Plans June Foreclosure Prevention Workshop Study: Homeowners Less Likely to Default if They Get Counseling S P O T L I G H T Refi Workshop Brings Homeowners and Lenders Together   More than 500 homeowners met face-to-face with lenders and nonprofit housing counselors on April 6 to get help refinancing through the federal Home Affordable Refinance Program, which is scheduled to expire on Dec. 31. Read More   F E A T U R E    S T O R I E S Sesame Street is Helping Families in Financial Trouble   Face the Tough Questions Elmo, the iconic Sesame Street Muppet asks, "Why isn't mommy at work today?" That's a tough question from a Muppet; it's even tougher from a small child whose parents are in danger of losing their home.. Sesame Street has launched the "Families Stand Together" initiative to help families find ways to address that and many other questions as even many middle class families struggle with the stress and uncertainty in the wake of one of the most prolonged economic downturns since the Great Depression. Read More Foreclosure Mediation Works -   But You've Got to Work At It    Maryland counselors have been urging families to explore mediation as a means of bringing the lender to the negotiating table to find sustainable alternatives to foreclosure. But even with mediation, the path to a solution isn't easy. "Even people working with this on a daily basis sometimes come in thinking mediation will bring about a magical transformation in the lender, but it doesn't," says Jessica Smith-Harper of Mid-Shore Pro Bono, a legal services counseling agency on the Eastern Shore. "But, in the end - in almost every case - a decision is eventually made that is favorable to the homeowner. Even if it's not exactly what they hoped for, in almost every case the result is close enough for the homeowner to be able to regroup financially and move forward. They just have to stick with it and be persistent." Read More    I N   T H E   N E W S Foreclosures Rose in 2012, But Remained Below National Average Maryland foreclosures rose nearly 20 percent in 2012 as lenders, encouraged by the state's improving housing market, finally began addressing their backlog of seriously delinquent loans. Read More Maryland Foreclosure Prevention Counseling Agencies Get $11.8M  Secretary Skinner joined Lt. Governor Anthony Brown and Attorney General Douglas Gansler to announce the award of $11.8 million over three years to the 39 foreclosure prevention counseling agencies belonging to the MD HOPE Counseling Network. Read More Mortgage Settlement Relief in Maryland Exceeds $1.1 Billion Distressed Maryland homeowners received more than $1.1 billion in relief through the National Mortgage Settlement during the first 10 months of the program, according to a progress report by the court-appointed monitor. Read More Secretary Skinner Talks About Seeking Help on WEAA Radio Secretary Skinner urged homeowners facing foreclosure to seek help as early as possible by calling the Maryland HOPE Hotline Counseling Network at (877) 462-7555. "I certainly would encourage people in financial difficulty not to go it alone in terms of working with their lender," Secretary Skinner said during an interview with hostess Deborah Owens on WEAA-FM Wealthy Radio. Read More Cong. Cummings Plans JuneForeclosure Prevention Workshop When Seventh District Congressman Elijah Cummings worked in partnership with DHCD to host his first foreclosure prevention workshop in June 2009, the response was overwhelming. Nearly 1,000 distressed homeowners showed up to meet face-to-face with counselors, lenders and pro bono attorneys during the one-day event. Read More  Study: Homeowners Less Likely to Default if They Get Counseling Before They Buy      A new study is confirming what intuition and common sense already suggested: homeowners who went through pre-purchase counseling were less likely to fall behind in their mortgage payments than those who didn't. Read More

Copyright © 2013. All Rights Reserved.

Real Estate Provisions in “Fiscal Cliff” Bill - Realtor.org

Real Estate Provisions in “Fiscal Cliff” Bill

On Jan. 1 both the Senate and House passed H.R. 8 legislation to avert the “fiscal cliff.” The bill was signed into law by President Barack Obama on Jan. 2.

Below is a summary of real estate related provisions in the bill:

Real Estate Tax Extenders

• Mortgage Cancellation Relief is extended for one year to Jan. 1, 2014
• Deduction for Mortgage Insurance Premiums for filers making below $110,000 is extended through 2013 and made retroactive to cover 2012
• 15-year straight-line cost recovery for qualified leasehold improvements on commercial properties is extended through 2013 and made retroactive to cover 2012
• 10 percent tax credit (up to $500) for homeowners for energy improvements to existing homes is extended through 2013 and made retroactive to cover 2012

Permanent Repeal of Pease Limitations for 99% of Taxpayers

Under the agreement so called “Pease Limitations” that reduce the value of itemized deductions are permanently repealed for most taxpayers but will be reinstituted for high income filers.  These limitations will only apply to individuals earning more than $250,000 and joint filers earning above $300,000.  These thresholds have been increased and are indexed for inflation and will rise over time.  Under the formula, the amount of adjusted gross income above the threshold is multiplied by 3 percent.  That amount is then used to reduce the total value of the filer’s itemized deductions.  The total amount of reduction cannot exceed 80 percent of the filer’s itemized deductions.

