How Will a Short Sale Affect my Taxes in Orange County? from Kim and Kris Darney on Vimeo.

If you’ve been to NAPA…Northern end, you have seen this beautiful villa elevating from the surrounding Oaks…

Iconic Napa wineries part of $269 million sale-lease deal

THE PRESS DEMOCRAT
Sterling Vineyards near Calistoga is part of Diageo alcohol conglomerate’s $269 million sale of Napa Valley properties to a California investment group. Diageo will lease back the wineries and vineyards.

By Kevin McCallum
THE PRESS DEMOCRAT

Published: Thursday, June 24, 2010 at 6:40 p.m.
Last Modified: Thursday, June 24, 2010 at 6:40 p.m.
One of the largest California wine deals in years was announced Thursday, not that wine drinkers will ever taste the difference.

Diageo, the London-based alcohol conglomerate, revealed that it is selling most of its Napa Valley wineries and vineyards to an investment firm for $269 million, and then turning around and leasing them back for 20 years.

The sale-leaseback arrangement between Diageo and Realty Income Corp., an Escondido-based real estate investment trust, is the largest such transaction in the U.S. wine business, one that will help Diageo raise cash without impacting its wine operations, said industry analyst Robert Nicholson.

“It’s a very meaningful development and it’s a very smart move by Diageo,” said Nicholson, a principal at International Wine Associates, a Healdsburg consulting firm

The deal involves two of the best known Napa wineries. The historic Beaulieu Vineyards was founded in 1900 in Rutherford and, under the guidance of the famed viticulturalist André Tchelistcheff, helped spawn the valley’s fine-wine renaissance.

Sterling Vineyards, the white stucco winery on a bluff south of Calistoga, was founded in 1964 by British international paper broker Peter Newton and has become one of Napa Valley’s most popular tourist destinations.

Diageo Chateau & Estate Wines will continue to manage and operate the properties and will retain ownership and marketing of the wine brands. In return, it will enter into 20-leases for the buildings and 2,000 acres of vineyards. When completed, Diageo will become Realty Income’s second-biggest tenant.

The transaction allows Diageo, which has struggled during the recession, to raise cash and increase returns for shareholders.

“We know that to remain competitive in this environment we need to rethink our whole wine business to be more nimble and entrepreneurial,” said Zsoka McDonald, a company spokeswoman. “This is about ensuring the long-term strength of our North America wine business and the health of our core wine brands.”

Diageo’s wine and spirits portfolios tend toward the high-end, and it has been hit hard as the alcohol business has proven to be less recession-proof than many thought. It owns such powerhouse brands as Johnnie Walker whiskey, Smirnoff vodka and Guinness stout.

Its wine sales fell 7 percent in 2009. The company announced in May it was restructuring U.S. wine operations, laying off about 14 percent of its workforce and would focus on core wine brands, including Beaulieu Vineyard, Sterling Vineyards, Chalone, Acacia, Rosenblum Cellars and Provenance.

The chief benefit for Diageo is that is can raise cash while paying reasonable leases on the properties, said Joe Ciatti, of Zepponi & Company of Santa Rosa.

“Diageo’s saying ‘We’ve got these wine assets that really don’t produce a lot of return for us, and it’s better for us to sell those off,’” Ciatti said.

He said he understood the leases would generate a 6 percent return for Realty Income Corp., a conservative return, he said.

Ciatti ran his own wine industry focused REIT, Vintage Wine Trust, from 2005 to 2008, when he was forced to liquidate it because the returns weren’t what investors had hoped.

VinREIT in St. Helena is facing challenges, as well, with several of its properties facing foreclosure.

Nicholson, however, said this deal should work well for Realty Income Corp because it got great properties with a tenant that isn’t going anywhere.

“This REIT is smart. They know what they are doing and got some blue-chip assets,” he said.

And wine consumers, whether visiting the Napa tasting rooms or buying the wines in supermarkets, won’t notice a difference, Nicholson said.

“This is the same as the way Marriott doesn’t own their hotels,” Nicholson said.

Link to the Article

Rebecca U. Cho, Staff Writer
Created: 05/13/2010 07:41:28 PM PDT

National foreclosure activity fell last month on an annual basis for the first time in four years, with the Inland Empire’s filings dropping by a quarter from March, according to data released Thursday by a firm that tracks foreclosures.
But the latest numbers most likely reflect a stronger crackdown on foreclosures nationwide rather than an improvement in homeowners’ abilities to pay their mortgages, industry observers said.

