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What You Should Know About Your Home and Your 2013 Taxes

Read this on the Houselogic site and thought i would share.

It’s the last year for three sweet home tax benefits, but the first for a way simpler home office deduction.

These days few things start a fight on Capitol Hill faster than taxes. Despite the fact that three important tax benefits used by millions of American homeowners are days from expiring, Congress is unlikely to do anything to re-up them any time soon.

So if you’re eligible, tax year 2013 is possibly the last time to claim the private mortgage insurance (PMI) deduction, the energy tax credit, and debt forgiveness benefit, all of which all expire on Dec. 31, 2013.

At least there’s one piece of good news for homeowners: If you have a home office, there’s a new, simpler option for calculating the home office deduction for which you may qualify on your 2013 taxes.

Meanwhile, here’s what you need to know about those expiring benefits as you ready your taxes:

PMI Deduction

This tax rule lets you deduct the cost of private mortgage insurance, which is what you pay your lender each month if you put down less than 20% on a home. PMI protects the lender if you default on the home loan. Your deduction could amount to a couple hundred dollars depending on your tax bracket and other factors.

Find out if you qualify for and how to take the PMI deduction.

Energy-Efficiency Upgrades

This sweet little tax credit lets you offset what you owe the IRS dollar-for-dollar for up to 10% of the amount you spent on certain home energy-efficiency upgrades, from insulation to water heaters. On the downside, the credit is capped at $500 (less in some cases). But on the bright side, the right improvement could lower your utility bills indefinitely.

Related: Take back your energy bills with these high-ROI energy-efficiency practices.

Debt Forgiveness

When you go through a short saleforeclosure, or deed-in-lieu, your lender typically lets you off the hook for some or all of what you owe on your mortgage.

That forgiven mortgage debt is income, on which you’d typically have to pay income tax.

Suppose you’re in financial distress and your lender agrees to let you short-sell your home, say for $50,000 less than you owe on the mortgage, and forgive you for the balance. Without the protection of the Mortgage Debt Forgiveness Act, you’ll owe income tax on that $50,000.

It’s likely if you had the money to pay income tax on $50,000, you’d have used it to pay your mortgage in the first place.

New Simplified Option for the Home Office Deduction

This may be the last year for the benefits above, but a new one kicks in for the 2013 tax year. If you work from home, you may qualify to use a new, simplified option for claiming the home office deduction when you file your 2013 taxes.

How much simpler is it? It lets you claim $5 per sq. ft. for up to 300 sq. ft. instead of having to compute the actual expenses of your home office using a 43-line form. To calculate the square footage of your office, just multiply the length of two walls. For example, an 8-by-10-foot room is 80 sq. ft. And at $5 per, that’s $400.

Although using the simplified option is obviously easier, the basic requirements for claiming the home office deduction haven’t changed. Your home office still must be used for business purposes:

  • Exclusively, and
  • On a regular basis.

Related: Which Home Office Set-Ups Qualify for a Deduction?

Why Might the Tax Benefits Not Be Renewed?

Although the expiring tax benefits were renewed retroactively in past years, that may not happen in 2014 because many in Congress would like to see comprehensive tax reform rather than scatter shot renewals of individual provisions. This could delay a decision on the home ownership tax benefits until the big picture budget and tax issues are resolved.

So if you can, enjoy them now!

$20,000 in Down Payment assistance Available now! You must act fast to qualify.

Wells Fargo Advisors

Wells Fargo Advisors (Photo credit: Wikipedia)

Wells Fargo Brings CityLIFT(SM) Program to Washington, D.C. and Prince George’s County to Help Local Housing Market

Wells Fargo, the nation’s largest home mortgage lender, announced the company’s CityLIFT(SM) program will launch in Washington, D.C. on October 5-6. The CityLIFT(SM) program is a collaboration between Wells Fargo Bank N.A., Washington D.C. and Prince George’s County Maryland officials, and NeighborWorks America designed to provide down payment assistance and homebuyer education programs in areas most impacted by the financial crisis. The Washington, D.C. CityLIFT(SM) program includes a $7 million investment for down payment assistance grants and homebuyer support programs to help consumers achieve successful, sustainable homeownership. The CityLIFT(SM)program is for qualified potential homebuyers interested in living in a home in Washington, D.C. or Prince George’s County, Maryland.

The Washington, D.C CityLIFT(SM) program will include a free homebuyer workshop on Friday, Oct. 5 from 10 a.m. – 7 p.m. and Saturday, Oct. 6 from 8 a.m. – 5 p.m., at the Walter E. Washington Convention Center, Hall C.

