Suzy explains the past tax consequenses of a short sale and how the new "Mortgage Forgiveness Debt Relief Act of 2007 H.R. 3648" helps people trying to complete a short sale
December 2009
Mortgage Rates Rise for Second Straight Week.
U.S. mortgage rates rose for a second consecutive week as Treasury yields climbed, a move that does not bode well for the hard-hit U.S. housing market.
Interest rates on U.S. 30-year fixed-rate mortgages averaged 5.25 percent this week, up from last week's 5.20 percent, according to a survey released on Thursday by home funding company Freddie Mac.
The mortgage rate was also significantly higher than the record low of 4.78 percent set the week ending April 2. Freddie Mac started the Primary Mortgage Market Survey in 1971.
Mortgage rates remained above 5 percent for a ninth straight week. Experts say mortgage rates at 5 percent and below are necessary to make a significant impact on home loan demand.
Treasury yields, which are linked to mortgage rates, have risen recently, with mortgage rates responding in kind.
Home prices in the United States have been falling for nearly three years, and the decline may well continue for some time.
Even the federal government has projected price decreases through 2010. As a baseline, the stress tests recently performed on big banks included a total fall in housing prices of 41 percent from 2006 through 2010. Their “more adverse” forecast projected a drop of 48 percent — suggesting that important housing ratios, like price to rent, and price to construction cost — would fall to their lowest levels in 20 years.
Such long, steady housing price declines seem to defy both common sense and the traditional laws of economics, which assume that people act rationally and that markets are efficient. Why would a sensible person watch the value of his home fall for years, only to sell for a big loss? Why not sell early in the cycle? If people acted as the efficient-market theory says they should, prices would come down right away, not gradually over years, and these cycles would be much shorter.
But something is definitely different about real estate. Long declines do happen with some regularity. And despite the uptick last week in pending home sales and recent improvement in consumer confidence, we still appear to be in a continuing price decline.
There are many historical examples. After the bursting of the Japanese housing bubble in 1991, land prices in Japan’s major cities fell every single year for 15 years. ...
Home sales in the Twin Cities rose 21 percent in March, thanks in part to lower interest rates and new federal tax credits, area Realtors said this morning.
There were 4,407 pending sales in March, up 21.3 percent from a year ago, according to data released by the Minneapolis Area Association of Realtors.
That's 10 consecutive months of year-over-year increases in pending sales and the largest such increase since December -- another month in which mortgage rates dropped precipitously.
In a prepared statement, the association said the increase was more than just a seasonal shift.
"Low rates and ridiculous affordability are driving this deal," said Steve Havig, president of the association. "The $8,000 federal tax credit for first-time home buyers adds fuel to the fire."
But the report also showed a continued slide in home prices. The median sale price for all properties was $154,125 in March, down 22.9 percent from a year ago. The association attributed that to increased prevalence of foreclosures and short sales. The median March sale price of traditional homes was $215,000, down 2.3 percent from a year ago.
Star Tribune
August 2009
The Obama administration kicked off a new program that's designed to help up to 9 million borrowers stay in their homes through refinanced mortgages or loans that are modified to lower monthly payments.
LATESTNEWS
Tax Rules for Short Sales - Foreclosures
Past tax consequenses of a short sale and how the new "Mortgage Forgiveness Debt Relief Act of 2007 H.R. 3648" helps people trying to complete a short sale