“It’s a sign of the times that there’s a huge response to minimize the number of foreclosures overall,” said Brad Kemp, director of regional research at Beacon Economics, a San Rafael-based think tank.

Foreclosure filings fell by 2percent in April from the same period a year before, according to RealtyTrac, which collected data from 2,200 counties nationwide. That was a 9percent drop from March.

In San Bernardino County, foreclosure filings fell 25.7percent in April from the month before to about 5,900 filings.

But government programs, such as the federal Home Affordable Foreclosure Alternatives Program, which went into effect in April, probably contributed to the decline, industry observers said. HAFA pays incentives for short-sale or deed-in-lieu of foreclosure agreements.

“There’s a lot of things happening that’s propping up the market and helping foreclosures to subside,” said Daren Blomquist, RealtyTrac’s marketing communications manager. “To me, this is a fragile trend we’re seeing. It can be upset if some of those government props go away or if the market faces more trouble from other areas.”
Kim and Kris Darney, Ontario-based real estate agents who focus on short- term sales, said housing conditions continue to be bleak in the region.

“I believe those numbers are somewhat of a false hope for the Inland Empire,” Kris Darney said.

The Inland Empire became a poster child for the foreclosure crisis after a housing market boom incinerated under the subprime lending debacle. By January, the city of Fontana had spent more than $1.7million in federal funds on rehabilitating foreclosed homes under President Barack Obama’s 2009 federal economic stimulus.

The Darneys said they see more banks allowing homeowners to sit on their property without making payments, which they attribute to the decrease in foreclosure filings.

“They’re letting people hang out in their homes right now,” Kim Darney said. “They don’t want more (foreclosures) in their inventory.”

California continued to lead the nation in the total number of foreclosure filings with about 69,700, according to RealtyTrac. San Bernardino County had the sixth highest foreclosure rate in the state. Riverside County ranked third.

rebecca.cho@inlandnewspapers.com
909-483-9391

Listen to Jeff Lischer Top NAR Executive Talk Candidly About HAFA Short Sales

Real estate specialist Kris Darney on Thursday walks through a Rancho Cucamonga home whose owners are hoping it will be purchased in a short sale instead of being lost to foreclosure. (Mediha Fejzagic DiMartino/Staff Photographer)

Read more:http://www.dailybulletin.com/news/ci_14814460#ixzz0k9pQ41gK

Feds aim to ease pain

New U.S. program to start Monday
Sandra Emerson, Staff Writer
Created: 04/03/2010 07:08:53 AM PDT

Short sales have become more appealing to homeowners who are underwater on their mortgage and are looking to get out without going into foreclosure. But the time it takes to process these type of sales has been thought of as long rather than short.
A new federal program goes into effect Monday and will provide more guidelines to allow the stressed homeowners to enter into a short sale and more quickly get on their way to a more affordable living arrangement.

The Home Affordable Foreclosure Alternatives program will provide certain incentives to lenders, and to home owners who chose to do a short sale, rather than wait until the bank takes the property.

The program is part of the Home Affordable Modification

Real estate specialist Kris Darney on Thursday walks through a Rancho Cucamonga home whose owners are hoping it will be purchased in a short sale instead of being lost to foreclosure. (Mediha Fejzagic DiMartino/Staff Photographer)
Program, which was implemented in February 2009 to modify homeowners’ loans to avoid foreclosure. Both programs are funded through $50 billion from the bank bailout.
The government “wanted to basically create a streamlined process as an alternative to the foreclosures going on right now,” said Kris Darney, an Ontario-based real estate, short sale, loss mitigation specialist with his wife Kim Darney.

“Of course short sales have gotten a bad rap.”

Darney counted 3,500 short sales on the market in the Inland Empire as of Tuesday.

Due to the high volume of offers made on short sales, banks can take months to respond. Discouraged buyers will often drop out of the offer.

Timelines have been put into place through the new program in order to speed up the short sale process.

The short sale transaction must be completed within 120 days. The time can be extended up to 12 months if necessary.

Short sales take up to six to nine months to get approved, Kris Darney said.

“It’s getting reduced to 10 days, so a bank will have to give a response to a buyer’s offer within 10 days,” Kris Darney said. “It may not be an approval, it may be a rejection or it may be a counter offer.”