At the event, potential homebuyers can find out if they qualify for the down payment assistance program and reserve funds – of $20,000 – for 60 days for home purchases within Washington D.C. or Prince George’s County, even if they have yet to find a property. In addition, prospective homebuyers may stop by the Wells Fargo Affordable Home Tour(SM) viewing center to preview featured homes available for sale in local neighborhoods. They can also take a free bus tour to view the homes each day. Self-directed tours are also encouraged.

Prospective homebuyers can register at until Wednesday, Oct. 3 and learn more about the Washington, D.C. CityLIFT(SM) program by calling 1-866-802-0456. Pre-registration is encouraged, although walk-ins are welcome. Wells Fargo will collaborate with Washington, D.C. city officials and Prince George’s County officials, NeighborWorks America, and local NeighborWorks affiliate Manna, Inc. to implement the CityLIFT(SM) program.

Washington D.C. and Prince George’s County are part of 20 housing markets that will benefit from a total of $170 million Wells Fargo has committed through its LIFT(SM)programs (including NeighborhoodLIFT(SM) and CityLIFT(SM)) to support sustainable housing in cities affected by the economic downturn.

“Today, despite low home prices and historically low interest rates, many families are still unable to purchase a home because they struggle with making the down payment,” said Mike Golden, Wells Fargo’s regional president for Greater Washington, D.C. “The CityLIFT(SM)program will help address this issue for homebuyers by providing down payment assistance.”

“This program is a continuation of ongoing efforts by our city to strengthen neighborhoods and provide quality and affordable housing for our residents,” said Mayor Vincent C. Gray. “This collaboration with Wells Fargo and local nonprofits will offer residents not only new opportunities to own a home, but also the knowledge and resources to be successful in this important investment.”

Down payment assistance of $20,000 is available to those who qualify. To qualify for down payment assistance, applicants must meet certain criteria including annual income not exceeding 120 percent of the median income for the area (income maximums vary depending on family size); an eight-hour homebuyer education session with a HUD-approved counselor such as NeighborWorks America affiliates; and a commitment to stay in the home for five years and qualification for a first mortgage on the property. Participating homebuyers can obtain mortgage financing from any qualified lender.

“Though our County was hit hard by the downturn in the housing market, we are slowly rebounding,” said Prince George’s County Executive Rushern L. Baker, III. “Prince George’s County has a great inventory of homes and attractive amenities for prospective homeowners in the Washington region. These grants will help people get over the tremendous financial hurdle of finding funds for a down payment and position them to make one of the largest investments of their lives.”

“Prince George’s County was significantly affected by the housing crisis,” said Andy Bertamini, Wells Fargo’s Regional President for Maryland. “The CityLIFT(SM) program will help families achieve successful homeownership which is not just about having enough money on hand and qualifying for a mortgage. It’s also about knowing how to navigate the home buying process, what to expect once you become a homeowner, and having a trusted advisor to turn to when questions come up.”

The CityLIFT(SM) program is designed to provide down payment assistance and home buyer education programs in areas most impacted by the financial crisis. The program was developed in connection with the 2012 settlement with the Civil Rights Division of the U.S. Department of Justice, and is a collaboration between Wells Fargo Bank N.A. and NeighborWorks America.

Note, Keller Williams Preferred Properties and The Godfrey Group will host a similar event in the upcoming weeks.

Servicemembers Civil Relief Act (SCRA)


Very Important Information to know for all of our Service Members

Servicemembers Civil Relief Act (SCRA)

In 1940, Congress passed the Soldiers’ and Sailors’ Civil Relief Act (SSCRA) to provide protection to those called to military service in the armed forces.  The SSCRA was updated after the Gulf War in 1991 but remained largely unchanged as of 2003.  In December 2003, President Bush signed into law the Servicemembers Civil Relief Act (SCRA). The SCRA was written to clarify the language of the SSCRA and to update the SSCRA to reflect new developments in American life since 1940.  This law is a complete revision and provides a number of significant protections to servicemembers.  It also provides protection to Reservists and members of the National Guard (when activated under Title 10 orders).

The most common forms of protection and relief are listed, below:

  • Mortgage Relief
  • Termination of Leases
  • Protection From Eviction.
  • 6% Cap on Interest Rates
  • Stay of Proceedings
  • Reopening Default Judgments

The SCRA actually provides many more protections than these, and the Supreme Court has ruled the SCRA must be read with “an eye friendly to those who dropped their affairs to answer their country’s call.” Military legal assistance attorneys are available to provide guidance on the SCRA.  For more information on locating a legal assistance attorney, see


Independent Foreclosure Reviews

Please note that this letter was sent out to all Real Estate Professionals.  I share it here for you to know and share.

