Home is where the fraud is

[tag]Mortgage fraud[/tag] has blossomed into one of the fastest growing [tag]white-collar crime[/tag]s in the country, putting [tag]homeowner[/tag]s on the hook for overpriced houses and pushing up i[tag]nterest rate[/tag]s for all [tag]home-loan[/tag] borrowers. In some cases, scammers purchase dilapidated buildings, obtain fake appraisals to inflate the value and sell the homes for far more than they’re worth.

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Or, fraudsters will find novice real-estate investors and convince them to sell their good name and credit record. In return, scammers promise to arrange a loan on an investment property, find tenants, make mortgage payments and sell the property for huge profits once it appreciates. Instead, the fraudsters use the borrower’s name on [tag]loan document[/tag]s — and then walk away with hundreds of thousands of dollars in loan proceeds. “No tenants are found, no rental payments are collected, no mortgage payments are made, the house goes into default, turns out it’s not worth anything, and the borrower is left holding the bag and their credit is destroyed,” said Rachel Dollar, an attorney in Santa Rosa, Calif., who represents lenders in mortgage-fraud cases. Continue reading “Home is where the fraud is”

The flip side of real estate

The Pre-Foreclosure Property Investor\'s Kit : How to Make Money Buying Distressed Real Estate -- Before the Public Auction

Inspired by exuberant [tag]real estate[/tag] pundits and late-night TV pitchmen, many homeowners may now be convinced that [tag]home flipping[/tag] is a better investment than the [tag]stock market[/tag]. But advocates of a nothing-down, double-your-money-in-a-year strategy often fail to mention potential pitfalls. There are obvious downsides — failing to budget properly and overspending on repairs — but the bigger hazards include market volatility and unforeseen tax consequences. As a result, brokers and accountants who work with flippers say that for every smart investor such as King, there are dozens who lose their shirts or, worse, their savings.

Topping the list of pitfalls is the sheer unpredictability of the market. Former film editor Bill Brame, a Westwood, Calif., real estate agent who has flipped homes since 1989 and has several such clients, recalls how the market turned on him when he least expected it. After starting out with a couple of homes, Brame had created a virtual empire by the early ’90s. He had 14 houses going at once, with three crews of renovators working full time to rebuild cracked foundations, repair leaky roofs, paint, plumb and generally transform fixer-uppers into top-dollar properties. Then, in 1993, the market took a dive. Unable to keep up with mortgage payments, Brame was forced to sell most of his homes at a loss and lay off his crews. Continue reading “The flip side of real estate”

When is a condo not a condo?

A condo-hotel is a legal framework virtually unheard of in [tag]Florida[/tag]’s [tag]real estate[/tag] industry, where sales staffs are warned against marketing property as investments for fear of running afoul of federal security laws. And it could involve hundreds of thousands in dollars in [tag]registration fee[/tag]s, awkward disclosure documents, strict advertising controls and extra exposure to litigation should buyers end up unhappy. The Mortgage Originator Success Kit : The Quick Way to a Six-Figure Income

By declaring the property as a security, the [tag]developer[/tag] would defy conventional wisdom in the real estate industry but confirm the assumption that many condo buyers are investors looking for a profit. Many see profit — or at least [tag]cash flow[/tag] — as a main selling point for [tag]condo-hotel[/tag]s, which offer title to hotel rooms that owners can then rent out for a share of the rental income. ”You’re buying into what is really a business, just as if you were buying a stock in any other business,” said Bart Bartholdt, a lawyer with Graham & Dunn in Seattle, who wrote an article on how to avoid security-law infractions while selling condo-hotels. Continue reading “When is a condo not a condo?”

Seven Tips for Making a Home Buying Decision You Won’t Regret

Home Buying for Dummies

If you’re a first time home shopper, you’re probably feeling a bit of confusion. But don’t worry, While buying that Tudor, ranch, or brownstone is a bit more complex than buying say, a latte, it is doable. Just gather your thoughts, turn on your reading lamp, and take some advice from real estate and financial gurus Eric Tyson and Ray Brown.

Co-authors of Home Buying for Dummies, 3rd Edition (Wiley, January 2006, ISBN: 0471768472)-the newest version of America’s number-one best-selling home buying book-Tyson and Brown insist that although the idea of purchasing a home for inexperienced buyers can appear daunting, it can be done painlessly if you follow the Boy Scout mott Be prepared.”When people have bad experiences buying a home it usually isn’t due to lack of intelligence or good intentions,” asserts Tyson, who has decades of experience in dealing with real estate. “Rather it is a result of not knowing the right questions to ask and the proper steps to take. That’s why we have provided the essential tools for anyone ready to leave leases and landlords behind or trade up.” Continue reading “Seven Tips for Making a Home Buying Decision You Won’t Regret”

Student real-estate agents cashing in on local market

Michael Havens is trying to sell a $589,000 house in northeast [tag]Tallahassee[/tag]. It’s not a gimmick. He’s not hustling homes on [tag]eBay[/tag]. Havens, 21, is a full-time [tag]FSU[/tag] student and an agent for [tag]Volare Real Estate[/tag]. Havens wanted to get his real-world experience now while the market is good. Florida is a hot bed of real-estate activity.