Through HAFA, lenders will be required to give the homeowner preapproved short sale terms before going to market. This will include a listing price and an amount of sale proceeds the lender is will to accept.

“What this new program is doing is streamlining the process and allowing for all banks to have consistent forms and a consistent number of items that can be requested,” Darney said.

With a short sale, a buyer will make an offer and the lender will have to review it and respond, said Raffi Tal, chief operating officer for I Short Sale, a Los Angeles-based short sale and loss mitigation firm.

“Everything has to go to the investor, Fannie (Mae)or Freddie Mac), that’s why the sale is stretching the process by at least two months,” Tal said. “Every little change has to go through the investor.”

Banks are not required to participate, but Dustin Hobbs, communications director for the California Mortgage Bankers Association, said most banks will likely participate.

“Everyone is realistic in the sense there is no silver bullet, not one program that is going to come along and solve everyone’s problem,” Hobbs said. “I think everyone is optimistic that this program will help and will be another tool in the toolbox for service to help homeowners.”

Homeowners can receive up to $3,000 to pay for moving costs after the sale is completed.

“It’s the government’s way of offering a little bit of help, a soft landing to allow you to hire a moving van or rent a U-Haul truck, help with first months rent payments,” Sorensen said.

The servicer, the organization responsible for collecting monthly loan payments, will receive up to $1,500 per short sale to cover administrative fees.

The program only applies to homeowners with one mortgage.

Many people in Southern California took out second mortgages on their homes either because they needed the money or wanted to make large purchases, said Laurel Miller Starks, a real estate agent with Keller Williams Realty in Rancho Cucamonga.

“So you might have a first mortgage that gets approved and can close very quickly, but then you’ve got this second mortgage hanging around that may take a long time,” Starks said.

The actual impacts of the program may not be seen for a few more months, said Kim Darney.

“We won’t see it overnight, but I think we’ll see a decrease in foreclosures because I believe a lot of banks are going to hold off on processing foreclosures while getting acclimated to this process,” Kim Darney said.

The program will not be automatic. Homeowners have to call their lender to request a short sale through HAFA.

Banks may be inundated with calls once the program starts Monday.

Kim and Kris Darney have already been getting calls from homeowners who have heard the program is coming.

“It’s really a wonderful thing being afforded to us as Americans right now,” Kris Darney said. “I know there’s a lot of naysayers out there, but if 10 percent of the homes are impacted by HAFA it’s a phenomenal result, it’s actually a phenomenal result.”

Why Short Sale?

Entering into a short sale agreement provides more benefits to homeowners than foreclosure, on which the HAFA program is attempting to capitalize.

Chris Sorensen, a former mortgage banker and founder of the non-profit Homeownership Education Learning Program, works with many homeowners who are behind on their payments and aren’t sure what to do.

Many of the people he meets are already leaning toward a short sale but are still unsure why.

“Those people want to know what’s in it for them,” Sorensen said. “How does this impact their credit good and bad? They want to know will this satisfy my lender for any further action against them. They want to know what are the tax ramifications surrounding short sales and foreclosure. And they want to know, believe it or not, this is very important, they want to know `when will I be able to buy again?’ ”

Upon the closing of a short sale through the HAFA program, the homeowner will be released from all liability for the debt of the first mortgage.

However that does not necessarily protect them from the tax ramifications, Sorensen said.

“The benefits of HAFA is that it requires the lender to disclose this fact that by cooperating in pre-foreclosure or a short sale may have tax implications,” Sorensen said.

Through HAFA lenders are required to divulge all information relating to tax consequences and credit score impact to the homeowners considering a short sale.

“It is now being required that lenders disclose that there are serious tax implications when one cooperates in a short sale or losing their home to foreclosure,” Sorensen said. “That now must be disclosed in writing for the first time ever.”

The homeowner will take a hit to their credit score, but not as much as with a foreclosure, Starks said.

“A short sale is not going to lower a credit score nearly like what a foreclosure will. A foreclosure can be a few hundred points. Usually a short sale is 100 or less,” Starks said.

Homeowners can recover from a short sale more quickly and can often head out to purchase a new home in a couple of years, Starks said.

Banks also view short sales as a more favorable option over foreclosures.

On average, a bank will lose up to 40 percent on a foreclosed loan, but up to 19 percent on a short sale, Sorensen said.

Short sales tend to have less of an impact on surrounding home values, Kris Darney said.