Independent Foreclosure Reviews Fact Sheet

What is happening?

Fourteen U.S. mortgage servicers and their affiliates are making available free, impartial Independent Foreclosure Reviews to certain of their borrowers as part of the consent orders entered into with the Board of Governors of the Federal Reserve System and the Office of the Comptroller of the Currency in April 2011.
If eligible borrowers believe that they were financially injured as a result of servicer errors, misrepresentations or other deficiencies in the foreclosure process on their primary residence, they can request a review of their foreclosure file to verify that their foreclosure process was handled properly.
Throughout this process, servicers will continue their efforts to help homeowners who have not yet gone through a foreclosure sale stay in their homes, where possible.

Who is eligible?

Borrowers are eligible to submit a Request for Review if:

  1. their loan was serviced by one of the participating mortgage servicers,
  2. their loan was active in the foreclosure process between Jan. 1, 2009 and Dec. 31, 2010, and
  3. the property securing the loan was their primary residence.

To participate in an official review, eligible borrowers must submit a completed Request for Review Form by September 30, 2012.

Which servicers are being required to perform the reviews?

The participating servicers are:

  • America’s Servicing 
  • Company
  • Aurora Loan Services
  • BAC Home Loans 
  • Servicing
  • Bank of America
  • Countrywide
  • EMC
  • EverBank/Everhome 
  • Mortgage Company
  • GMAC Mortgage
  • HFC
  • National City 
  • Mortgage
  • PNC Mortgage
  • Sovereign Bank
  • SunTrust Mortgage
  • U.S. Bank
  • Beneficial
  • Chase
  • Citibank
  • HSBC
  • IndyMac Mortgage 
  • Services
  • Wachovia
  • Washington Mutual
  • (WaMu)
  • CitiFinancial MetLife Bank Wells Fargo
  • CitiMortgage Wilshire Credit 

How can borrowers find out if they are eligible for a review?

An estimated 4.5 million borrowers will be notified by a letter explaining the review process and a Request for Review Form. The mailings will be staggered—to better manage volumes—in stages beginning Nov. 1, 2011.

Information also may be found at

Borrowers who believe they may be eligible for a review who do not receive a mailing can call 1.888.952.9105 Monday through Friday 8:00 a.m. – 10:00 p.m. ET and Saturday 8:00 a.m. – 5:00 p.m. ET to determine if they are eligible.

What does it mean that a borrower was active in the foreclosure process?

Foreclosure actions include any of the following occurrences on a primary residence between the dates of Jan. 1, 2009 and Dec. 31, 2010:

  • The property was sold due to a foreclosure judgment.
  • The mortgage loan was referred into the foreclosure process but was removed from the process because payments were brought up-to-date or 
  • the borrower entered a payment plan or modification program.
  • The mortgage loan was referred into the foreclosure process, but the home was sold or
  • the borrower participated in a short sale or
  • chose a deed-in-lieu or other program to avoid foreclosure. 
  • The mortgage loan was referred into the foreclosure process and remains delinquent but the foreclosure sale has not yet taken place.

What information will borrowers need to provide?

Borrowers will be asked to provide information on the property, the borrower and any co-borrowers, and details about how they believe they may have been financially injured. There is no charge to eligible borrowers for a review, which will not be reported to any of the credit bureaus and will not impact any other options a borrower may pursue related to their foreclosure.

What constitutes “financial injury?”

Listed below are examples of situations that may have led to financial injury.
This list does not include all situations.

  • The mortgage balance amount at the time of the foreclosure action was more than you actually owed.
  • You were doing everything the modification agreement required, but the foreclosure sale still happened.
  • The foreclosure action occurred while you were protected by bankruptcy.
  • You requested assistance/modification, submitted complete documents on time, and were waiting for a decision when the foreclosure sale occurred.
  • Fees charged or mortgage payments were inaccurately calculated, processed, or applied.
  • The foreclosure action occurred on a mortgage that was obtained before active duty military service began and while on active duty, or within 9 months after the active duty ended and the service member did not waive his/her rights under the Service members Civil Relief Act.

How long will the foreclosure review take to complete?

The borrower will be sent an acknowledgement letter from the Independent Review Administrator within one week after the request is received. Because the review process will be a thorough and complete examination of many details and documents, a review could take up to several months.

