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.
Friday, November 27, 2009
Friday, November 20, 2009
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
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
Thursday, November 12, 2009
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.
************************
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.
Friday, November 6, 2009
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
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
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