“The short sale is a much better impact on the neighborhood because the short sale property value will be more in-line with the current market value,” Kris Darney said. “It will not have been bought at a rock-bottom price at an auction on the court house steps, which is what happens to may of these foreclosed homes.”

The HAFA program is expected to alleviate the burden of foreclosures on homeowners hoping to enter a regular home sale.

“It puts homeowners back into the community generating taxes again instead of another boarded up house,” Kim Darney said. “Every house that’s boarded up and foreclosed upon drops other home values up to $9,000 for each foreclosure.”

QUALIFYING FOR HAFA
Homeowners eligible under HAMP must be considered for the HAFA program before the loan goes into foreclosure if the homeowner:

Does not quality for a Trial Period Plan. HAMP requires homeowners enter a Trial Period Plan for their modified mortgage before getting a modification.

Does not complete the Trial Period Plan.

Is delinquent on a HAMP modification by missing at least two consecutive payments.

Requests a short sale or deed in lieu.

Short sale process under HAFA:

Before a homeowner can be approved for a HAFA short sale, the lender must provide a listing price or a minimum amount it will accept for the sale.

A fixed termination date at least 120 days from the date the short sale agreement is given to the homeowner. The servicer may extend the agreement up to 12 months if agreed to by the homeowner.

Property must be listed with a licensed real estate professional who is regularly doing business in the community.

The servicer must determine the amount of closing costs and other expenses they will allow to be deducted from the gross sale proceeds. This must be a dollar amount, percentage of the list price or a list by category of reasonable costs.

The amount of the real estate agent’s commission must be determined and cannot exceed 6 percent of the contract sales price.

The homeowner will need to give a statement allowing the services to communicate the homeowner’s personal financial information to other parties as necessary to complete the transaction.

Cancellation and contingency clauses must be included in the listing notifying potential home buyers that the sale is subject to approval by the servicer and/or third parties.

The home buyer may not sell the property within 90 days of closing.

After the sale is completed, the homeowner is released from all liability for repayment of their first mortgage debt.

After the sale, the homeowner can receive up to $3,000 for moving costs.

The homeowner must be informed of income tax consequences and a possible hit to their credit score.

The homeowner’s mortgage payment during the short sale process cannot exceed 31 percent of their income.

As long as the homeowners follow the criteria for the short sale, the servicer will not send them to foreclosure.

Servicer can receive up to $1,500 to cover administrative and processing costs for the short sale or deed-in-lieu

SOURCE: U.S. Department of the Treasury

Glossary
SHORT SALE: A homeowner can enter into a short sale when they owe more on their mortgage than the home is currently worth.

In a short sale, the servicer allows the homeowner to list and sell the mortgaged property with the understanding that the net proceeds from the sale may be less than the total amount due on the first mortgage.

DEED-IN-LIEU OF FORECLOSURE: With a deed-in-lieu, the borrower voluntarily transfers ownership of the property to the servicer.

SERVICER: A mortgage servicer is responsible for collecting monthly loan payments as well as escrow accounts.

DELINQUENT: A homeowner is delinquent on their loan when they fail to make payments.

DEFAULT: A homeowner can default when they are unable to pay their debt.

FORECLOSURE: A foreclosure occurs when the homeowner’s right to the property is terminated. A home can be foreclosed upon when the homeowner defaults on their mortgage payments.

Annual total home sales
San Bernardino County

2007 20,544

2008 24,455

2009 35,625

Los Angeles County

2007 62,316

2008 60,683

2009 77,037

Pomona

2007 863

2008 990

2009 1,447

Claremont

2007 351

2008 266

2009 277

Riverside County

2007 29,952

2008 40,870

2009 49,115

Monthly total home sales

COUNTIES (20)

January

Los Angeles: 5,228

Riverside: 3,162

San Bernardino: 2,252

February

Los Angeles: 5,034

Riverside: 3,199

San Bernardino: 2,095

2009:

