Mortgage by Randy
monthly update to our clients, colleagues, family & friends
By: Randy Mitchelson, April 2009
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In Issue 13 We Touch On:
$8,000 Tax Credit for First-Time Home Buyers
New Mortgage Refinance Law from Obama
Tax Tips for Divorcing Spouses
April marks the first anniversary of this newsletter. The feedback from readers has helped improve the content, the delivery and the heart that goes into each publication. The newsletter is read by a variety of people. Some are bankers that not only benefit personally from the information, but are then able to add value to their client relationships. The newsletter is also used by real estate professionals and developers to stay current on changes and trends in the mortgage market. The largest constituency of subscribers are heads of households that have busy careers and on-the-go families. The newsletter gives them a quick update on matters that they can use in their everyday lives and pass the knowledge on to their children, colleagues and friends.
In April 2008, the first newsletter, it was written that we wanted to address common needs that people have when it comes to mortgages and personal finance, namely people are:
(1) thirsty for accurate, easy to digest knowledge.
(2) skeptical of what they hear from competing print & television media.
(3) looking for a reliable, trusted advisor to address personal financial questions.
Over the past year we hope that this newsletter has at least partially addressed those needs. Our commitment is there to continue delivering valuable content. Thank you for reading! On to the news....
The current newsletter and all prior newsletters are archived at our blog space mortgagebyrandy.spaces.live.com. Bookmark it and share with your friends and family. You can enter your own comments and feedback as well. Time for the news...
Mortgage Market: Congress Enacts Bigger and Better Tax Credit of up to $8000
A tax credit of up to $8000 is now available for qualified first-time home buyers purchasing a principal residence on or after January 1, 2009 and before December 1, 2009. Unlike the tax credit that we wrote about in 2008, the new credit DOES NOT HAVE TO BE REPAID! Please note that for purposes of this law, the purchase date is defined at the closing date of the transaction.
Notice the words "up to" $8000? To calculate the credit on a specific transaction multiply the home purchase price by 10 percent. In other words, to get the full $8000 credit, the purchase price would have to be $80,000 or higher. There are some income guidelines that must be met as well that are too detailed for this newsletter but the details can be accessed at the Federal Housing Tax Credit website.
This program is available to certain non-resident aliens as well. To apply for this tax credit, complete IRS Form 5405.
Personal Credit: Protect Yourself by Staying Aware of Internet Schemes
Internet crime schemes that steal millions of dollars each year from victims continue to plague the Internet through various methods. The Internet Crime Complaint Center (IC3) is a partnership between the Federal Bureau of Investigation (FBI), the National White Collar Crime Center (NW3C), and the Bureau of Justice Assistance (BJA). The IC3 gives the victims of cyber crime a convenient and easy-to-use reporting mechanism that alerts authorities of suspected criminal or civil violations. IC3 accepts online Internet crime complaints from either the person who believes they were defrauded or from a third party to the complainant. They can best process your complaint if they receive accurate and complete information from you. Therefore, IC3 requests that you provide the following information when filing a complaint on their website:
• Your name
• Your mailing address
• Your telephone number
• The name, address, telephone number, and Web address, if available, of the individual or organization you believe defrauded you.
• Specific details on how, why, and when you believe you were defrauded.
• Any other relevant information you believe is necessary to support your complaint
Visit the IC3 website for Internet crime prevention tips as well as a listing of known and on-going Internet schemes.
Economy & Financial Insights: Tax Tips for Anyone Involved in a Divorce
Tax filing is hard enough, but for those involved in a divorce, it can be even more confusing. Before a divorce is settled, tax filing decisions have to be made like, "Do I file with my spouse or without them?" and "If I file separately, who gets to claim the kids or itemize deductions?" Always consult with a tax professional so all options can be explained and, if possible, both spouses should be present. Worse case, the divorce attorneys representing each spouse should confer.
Both divorcing spouses may not claim the same deductions (kids, mortgage interest, etc), unless they file jointly. If the IRS uncovers double dipping of deductions by the spouses filing separately, one or both of them will be in for a painful, costly and time consuming experience. If one spouse files separately quicker than the other in order to get all the deductions then follow this back-up strategy: the other spouse should work with their tax professional to calculate the cost of the other spouse claiming all the deductions and then have their divorce attorney request that the court consider that the deduction hogging spouse has used a marital asset for their own purpose. To get answers to other specific divorce questions, send me an email and I will refer you to a reliable source.
