The warning signs a money launderer wants to buy your home

The following is an excerpt from an article by Lew Sichelman published by MarketWatch on November 27, 2009

...
Financial Crimes Enforcement Network, or FinCen, is considering a rule requiring real estate brokers, among other entities which don't have a direct financial interest in property sales, to file the same suspicious activity reports that lenders are compelled to file when they smell something fishy.
While mortgage fraud and money laundering are often viewed as separate criminal enterprises, FinCen, a bureau within the Treasury department that collects and analyzes information about financial transactions in an effort to combat crime, has found they are often interconnected.
"Despite the relative illiquidity of most real estate assets," the agency says, "money launderers have used residential mortgage transactions -- fraudulently and legitimately structured -- to disguise the proceeds of crime."
It's doubtful unsuspecting sellers will find themselves in trouble with law enforcement if they unknowingly wind up on the receiving end of a money-laundering scheme. You won't be forced to take your house back and return the money to the authorities, for example.
But if there is a connection, you can be found guilty of a crime and the authorities can take your money and your house and put you in jail. So even if you are desperate to sell your place to get out from an underwater mortgage, it is best to resist the temptation.
To protect yourself from becoming a "victim," pay attention to the following warning signs. Alone, one of these red flags may not mean much. But together, they could be an indication that you have been targeted as an easy mark:
· No broker or agent. It's not all that unusual for a ready, willing and able buyer to show up on a seller's front door unannounced -- and unaccompanied by a real estate agent or broker. But if that happens to you proceed cautiously, especially if some of the other warning signs also are prevalent. "In a lot of the fraud schemes we see, there is no Realtor involvement, no unbiased third-party," says Kathy Cooke, fraud investigation manager at mortgage giant Freddie Mac. "A big red flag is a buyer who's set up and ready to go."
· Wire transfers. If the buyer's funds are being wired from another account, especially one from out of the country, or if payments are made from a third party who is not involved in the transaction, the money could be awash in criminal behavior. The same holds for bank drafts which do not state the name of the payer, third-party checks, bearer checks or other anonymous instruments.
· No negotiations. If the buyer does not seem particularly interested in bargaining for a better price, especially in an economy where values in some places are still declining, something could be amiss. Ditto if the buyer shows little interest in when the property will actually be handed over. Be particularly aware of deals in which there is no intention to record the sale, or there is no contract clause penalizing the buyer with the loss of a deposit if the sales does not go forward.
· Hurry, hurry. Beware the buyer who shows a strong interest in completing the transaction quickly. There could be a good reason for the rush, but if the buyer can't give one, your antenna should wiggle.
· No worries. If they buyer doesn't want to look around, give your place the once-over or hire an independent inspector to examine the house, ask yourself what the true motivation might be. Many buyers pass on inspections in a seller's market. But it's a buyer's market now, and only a fool -- or a thief -- would not want one today.
· Intermediaries. Buyers who claim to be working on behalf of minors, incapacitated individuals, groups or persons who appear to lack the economic capacity to afford your property are often not who they say they are.
· Distant places. Transactions involving persons residing in known tax havens or risk territories often are funded by laundered money. So are those involving someone who refuses to reveal a current address or lists it as a post office box.
· Straws. Even if someone offers a handsome "reward," don't allow your name or credit to be used as the buyer of a property. Also, if you believe the buyer is not acting on his own behalf and is trying to hide the identity of the real customers, or if the deal starts out in one person's name and ends up in another without a logical explanation, be careful. Your instincts are usually spot on.
· Flips. If the buyer presents a scheme in which he plans to buy and sell your house several times over in rapid succession at prices significantly greater than what you are receiving, run, don't walk, to the nearest exit.

Be wise, be safe.

First Time Homebuyers Credit Audit Documentation

First Time Homebuyers Credit Audit Documentation
2009-10-23 by Eva Rosenberg

If you have filed for the First Time Homebuyers Credit and your refund has been delayed, it’s because IRS will, sooner or later contact you for proof of the purchase of your home.
[Source: IRS National Phone Forum Presentation Oct 2009]
Required Documentation for Audits
· • Copy of closing contract (HUD-1 Settlement Statement)
· • Most recent monthly mortgage statement
· • Occupancy permit, if newly-constructed
· • At least two of the following showing name and address:– Current driver’s license or other state-issued identification– Recent pay statement (within the last two months)– Recent bank statement (within the last two months)– Current automobile registration

30-year fixed-rate mortgage below 5% for five of the last seven weeks

The following article is from www.MarketWatch.com.
************************
Nov. 12, 2009, 10:42 a.m. EST
Mortgage rates drop: Freddie Mac
30-year fixed-rate mortgage below 5% for five of the last seven weeks
By Amy Hoak, MarketWatch