Who will be conducting the reviews?

Foreclosure Reviews will be conducted by independent consultants engaged by the servicers and approved by the Board of Governors of the Federal Reserve System and the Office of the Comptroller of the Currency. In order to ensure that the request for review process is as consistent as possible for eligible customers, all of the participating servicers are using the same outside administrator to manage the handling of incoming complaints for the Request for Review process. Once the Request for Review Forms have been collected by this single vendor, the servicer will provide relevant documents to the independent consultant. The servicer will also provide any findings and recommendations related to the borrower’s request for review to the independent consultant for examination.  Servicers may be asked to clarify or confirm facts and disclose reasons for events that occurred related to the foreclosure process, and customers could be asked to provide additional information or documentation.

Urgent Breaking News! – Bank of American Offering Principal Reductions!

Photo of Bank of America ATM Machine by Brian ...

Image via Wikipedia

OK, I have been telling folks for some time now that this was coming.  But I did not think it would happen so soon and I sure did not think that it would start with Bank Of America.  I am sure others will follow.  This will mark another milestone to the end of the mortgage world as we knew it to be.

Read below to see the story that will change the world of foreclosures and shorts sales.

Bank of America Offering Principal Reductions!

June 23, 2011

Urgent Breaking Real Estate News….brought to us by Tim and Julie Harris and presented by Harris Real Estate University.

Bank of America is offering…PRINCIPAL REDUCTIONS!

You read that right..the nations largest lender is now going to offer a program to bail out underwater owners…here are the details directly from BofA:

CALABASAS, Calif. — Bank of America, a leader in developing and carrying out programs to help financially distressed homeowners, is leveraging the federal government’s Hardest Hit Fund (HHF) initiative to begin pilot programs of principal reductions for customers in Arizona who owe considerably more on their mortgage than their property is worth in today’s depressed market.

The bank has become the first major mortgage servicer to send letters of interest to homeowners who may qualify for HHF-supported principal reductions in these states. Previously, Bank of America began testing and implementing new programs for unemployed homeowners in several other states receiving HHF support.

“Bank of America remains committed to helping distressed borrowers remain in their homes through a variety of programs,” said Terry Laughlin, executive vice president.  “Since the Obama administration established the Hardest Hit Fund (HHF) initiative one year ago, Bank of America has worked closely with both the Department of Treasury and state housing agencies to design and implement the program to provide interim payment assistance to unemployed borrowers, as well as funding for loan modification assistance to delinquent borrowers. We are excited this program is coming to fruition.”

Through the Arizona pilot program, Bank of America customers experiencing financial hardship may be eligible to have the amount owed on their mortgage reduced through matching contributions from the state and from participating mortgage investors. Bank of America has begun mailing letters to customers in those states who may qualify for the assistance based on state program and investor guidelines. The offers are being made proactively in conjunction with the solicitation process for the federal government’s Home Affordable Modification Program.

Bank of America also is finalizing processes for a pilot principal reduction program with the Nevada Affordable Housing Assistance Authority and is in advanced discussions with the California Housing Finance Agency to begin a pilot program with that state.

Bank of America established its leadership in providing solutions for severely underwater homeowners last spring with an innovative principal forgiveness program for eligible customers under its own National Home ownership Retention Program. HHF will provide assistance to additional homeowners who, mainly due to drastic decreases in home values in the last three years, are upside-down on their mortgages.

The HHF unemployment program offers qualified borrowers mortgage payment assistance for up to 36 months while they are unemployed, depending on state program guidelines. Bank of America is currently involved in pilots of unemployment assistance programs in California, North Carolina, South Carolina, Ohio, Oregon, Lee County, Florida, and Washington, DC. Customers who are interested in these programs should work with their state housing finance agencies to determine their eligibility.

Bank of America will continue expanding these programs on a state-by-state basis as agreements are reached with interested housing finance agencies in other HHF-grant states.

All HHF programs are targeted to low- and moderate-income homeowners, and eligibility also depends on investor participation.

Bank of America

Bank of America is one of the world’s largest financial institutions, serving individual consumers, small- and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 57 million consumer and small business relationships with more than 5,800 retail banking offices and approximately 18,000 ATMs and award-winning online banking with 29 million active users. Bank of America is among the world’s leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 4 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients through operations in more than 40 countries. Bank of America Corporation stock (NYSE: BAC) is a component of the Dow Jones Industrial Average and is listed on the New York Stock Exchange.