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Dean Gatzloff, a department chairman in [tag]Florida State University[/tag]’s [tag]College of Business[/tag], said over the next 25 years, Florida’s population is projected to increase by about 12 million. The historically low interest rates are major contributors to the growing interest in real estate by consumers, investors, developers and students. Before 2001, the college averaged about 120 real-estate students. Now it has 420. Though there isn’t a real-estate program at [tag]Florida A&M University[/tag], Booker Warren, professional-development coordinator in the [tag]School of Business and Industry[/tag], said students have shown an interest in real estate. The once-dormant Real Estate Club of FAMU resurfaced last semester. Continue reading “Student real-estate agents cashing in on local market”

Home-business deduction and your taxes.

House Beautiful: Decorating with Sheets & Slipcovers It’s easy for [tag]taxpayer[/tag]s to deduct the cost of a [tag]home office[/tag]. To qualify for a [tag]deduction[/tag], the space must be used exclusively and on a regular basis for either the entire business or its administrative and management activities.

A home-office deduction is comprised mainly of depreciation, utilities and [tag]insurance[/tag]. For example, if a home has 2,500 square feet and the detached garage, now deemed “the office,” is 250 square feet, then 10 percent of the utilities and insurance are deductible. The actual office depreciation is 10 percent of what would be a [tag]depreciation[/tag] deduction if the entire home were being depreciated for tax purposes. (Depreciation is not allowed on a typical principal residence, so the square footage allotted to “residence” would not qualify.) Supplies and other expenses directly related to the home office are fully deductible. Continue reading “Home-business deduction and your taxes.”

Vacation and second homes now total 40% of residential sales

Sales of second and [tag]vacation home[/tag]s increased substantially in 2005 to a record nearly 40% of all U.S. housing sales. The [tag]National Association of Realtors[/tag] recently said that sales of vacation homes rose 16.9% to a record 1.02 million, while sales of homes owned for investment purposes increased by 15.7% to a record 2.32 million.

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Sales of vacation homes are likely to remain healthy in 2006, said David Lereah, chief economist for the Realtors. “[tag]Baby boomers[/tag] are favorably positioned in terms of affordability, as well as being at the stage in life when people are most interested in making that kind of a lifestyle purchase.” Continue reading “Vacation and second homes now total 40% of residential sales”

The add a second home strategy

Organizing from the Inside Out, second edition : The Foolproof System For Organizing Your Home, Your Office and Your Life

Thinking about buying a 2nd home? The annual number of [tag]second home[/tag]s purchased in the United States doubled between 2000 and 2004, according to new research. The boom is being driven in part by [tag]demographics[/tag] — mainly a flood of equity-laden [tag]baby boomer[/tag]s — and in part by a largely unexpected ricochet effect of tax law changes in the late 1990s


When [tag]Congress[/tag] amended the federal tax code in 1997 to permit up to $500,000 (for married couples) and $250,000 (for singles) of gain on the sale of a [tag]primary home[/tag] to be spared from taxation, observed Chung, “homeowners did not have to buy expensive [replacement] homes anymore.” Under prior law, the only way to avoid [tag]capital gains tax[/tag]es was to ”roll over” sales gains to progressively larger and costlier homes. The amended tax code, by contrast, allows primary home sellers to buy ”a smaller, less expensive primary residence,” while using a portion of the $500,000 or $250,000 tax-sheltered gain to buy or make a down payment on a second home — for use either as a recreational property or as an investment vehicle. Continue reading “The add a second home strategy”

Mortgage Rates Increase to 6.35%

Rates on [tag]30-year mortgages[/tag] rose this week after the [tag]Federal Reserve[/tag] pushed a key [tag]short-term rate[/tag] up for the 15th time and indicated that more rate increases were possible. Mortgage giant [tag]Freddie Mac[/tag] reported Thursday that rates on 30-year, [tag]fixed-rate mortgage[/tag]s averaged 6.35 percent this week, up from 6.32 percent last week.

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Rising mortgage rates are expected to cool off the extended boom in housing that saw sales of both new and existing homes set records for five consecutive years. Analysts are looking for sales to drop by around 6 percent this year. Rates on 15-year, fixed-rate mortgages, a popular choice for [tag]refinancing a home mortgage[/tag], averaged 6 percent this week, up from 5.97 percent last week. One-year adjustable-rate mortgages rose to 5.51 percent, up from 5.41 percent last week. Continue reading “Mortgage Rates Increase to 6.35%”

Rules of real estate change with the marketplace.

Mortgages For Dummies, 2nd Edition

As the spring selling season begins, the cooling [tag]housing market[/tag] is affecting the conventional wisdom that guided buyers and sellers during the housing boom. The number of homes for sale has climbed about 30 percent over a 12-month period, reaching its highest level in nearly 10 years, according to the [tag]National Association of Realtors[/tag].

Say goodbye to the days when sellers could simply look at what their neighbor’s house sold for and then list theirs for 10 percent more. Overpriced homes may never even catch the eye of their intended audience. That’s because [tag]buyer[/tag]s and [tag]broker[/tag]s increasingly rely on computers to screen listings based on price, size and other parameters when new properties come to market. Continue reading “Rules of real estate change with the marketplace.”