January

Los Angeles: 4,532

Riverside: 3,320

San Bernardino: 2,532

February

Los Angeles: 4,590

Riverside: 3,420

San Bernardino: 2,324

March

Los Angeles: 5,971

Riverside: 4,409

San Bernardino: 2,897

April

Los Angeles: 6,425

Riverside: 4,469

San Bernardino: 3,130

May

Los Angeles: 6,521

Riverside: 4,414

San Bernardino: 3,134

June

Los Angeles: 7,636

Riverside: 4,694

San Bernardino: 3,438

July

Los Angeles: 8,082

Riverside: 4,699

San Bernardino: 3,549

August

Los Angeles: 7,189

Riverside: 4,145

San Bernardino: 3,276

September

Los Angeles: 7,138

Riverside: 4,312

San Bernardino: 3,023

October

Los Angeles: 7,409

Riverside: 4,197

San Bernardino: 3,176

November

Los Angeles: 6,257

Riverside: 3,745

San Bernardino: 2,751

December

Los Angeles: 7,679

Riverside: 4,282

San Bernardino: 2,934

2008:

January

Los Angeles: 3,398

Riverside: 1,939

San Bernardino: 1,111

February

Los Angeles: 3,468

Riverside: 2,147

San Bernardino: 1,242

March

Los Angeles: 4,263

Riverside: 2,691

San Bernardino: 1,534

April

Los Angeles: 5,016

Riverside: 3,186

San Bernardino: 1,667

May

Los Angeles: 5,445

Riverside: 3,444

San Bernardino: 2,075

June

Los Angeles: 5,678

Riverside: 3,757

San Bernardino: 2,215

July

Los Angeles: 6,592

Riverside: 4,116

San Bernardino: 2,521

August

Los Angeles: 6,138

Riverside: 4,078

San Bernardino: 2,439

September

Los Angeles: 6,274

Riverside: 4,551

San Bernardino: 2,831

October

Los Angeles: 6,824

Riverside: 4,619

San Bernardino: 2,856

November

Los Angeles: 5,037

Riverside: 3,719

San Bernardino: 2,385

December

Los Angeles: 5,848

Riverside: 4,435

San Bernardino: 2,862

2007

January

Los Angeles: 6,805

Riverside: 3,089

San Bernardino: 2,373

February

Los Angeles: 6,300

Riverside: 3,057

San Bernardino: 2,274

March

Los Angeles: 8,353

Riverside: 3,680

San Bernardino: 2,476

April

Los Angeles: 7,225

Riverside: 2,987

San Bernardino: 2,049

May

Los Angeles: 7,426

Riverside: 3,307

San Bernardino: 2,220

June

Los Angeles: 7,580

Riverside: 3,359

San Bernardino: 2,190

July

Los Angeles: 6,809

Riverside: 2,769

San Bernardino: 2,008

August

Los Angeles: 6,647

Riverside: 2,834

San Bernardino: 2,096

September

Los Angeles: 4,361

Riverside: 2,208

San Bernardino: 1,509

October

Los Angeles: 4,368

Riverside: 2,371

San Bernardino: 1,603

November

Los Angeles: 4,468

Riverside: 2,503

San Bernardino: 1,719

December

Los Angeles: 4,430

Riverside: 2,503

San Bernardino: 1,518

Monthly total home sales in Southern California

2010

??

??

2009

Jan. 15,227

Feb. – 15,231

March – 19,486

April – 20,514

May – 20,775

June – 23,262

July – 24,104

August – 21,502

Sept. – 21,539

Oct. – 23,745

Nov. – 19,181

Dec. – 22,328

2008

Jan. – 9,983

Feb. – 10,777

March – 12,808

April – 15,615

May – 16,917

June – 17,424

July – 20,329

August – 19,366

Sept. – 20,497

Oct. – 21,532

Nov. – 16,720

Dec. – 19,926

2007

Jan. – 18,128

Feb. – 17,680

March – 21,856

April – 19, 269

May – 19,874

June – 20,166

July – 17,867

August – 17,755

Sept. – 24,460

Oct. – 12,999

Nov. – 25,578

Dec. – 13,240

Out of the total home sales each month in Southern California a certain percentage were foreclosures. Here are the percentages for each month for the last three years:

2010

Jan. – 42.1%

Feb. – 42.3%

2009

Jan. – 60%

Feb. – 56.4%

March – 55.4%

April – 53.6%

May – 50.2%

June – 45.3%

July – 43.4%

August – 38.8%

Sept. – 40.4%

Oct. – 40.6%

Nov. – 39.1%

Dec. – 39.6%

2008

Jan. – 29.6%

Feb. – 33.5%

March – 38%

April – 37.5%

May – 37.4%

June – 39.2%

July – 41.8%

August – 45.5%

Sept. – 50%

Oct. – 51%

Nov. – 54.6%

Dec. – 55.7%

2007

April – 8%

May – 5.5%

June – 7.3%

July – 7.9%

August – 10%

Sept. – 12.6%

Oct. – 16%

Nov. – 18.8%

Dec. – 24.3%

Return to Top

Selected for you by a sponsor:
Bank of America will cut loan amount for underwater homes (USATODAY.com)
As Deadline fast approaches, Homebuyer Tax Credit comprises 50% of Sales (Tampa Coastal Homes)
You might also like:
BofA, Wells Fargo to fix 2nd mortgages (this site)
How the new mortgage relief plan works (this site)
Hoarder now homeless (this site)
Pomona police arrest four people (this site)