CHICAGO (MarketWatch) -- Mortgage rates fell this week, with long-term mortgage rates hitting their lowest levels in five weeks, Freddie Mac reported on Thursday.
The 30-year fixed-rate mortgage has been below 5% for five of the last seven weeks, according to Freddie Mac's weekly survey of conforming mortgage rates. The mortgage averaged 4.91% for the week ending Nov. 12, down from last week's 4.98% average. It averaged 6.14% a year ago.
Stacey Delo talks with John Spence of MarketWatch about action in home builders, as their shares rise following a positive Toll's report and other developments.
Fifteen-year fixed-rate mortgages averaged 4.36% this week, down from last week's 4.40% average. The mortgage averaged 5.81% a year ago.
Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 4.29% this week, down from 4.35% last week and 5.98% a year ago. And 1-year Treasury-indexed ARMs averaged 4.46%, down from 4.47% last week and 5.33% a year ago.
To obtain the rates, the 30-year fixed-rate mortgage required payment of an average 0.7 point, while the 15-year fixed-rate mortgage, the 5-year ARM and the 1-year ARM required an average 0.6 point. A point is 1% of the mortgage amount, charged as prepaid interest. Read four strategies for refinancing in a low-interest-rate environment.
"Mortgage rates eased further over the week, helping to promote an affordable home-purchase market and stimulate refinance," said Frank Nothaft, Freddie Mac chief economist, in a news release. "This comes at a time when house-price declines are moderating and consumer demand for prime mortgages at commercial banks has picked up."
"The National Association of Realtors reported that national median sales price of existing homes fell 11.2% in the third quarter relative to the same period last year. Moreover, almost 20% of the top metropolitan areas experienced positive annual growth, compared to only about 12% in the first quarter of this year," Nothaft said.
Also on Thursday, the Mortgage Bankers Association reported that the volume of mortgage applications filed to purchase homes for the week ending Nov. 6 hit their lowest level in nearly nine years. Read about the weekly mortgage application data.

The following is an excerpt heavily edited (condensed) from a full article authored by Ethan Roberts, contributing editor of The Tycoon Report and distributed on 11/06/09.

Beware These 5 Caveats When Buying a Foreclosure
Friday, November 6, 2009
Thanks to the tax credit for first-time homebuyers along with low interest rates, home sales have been creeping up during the past few months. However, a very large percentage of home sales are either foreclosures or short sales.
First-time buyers and investors alike are looking for a deal -- whether as a safeguard against further market decline, as a way to lower their monthly payment, or as a vehicle to increase potential profits.
BUT NOT SO FAST!
If you are not careful, you might get a home at a great price, but you can also inherit some big problems. So that you don't find yourself investing in a money pit, I'd like to talk to you about some of the most-common problems you might encounter today.
1. You Get What They Don't Pay for
First, what you must realize about foreclosures is that they are often neglected by their former owners. The routine-maintenance projects that people do to keep up their homes are usually not done, because the owner cannot afford to do them.
2. Beware of a Real 'Steal'
Second, with some foreclosures there is a problem with theft or vandalism. It is bad enough when the thefts occur prior to your bidding on the property. At least then you know what is missing and can bid accordingly. However, sometimes the thefts or vandalism occur after you have already gone to contract.
3. Know Your Boundaries
Third, although the banks will not usually pay for a survey, make sure that you have one done. Most mortgage companies will demand that a survey be performed, but it is recommended even on cash deals.
4. Know Whether the Deed is Really Done
Fourth, understand that sometimes with foreclosures, there are title problems that can delay or even prevent the closing from taking place.
Also be sure that you are getting owners' title insurance, and lenders' title insurance as well if you are taking out a loan. One time, I was the selling agent on a foreclosure. After the closing, it was discovered that there was a $25,000 lien on the house that was missed by the title company that closed the escrow.
5. Don't Spend a Dime Till You Can Say 'The Title is Mine'
Fifth, if the foreclosure you are buying is sold at public auction, in some states you cannot receive the certificate of title for 10 days. During that time, the previous owner has the right to pay off his mortgage debt in full and reclaim his home.
So, you had better wait until you have the certificate in hand before starting any work on the house. Otherwise, you might just wind up remodeling another person's home for free!
So, these are the five caveats that I wish to leave you with today. At any rate, I do want to emphasize that buying a foreclosure (or sometimes a short sale if it's cheap enough), can be a great way to find a home that might otherwise not be affordable, or that may provide you with a great deal of instant equity.
But just be careful, do all your due diligence, have all the inspections done, etc. You may just save yourself a whole lot of time, inconvenience and money!

