I just read a heart warming story about a struggling company that worked hard, crawled back from the edge, and made a record in sales. This kind of determination is what makes America great, right?
Oh wait, just a few things you should know to help put the story in context:
1) The company took ridiculous chances and mishandled everything.
2) The company recovered with everyone else’s hard earned money since they didn’t have any of their own.
3) The company isn’t repaying a dime to its creditors.
4) The company’s latest success has absolutely nothing to do with its hard work.
That doesn’t sound much like the American dream any more, but maybe that’s just how things go.
I’m talking of course about Fannie Mae. This GSE made a real mess of its books during the housing crisis, begged for government handouts, then claimed it was back on track because of
– lower delinquencies (all the foreclosures happened already, right?)
– home prices rising (no thanks to them)
– and higher sales of Fannie Mae properties (they raked in $17.2 billion NET in 2012).
Oh, and $10 billion from Bank of America. Come to think of it, that’s our money too, isn’t it? So it’s just one big circle. Or more to the point, it’s a highway that goes in a circle with only an on ramp for our cash to get in the mix.
I’m really annoyed about this one. Anyone else have something to say?
There’s a cool new term I just started hearing about. It’s the “Zombie Foreclosure.” It’s apparently when your house gets so run down it needs to feast on human brains just to keep from falling over. Then it rises from the foundations and . . .
Wait, we think we may have misunderstood. Let us try that one again.
What they’re probably talking about is when homeowners get spooked from all the foreclosure notices and flee the sinking ship. But the bank hasn’t actually foreclosed on the house. So it’s left in this weird limbo land where no one’s living in it but it’s still technically owned.
So what happens to these homes? And how many of them are there?
The answer might shock you – 2 million homes!
That’s a lot of people spooked for no reason. And you know what that tells me? It tells us that you haven’t been doing your job. If you’re watching a house crumble in your neighborhood, get taken over by squatters, be unmaintained, taxes unpaid, etc. etc. it means you missed an opportunity.
Short sale agents are supposed to be out there saving our society. You need to get in there, make sense of what’s happening to these poor homeowners, and keep the system working. I’ve trained you for a reason. Go find these people and help them. Be a servant! Bring up property values and get the housing market back on the right track.
Get to it! And leave a comment if you’ve come face to face with a zombie (home or otherwise)!
Hey Guy, here we are sharing some information on Mortgage Forgiveness Debt Relief Act:
- The Mortgage Forgiveness Debt Relief Act was introduced in Congress on September 25, 2007, and became law on December 20, 2007. This act offers relief to homeowners who would formerly owe taxes on forgiven mortgage debt after facing foreclosure. The act extends such relief for three years, applying to debts discharged in calendar year 2007 through 2009. (With the Emergency Economic Stabilization Act of 2008, this tax relief was extended another three years, covering debts discharged through calendar year 2012.)
- In the eyes of the Internal Revenue Service, housing debt that is forgiven or written off is the same as income. If the law expires, forgiven mortgage debt will be taxable. The same applies to foreclosures and to loan modifications in which principal is reduced.
- Once the lender writes off the debt, it will report the amount to the IRS. Homeowners should expect to receive Form 1099-C showing the canceled debt amount.
- All taxpayers, including those who qualify for the exemption, will get the form in the mail if they had debt canceled. Those who qualify for the exclusion will be required to file Form 982 when they file their taxes. The exemption applies only to debt related to a primary home. Mortgages on vacation and rental properties are not exempt under the act. Homeowners who did cash-out refinances and used the money for any other purpose than fixing up their house could still be on the hook for forgiven debt.
- However, after the signing of the Mortgage Forgiveness Act, amendments have been made to remove such tax liability and allow the borrower and lender to work freely together to find a common solution that is beneficial to both parties. This protection is limited to primary residences — rental properties are ineligible for relief — so consultation with a tax adviser is necessary to ensure that a borrower qualifies. The amount of forgiven mortgage debt allowed to be excluded from income tax is limited to $2 million per year.
Hope this information helps!
Weird week to report. It’s a case of the same news being looked at two totally different ways. Earlier in the week I told you how hard the rise in home prices has been on first time home buyers. It’s just getting more and more difficult for them to afford decent homes. So then what’s the other side of the story?
The fact is 25% of homeowners are underwater on their mortgages. But with values rising nearly 3.5 million borrowers are due to more out of the negative equity range. And another 6 million that could qualify for refinancing could also get back to a more normal 80%.
Sure those kind of numbers are up in the air and depend on a whole lot of things working out. But it’s hopeful at least. And that’s important to remember. Keeping up hope is the strongest way to change your situation.
If you’re unhappy with where you are then you may be in luck. But you need more than luck. You need a fire in your soul. You need a dream and a heart. I know those of you out there who have been following me all these years have those qualities. We’ve suffered through hard times, down economies, hopes and losses. But having the heart and courage to pull through is what keeps up strong. I’m proud of each of you and you should be proud of yourselves.
Have a great day. Things are looking up!
Or was that every national, heartless, money-hungry bank? I sometimes get them mixed up.
It’s not just me. The Federal Reserve gets them confused too.
Here’s the bottom line: Do you think our country can ever be fixed using one size fits all solutions? Do you think it’s fair to hold greedy corporations to the same standards as mom and pop banks?
Of course you do. Because how else can we make sure that the most money flows into the fewest hands? And from those hands a good chunk of it needs to flow into the politicians hands. It’s really a very simple equation and I’m surprised it’s taken this long for people to catch on.
The problem in our plot is that someone in the Fed has decided it’s time to come up with one set of rules for multinational banks and an entirely different set for local community banks. How they’re going to do it – even she’s not sure. Why should they be treated the same? Well, here’s the best quote, “Community bankers argue that they never engaged in the sort of lending practices that led to the financial crisis. And I think that in most cases, the evidence supports their claims.”
So don’t worry, your money is safe. And by safe, I mean, being invested in risky investments in far flung corners of the world by people who definitely do not have your best interests at heart.
I don’t think I’ll be sleeping easy tonight, but that’s become routine since the housing crash. Same with you? Or am I way off base here?