The Blog

STATE ATTORNEYS GENERAL MEETING TO DISCUSS MORTGAGE INVESTIGATIONS
Frustrated with the pace and lack of progress with settlement discussions with banks over foreclosures, several state Attorneys General met in Washington this week to discuss the investigations into the mortgage and foreclosure industries and possibilities for future investigations that might be helpful to the situation. Massachusetts Attorney General Martha Coakley was involved in the meeting, speaking of her own investigation, and about the ongoing litigation against North Carolina-based Bank of America, New York-based JPMorgan, Citigroup Inc., Wells Fargo & Co. and Ally Financial, Inc. Also under discussion was Delaware’s lawsuit against Mortgage Electronic Registration Systems Inc. (MERS), and Nevada’s lawsuit against Bank of America, according to an undisclosed participant. Over the weekend, four smaller servicers were contacted by the Justice Department in an effort to include them in any settlement agreement reached with the major banks. This will certainly bear watching in the coming months as any agreements reached would affect foreclosures and mortgages in the future.

DO I OWE THE IRS TAXES ON FORGIVEN DEBT?
Generally, no (thanks to Congress passing the Mortgage Debt Relief Act in 2007). It used to be the case that if you did a short sale or were foreclosed on, any forgiven debt would be taxed as income by the IRS, even though you would not see a penny of it in your pocket. Since passage of the Act in 2007, however, this is no longer the case for many. Unless you had a large cash-out refinance, where the money taken out was not spent on home improvements, or if your forgiveness was over $2 million dollars (and even if it was you are only taxed on forgiven debt over that amount), or if the forgiveness was for a second home, rental property or a vacation home, you owe nothing to the IRS on this “income.” Of course, you should always consult a qualified tax attorney or professional to get advice regarding taxes. More information can be obtained by ordering a free copy of IRS publication No. 4681, “Canceled Debts, Foreclosures, Repossessions and Abandonment,” available for download at irs.gov, or by calling (800) 829-3676.

We wanted to be sure that you were aware that we are expanding our practice to include Chapter 7 and Chapter 11 Individual Bankruptcy Representation, in addition to our longstanding practice of Real Estate Law which includes short sales, loan modifications and purchases and sales, among other services. Importantly, this will provide us with another in-house tool to prevent foreclosures.

Bankruptcies are an often-misunderstood area of the law. In both Chapter 7 and Chapter 13 Bankruptcies, there is a detailed accounting of all your debts, incomes, assets and expenses. Depending on your financial situation, and your ability to repay debts over time, we will help you decide whether to file a Chapter 7 Bankruptcy, which is basically described as liquidation, where all debts are discharged outright and certain personal property can be exempted; and a Chapter 13 Bankruptcy, which is essentially a structured repayment plan, and can allow you to avoid foreclosure while keeping your home and other assets when possible.

Mass. foreclosures spiked 70 percent in November
www.patriotledger.com
The number of foreclosures completed in Massachusetts was 70 percent higher in November compared to the same month last year, according to the Warren Group, publisher of Banker & Tradesman.

WHAT IS A SHORT SALE?
A “short sale” is a sale of a home or property where the mortgage is for more than the property is currently worth, the owner is having financial difficulty, and the lender agrees to sell the property in full satisfaction of the mortgage, although the proceeds do not cover the whole amount owed. (Not all lenders agree to discharge the mortgage in full, and still seek all or part of the difference, however.) Short sales are far less damaging to a seller’s credit rating than a foreclosure or bankruptcy would be, and are better for lenders as well, who have to pay a lot of money to go through the foreclosure process, and typically recover less for the same property than they would in a short sale. Therefore, it’s really a win-win for everyone, considering that the inflated real estate prices in the past are not expected to return soon- or perhaps ever. These transactions can be extremely time-consuming and complex, and most property owners need assistance in getting the bank to agree to a short sale. For more information about short sales or any other real estate transaction, contact our office.

Bottom Line - Increase in short sales give market a little breathing room
bottomline.msnbc.msn.com
It's a tarnished silver lining for people at risk of losing their houses and homeowners in neighborhoods blighted by bank-owned properties, but the robosigning scandal that slowed the foreclosure process to a crawl appears to have increased lender interest in short sales. …

TOP NINE MARKETS FOR REAL ESTATE- 2012
Home.org has released its predictions for the top nine markets across the country that will be worth watching. Cambridge, Massachusetts is again on this list, based on lower-than-average unemployment and less drastic drops in real estate prices compared to national figures. Others making the list were Washington, DC, Santa Fe, NM, Bremerton, WA, Orlando, FL, Rochester, NY, Austin, TX, Houston, TX, and Chicago, IL. The ratings were based on several market factors including affordability, appreciation potential, area unemployment/job potential, and median prices.

What the heck is Equator anyway?
Equator provides technology systems to help financial institutions manage their real property assets. Equator has a Short Sale Module to help improve and streamline the short sale process given the recent mortgage crisis and increase in short sales. This module improves and speeds up the short sale process by creating an electronic database which all parties involved may access electronically. All information pertaining to the short sale is then kept in this database where information can be uploaded and updates can be obtained in real-time. This cuts down on the time, expense, and hassle of having to send these documents back and forth and makes it so these documents do not fall through the cracks but are instead easily accessible to anyone needing them at anytime. In cooperation with certain financial institutions, Equator has started to offer services that allow for Proactive short sales, in which the short sale approval process is started without a buyer actually making an offer. Then the financial institution will approve the sale of the property for a certain price. The property can then be sold to a buyer that agrees to such price without having to go through the long process of getting approval of the sale.