Ethan Roberts, Contributing Editor, The Tycoon Report

Source: www.tycoonreport.tycoonresearch.com/ 11/06/2009

Closing time: Home buyers' closing costs vary widely by region: Study

By Amy Hoak, MarketWatch, October 16, 2009
CHICAGO (MarketWatch) -- If you're buying a home in Maryland, be prepared: That state has the highest average closing costs in the country. Wisconsin has the lowest closing costs -- and the difference is substantial, according to a recent study.
Home buyers in Maryland pay an average $8,209 in closing costs, compared with $3,738 in Wisconsin, according to Closing.com's estimates, based on the purchase of a $177,700 single-family home (the national median existing home price in August), and assuming a 30-year fixed-rate mortgage with an interest rate of 5.25% and a down payment of 20%.
There's "tremendous variance throughout the U.S.," said Tony Farwell, chief executive of ClosingCorp, the parent company of Closing.com, a Web site that helps people estimate the money they'll need to close a home purchase and allows them to comparison-shop for providers.
Buyers in Maryland, Delaware and Vermont typically pay the highest closing costs in the country, while Wisconsin, Colorado, New Mexico and Indiana buyers pay the lowest, according to the report. In general, buyers spend between 2% and 7% of the cost of their home on closing costs, Farwell said.
The calculations include taxes and fees that are set by state and local laws, and other costs that consumers have little direct control over -- including appraisals and credit reports. They also include costs of items such as escrow and title insurance, over which consumers typically have more flexibility to search for deals.
Plan ahead
Closing costs are often an afterthought -- especially for first-time buyers. That can lead to problems if they're already stretching for a down payment. And there are many first-time buyers right now, thanks in part to the first-time home buyer tax credit.
"The fun part of buying the home is the home. You're more focused on the home that you want to purchase and these ancillary fees get lost in the process," Farwell said. But it's important to pay attention to the costs. In today's market "sellers have less equity and buyers less capacity to purchase," he said. "These fees really add up."
Main closing costs will include title insurance, escrow/settlement, home inspection and pest inspection, he said. Home warranties also are common in certain states. Other costs could include inspection of a septic system, a well inspection, or a check for mold or radon. Sometimes a lender will require a land survey to be done, to make sure the property boundaries are accurate.
Buyers can root out savings
"There's ample opportunity to squeeze out some savings by comparing the different categories of closing costs among lenders," said Greg McBride, senior financial analyst for Bankrate.com.
Prepaid costs -- including taxes, prepaid interest, documentary stamps, homeowners insurance and homeowner association fees -- aren't typically at the discretion of the lender, he said. But there are other fees and costs that aren't as set.
"What you want to focus on are the lender fees and third-party fees," he said. Bankrate has a site dedicated to helping people find providers, FeeDisclosure.com.
One of the places to save hundreds of dollars on closing costs is in the selection of a title insurance provider, McBride said.
While in some states there is a mandated rate, or a promulgated rate that sets the cost of title insurance, other states allow for consumers to shop around for the best price, giving them opportunity to lower their costs, he said
Source: www.MarketWatch.com
--------
For other information, visit my website

Join Your HOME TEAM. It is here for you.

Are you looking to buy a home?

As your realtor, I formed a team of top professionals who specialize in the various aspects of buying a home. My HOME TEAM for Buyers provides a full range of professional services to assist each buyer.

For example, experience with hundreds of buyers has convinced me that many buyers could benefit from specialized financial advice as they face major financial decisions related to buying a home. That is why I included an outstanding financial adviser in my team to answer your questions about financial implications of buying a home. This allows you to benefit from the best financial assistance available as you address questions such as these.

· How much can I afford to pay for a home?
· How much can I afford as monthly mortgage payments?
· Which mortgage terms should I seek and which should I avoid?
· How can I assess the many potential lenders to find the best one for me?
· How can I protect my self and family should unexpected situations occur?
· What are the tax benefits of owning a home and how can I take advantage of them?
· How does owning a home affect other aspects of my financial situation?
· Should my spouse and I hold title to the home personally or should the title be in a trust?
· What kinds of insurance would be appropriate?
· What other financial questions should I address?

Charles J. Kinnison of Kinnison Financial Strategies is a member of the HOME TEAM for Buyers. He is a top financial professional who also has decades of successful experience working with clients as they buy homes. As a member of the team, Charles is available for a free initial consultation as you prepare to qualify for your home purchase. I am proud to introduce you to him when you want to address these questions and any other questions with financial implications.

Join Your HOME TEAM. It is here for you.

The HOME TEAM for Buyers is ready when you are.

Legislation Protects Buyers of Foreclosed Properties

California Assembly Bill 957, also known as the "Buyer's Choice Act," was signed into law Oct 13 '09. It protects buyers of foreclosed properties by ensuring they can choose their own real estate service providers, such as title companies and escrow services, etc.

Frequently Asked Questions

• What is the Buyer's Choice Act? It prohibits a seller who acquired property as a foreclosure sale from requiring a buyer to purchase title and escrow services from a company chosen by the seller as a condition to receiving offers or selling the property.
• Who is a seller under the act? A mortgagee or beneficiary under a deed of trust who acquired title to the property at a foreclosure sale, including a trustee, agent, officer or other employee of any mortgagee or beneficiary.
• Can a buyer agree to accept the recommendations of the seller? Yes, provided a written notice of the right to make an independent selcection of those services is first given by the seller to the buyer.
• If a person violates the law, can the sale be set aside? No. A transaction cannot be invalidated solely because of the failure to comply with the law.

Source: California Land Title Association

Jean SellsRealEstate

This is the first post to this blog for Jean SellsRealEstate. It will have more content in the future. For additional information check out my website:

www.JeanSellsRealEstate.com