Improve My Tomorrow Coaching

A Conversation About Taxation

The time has come for a brief conversation about taxes. No way around it, if you don’t show income and pay taxes on it, it is almost impossible to qualify for a great mortgage loan. While there are a few portfolio lenders out there making loans, most of the loans being made are being sold to entities that will require seeing full sets of tax returns. With that in mind, I want to draw your attention to the fact that many people have not yet filed their 2011 tax returns as of yet.

For everyone who needs to file a tax return the deadline to file is April 15th provided the 15th isn’t a Sunday or holiday. This year that was the case so the tax deadline was extended a couple of days. Unfortunately, this wasn’t enough time for some people, largely the self-employed, who need more time to file more complex tax returns. Those people may file for and automatically receive a six month extension to get their returns into Uncle Sam and our friends at the IRS.

Bail-out or Timeout?

As a business coach to some of the finest mortgage and real estate professionals in this country, I have found the need to share these thoughts and perspectives with my clients to help provide a space in which to share information and options for all of those dealing in today’s fragile markets.

We have all heard stories in the media and from financial experts about the take over of FNMA and FHLMC. The vast amount of opinion as to the inherent costs to the government, and hence “we the people”, is enough to drive any sane individual into a panic.

Just last week I was in Denver Colorado doing a training class, when on the nightly news of a major television station, the news anchor made the comment: “With 90% of all the homes in America in foreclosure, the government bailout could cost Trillions!”

Now you know and I know that this is far from correct. 90% of the homes in America are NOT in foreclosure. Depending on best estimates, about 9% of loans in America are in some degree of default. This is a big difference.

HR 3221 Housing and Economic Recovery Act of 2008

Observations and interpretations by Michael F. White CMPS™

Well, here it is. More than 700 pages of law that I have sifted down into a few pages and six areas we all need to be aware of. Not in any particular order, here is what I see and how and where to use this information and how to locate the documents and other interpretations you might find of value. Please understand that many interpretations from HUD and state and local agencies are still to follow and you need to keep up with those changes as they happen.

The first thing I want to look into is that of the DPA elimination. Under this law, all seller-funded programs are eliminated as of 10-1-08. While there is currently a number of people that are in favor of legislation to restore these DPA programs under current law, these are gone as of October 1^st 2008 and all loans using DPA must be closed by then.

The reason for this is quite simple. The default rate on FHA loans with DPA is three times higher than those FHA loans not using DPA.

The second area of interest is the new FHA guidelines. The key issues include a $625,500 limit in high cost areas with each area limit determined by HUD as 115% of the median home sales price in your area up to the new $625,500.

Home Value Restoration Act

By Michael F. White CMPS™

We don’t need politics. We certainly don’t need a bail out of any kind. We need solutions. Here is a plan that can help get us back to where we need to be by providing investment and a plan.

There are three major challenges that are the root cause of where we are. The fall of home prices and a series of bad loans on residential properties clog the banks and their balance sheets, and the lack of confidence that bank deposits are secure.

First thing that needs to be done is to remove limits from FDIC insurance on all insured accounts. We either have confidence in our banking system or we don’t. Remove the limits and restore confidence by depositors.