Read more: http://www.dailybulletin.com/news/ci_14814460#ixzz0k9p7W5SJ

It’s official. President Obama has signed a bill that extends the tax credit for first-time homebuyers (FTHBs) into the first half of 2010. This program had been scheduled to expire on November 30, 2009.

In addition to extending the tax credit of up to $8,000 through June 30, 2010, the extension measure also opens up opportunities for others who are not buying a home for the first time.

So Who Gets What?
The program that has existed for FTHBs remains intact with the one exception that more people are now eligible based on an increase in the amount of income someone may now earn.

Additionally, the program now gives those who already own a residence some additional reasons to move to a new home. This incentive comes in the form of a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.

Deadlines
In order to qualify for the credit, all contracts need to be in effect no later than April 30, 2010 and close no later than June 30, 2010.

Higher Income Caps in Effect
The amount of income someone can earn and qualify for the full amount of the credit has been increased.

Single tax filers who earn up to $125,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, single filers who earn $145,000 and above are ineligible.

Joint filers who earn up to $225,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, joint filers who earn $245,000 and above are ineligible.

Maximum Purchase Price
Qualifying buyers may purchase a property with a maximum sales price of $800,000.

First-Time Homebuyer Tax Credit – Frequently Asked Questions
Here are answers to some commonly asked questions about the tax credit.

What is a tax credit?
A tax credit is a direct reduction in tax liability owed by an individual to the Internal Revenue Service (IRS). In the event no taxes are owed, the IRS will issue a check for the amount of the tax credit an individual is owed. Unlike the tax credit that existed in 2008, this credit does not require repayment unless the home, at any time in the first 36 months of ownership, is no longer an individual’s primary residence.

What is the tax credit for first-time homebuyers (FTHBs)?
An eligible homebuyer may request from the IRS a tax credit of up to $8,000 or 10% of the purchase price for a home. If the amount of the home purchased is $75,000, the maximum amount the credit can be is $7,500. If the amount of the home purchased is $100,000, the amount of the credit may not exceed $8,000.

Who is eligible for the FTHB tax credit?
Anyone who has not owned a primary residence in the previous 36 months, prior to closing and the transfer of title, is eligible. This applies both to single taxpayers and married couples. In the case where there is a married couple, if either spouse has owned a primary residence in the last 36 months, neither would qualify. In the case where an individual has owned property that has not been a primary residence, such as a second home or investment property, that individual would be eligible.

As mentioned above, the tax credit has been expanded so that existing homeowners who have owned and occupied a primary residence for a period of five consecutive years during the last eight years are now eligible for a tax credit of up to $6,500.

How do I claim the credit?
For those taking advantage of the tax credit in 2009, you may choose to either apply for the credit with your 2009 tax return or you may apply for the credit sooner by filing an amended 2008 tax return with Form 5405 (http://www.irs.gov/pub/irs-pdf/f5405.pdf).

Can you claim the tax credit in advance of purchasing a property?
No. The IRS has recently begun prosecuting people who have claimed credits where a purchase had not taken place.

Can a taxpayer claim a credit if the property is purchased from a seller with seller financing and the seller retains title to the property?
Yes. In situations where the buyer purchases the property, even though the seller retains legal title, the taxpayer may file for the credit. Examples of this would include a land contract, contract for deed, etc. According to the IRS, factors that would demonstrate the ownership of the property would include: 1. the right of possession, 2. the right to obtain legal title upon full payment of the purchase price, 3. the right to construct improvements, 4. the obligation to pay property taxes, 5. the risk of loss, 6. the responsibility to insure the property and 7. the duty to maintain the property.

Are there other restrictions to taking the credit?
Yes. According to the IRS, if any of the following describe your situation, a credit would not be due.