These limits were first enacted in 1990 (named for the Ohio Congressman Don Pease who came up with the idea) and continued throughout the Clinton years.  They were gradually phased out as a result of the 2001 tax cuts and were completely eliminated in 2010-2012.  Had we gone over the fiscal cliff, Pease limitations would have been reinstituted on all filers starting at $174,450 of adjusted gross income. 

Capital Gains

Capital Gains rate stays at 15 percent for those in the top rate of $400,000 (individual) and $450,000 (joint) return.  After that, any gains above those amounts will be taxed at 20 percent.  The $250,000/$500,000 exclusion for sale of principal residence remains in place.

Estate Tax

The first $5 million dollars in individual estates and $10 million for family estates are now exempted from the estate tax.  After that the rate will be 40 percent, up from 35 percent.  The exemption amounts are indexed for inflation.

Article from Realtor.org

Maryland Money for Veterans Still Available

FILE FOR THE HOMESTEAD TAX CREDIT BEFORE 12/31/12

COMMONLY ASKED QUESTIONS ON
THE HOMESTEAD TAX CREDIT APPLICATION 

Learn more about the Homestead Tax Credit program at www.dat.state.md.us/sdatweb/homestead.html

1.  What is the law that requires homeowners to apply for the Homestead Tax Credit?  
Legislation enacted by the 2007 session of the General Assembly requires homeowners to submit a one-time application in order to continue their eligibility for the homestead tax credit.  The homestead credit limits the amount of assessment increase on which a homeowner will pay property taxes in that tax year on the one property actually used as the owner’s principal residence.  See Section 9-105 Tax-Property Article of the Maryland Annotated Code.

2.  Why is the Homestead Eligibility Application needed?
The reason why the application process was needed is because some property owners were improperly receiving the credit on vacation homes and rented properties.  County and municipal governments were losing tax revenues needed to provide important services to their residents. 

 3.  Why should I want to submit the application?
Because of assessment increases and because of the low assessment caps adopted by the county governments, many homeowners in the State have been receiving substantial homestead credits each year on their property tax bills. View a listing of homestead caps for each local government

 4. Were property owners notified about the Homestead application requirements? 
The Department of Assessments and Taxation included the application in the Assessment Notices mailed to property owners during the regular reassessment cycle from December 2007 through December 2011. New purchasers of properties will be mailed a homestead application by the Department.5.  How do I file the Homestead Eligibility Application? 
a.  File electronically: Request an application from the Department by sending an email to Hcredit@dat.state.md.us
The application mailed out to you will contain an Access Number so you may file electronically on our site athttps://sdathtc.resiusa.org/homesteadb.   Mail the application: You may mail in the completed paper application the Department sends you. You may also print and mail the completed PDF copy of the application available on our web site.  Applications must be postmarked by December 31, 2012.

c.  Fax the application: You may also fax in the completed paper application to the Department at 410-225-9344. 
          Emailed applications will not be accepted.

Mail completed application to: Department of Assessments and Taxation Homestead Tax Credit Division 301 West Preston Street, 8th Floor Baltimore MD 21201

Contact the Homestead Division Telephone: 410-767-2165 1-866-650-8783 Fax: 410-225-9344 Email: homestead@dat.state.md.us Request an application: Hcredit@dat.state.md.us

 You can find out if you have already filed an application by looking up your property in our Real Property database

 6.  What is the Department of Assessments and Taxation doing to insure the confidentiality of my Social Security number that I am required to provide on the homestead tax credit application form?
The Department has a 30-year history of receiving and absolutely protecting confidential Social Security numbers and income tax return information received from hundreds of thousands of homeowners applying for the Homeowners’ Tax Credit Program based on income.  These same protections and additional protections will be provided to protect the confidentiality of Social Security numbers supplied on homestead tax credit applications.  For those homeowners who submit applications electronically, the Department’s website is an “encrypted” protected site that uses the unique 8-digit security "Access Number” and scrambles the individual Social Security numbers.  For those homeowners who submit a paper application, there is a series of administrative procedures and protections under federal law that the Department follows in accordance with the strict non-disclosure and safeguard activities required of the agency because of our receipt of federal income tax information.

Revised: November 2012