• You buy your home from a close relative. This includes your spouse, parent, grandparent, child or grandchild.
• You do not use the home as your principal residence.
• You sell your home before the end of the year.
• You are a nonresident alien.
• You are, or were, eligible to claim the District of Columbia first-time homebuyer credit for any taxable year. (This does not apply for a home purchased in 2009.)
• Your home financing comes from tax-exempt mortgage revenue bonds. (This does not apply for a home purchased in 2009.)
• You owned a principal residence at any time during the three years prior to the date of purchase of your new home. For example, if you bought a home on July 1, 2009, you cannot take the credit for that home if you owned, or had an ownership interest in, another principal residence at any time from July 2, 2006, through July 1, 2009.

Can you buy a home from a step-relative and be eligible for the credit?
Yes. Provided the person you are buying a home from is not a direct blood relative, the purchase would be allowed.

Can parent(s) who will not live in the property cosign for a mortgage for their child and the child that is a qualifying FTHB still be eligible for the credit?
Yes.

Can a separated spouse who has not owned a home for four years qualify for the FTHB tax credit if the spouse has owned a property anytime in the last three years?
No. However, the spouse may be eligible for the repeat buyer credit. The best path to take in any situation regarding income taxes is to speak with a professional tax preparer or CPA.

http://timandjulieharris.com/2009/11/06/home-buyer-tax-credit-bill-passed-home-buyer-tax-credit-faq/

According to a recent report release by RealtyTrac, in the last quarter (July, August, September 2009) the US has experienced the highest foreclosure activity since RealtyTrac began reporting on the foreclosure market.

Activity rose 5% over last quarter or 937,840 properties.

States with the highest activity

“California, Florida, Arizona, Nevada, Illinois and Michigan accounted for 62 percent of the nation’s total foreclosure activity in the third quarter, with 579,541 properties receiving foreclosure filings in the six states combined.

With 250,054 properties receiving foreclosure filings during the quarter, California accounted for nearly 27 percent of the nation’s total. The state’s foreclosure activity decreased nearly 2 percent from the previous quarter thanks to a 10 percent drop in default notices, but scheduled auctions increased 4 percent from the previous quarter and REOs increased 12 percent from the previous quarter.

Florida foreclosure activity decreased less than 1 percent from the previous quarter, but the state still posted the second highest foreclosure activity total for the third quarter. Foreclosure filings were reported on 156,924 Florida properties, a 23 percent increase from Q3 2008. Default notices in Florida decreased 6 percent from the previous quarter while scheduled auctions increased 5 percent from the previous quarter and REOs increased 16 percent from the previous quarter.

Arizona posted the nation’s third highest foreclosure activity total in the third quarter, with 50,342 properties receiving a foreclosure filing during the quarter — a 5 percent increase from the previous quarter and a 25 percent increase from Q3 2008.

Nevada posted the nation’s fourth highest foreclosure activity total, with 47,925 properties receiving a foreclosure filing in the third quarter, followed by Illinois, with 37,270 properties receiving a foreclosure filing, and Michigan, with 37,026 properties receiving a foreclosure filing. All three states reported increasing foreclosure activity from the previous quarter and from Q3 2008.

Other states with foreclosure activity totals among the nation’s 10 highest were Georgia (33,385), Texas (29,838), Ohio (29,645), and New Jersey (18,108).”

These #’s are huge.  If we keep on this track, we’re adding almost 4Million foreclosures to our inventory this year alone…how will the media spin this?

It appears that the previous owners (Madoff Victims) who surrendered the property in lieu of a large amount of monies owed to Wells Fargo for outstanding debt, had a few friends in the enclave that were concerned about the activities and goings on at the exclusive address…ya know…parties and lots of guests. We’ll, after some neighbors did some snooping, Ms. Guyton was identified as the primary living at the property.

Identified as a WF executive…the news broke and like “stuff hittin’ the fan”, Ms Guyton was the searchin for cover like a refugee in Afghanistan.

We’ll it appears that Ms. Guyton was living in this WF held property “gratis” and unbeknownst of the companies knowledge…a property seized and held by the foreclosure division she managed.

We’ll needles to say, Wells Fargo finally made a good decision after the many bad decisions over the last few years (ya’ know…bad sub-prime loans and all).

WF execs canned Ms. Guyton…not only was it bad judgment and showed a lack of empathy for the prior owners & victims to one of the largest scams played on the American public, it was just plain stupid!