Question of the Month: My Mortgage is Current but I Need Help - What Are My Options?
Many homeowners are experiencing interest rate adjustments to their mortgage which make their new payment out of reach, especially if someone in the family has lost a job or experienced unexpected medical challenges. It is frustrating for diligent homeowners who have worked extra hard and made sacrifices to make each payment on time only to learn that their lender is unwilling to help unless they fall behind in their payments. This counterintuitive practice may now have a solution thanks to new Obama legislation that just went into effect last month.
President Obama's new mortgage refinance program (just announced in March 2009) may help homeowners, even if their mortgage is as much as 105% of the value of the home. This program only applies for primary residences. Lenders will be paid financial incentives ($1000 per year per loan) through this new government program to help struggling homeowners (sort of a bribe). Lenders should now be more willing to lower the interest rate on some loans so that the monthly payment is no more than 31-38% of the homeowner's gross monthly income. Also, under this program, homeowners will receive up to $5000 ($1000 per year for 5 years) to reduce the balance owed if they make on time mortgage payments throughout those years (a means of balance forgiveness).
To get started, homeowners must first call their lender. When talking to the lender keep good notes about who you spoke to and when as well as the information provided. If the lender refuses to help, the next call should be to the Hope Now Hotline (toll free 888-995-HOPE) and speak with a federally certified housing counselor.
Avoid working with companies that are advertising that they can help modify mortgages for a fee (see Feb 2009 Mortgage by Randy newsletter on Loan Modification Nightmares). Work through these other options first. Do some homework and become informed by reading the details on the Hope Now website as well as HUD website.
Giving Back: Supporting Our Communities - Calling All Angels to Author Personal Experiences!
Do you believe in angels? The Michelle's Angels Foundation is seeking volunteers to author either one-time or regular contributions to their online newsletter. Its mission is to provide love, hope and assistance to those facing any one of a wide range of illnesses or life's challenges. The Foundation's website serves as the principal vehicle to aid others and their loved ones. If you have personal experience (albeit with a spouse, parent or child) with any of life's many illnesses, like cancer, the information that you can share will be invaluable to others that are faced with similar challenges. Submit your contact information to Michelle's Angels and one of the organization's founders will be in touch to see how you can help.
Need volunteers? Do you have a fundraising event upcoming? Do you have a personal web site where you are raising donations for your cause? Submit the information to randy@mortgagebyrandy.com by the 5th day of each month and we will do our best to include your information in the next issue.
Nashville in July! If you love great live music, celebrating with fun people and a contributing to a great cause, keep the weekend of July 10 open on your calendar and find a way to get to Nashville. Details coming soon!
Randy
Mortgage by Randy newsletter, Copyright 2009 Randy Mitchelson. All Rights Reserved.
Randy Mitchelson is a licensed mortgage professional. All material presented herein is believed to be reliable but we cannot attest to its accuracy. All material represents the opinions of Randy Mitchelson. Recommendations may change and readers are urged to check with their financial advisors before making any decisions. Opinions expressed in these reports may change without prior notice. Mitchelson can be reached at 239-851-6738.
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You have permission to publish this article electronically or in print as long as the following is included:
Randy Mitchelson, of Estero, Florida, is a business professional, entrepreneur and author with 15 years experience in financial services. Mitchelson has served in leadership roles for Global & Fortune 500 firms like Bank of America, KeyBank and CIBC.
As a member of National Association of Mortgage Brokers, Randy has earned the Lending Integrity Seal of Approval. He educates both individuals and groups about credit scoring by conducting personalized credit report reviews, action plans and one on one consultations. He is author of the free monthly newsletter, Mortgage by Randy, accessible at mortgagebyrandy.spaces.live.com. A licensed mortgage professional, Mitchelson also founded Trinity Home Financing, LLC.
He is owner of Estero, Florida based National Web Leads, LLC (www.nationalwebleads.com), an Internet lead generation service matching consumer finance lenders with customers. Through its network of partners, National Web Leads, LLC delivers innovative Web 2.0 software solutions such as lead generation platforms and real time desktop widget and mobile reporting tools for internet marketers.
Mitchelson earned his BS and MBA at Rensselaer Polytechnic Institute in Troy, NY. He is a founding member and Finance Chairman of the Southwest Florida Regional Technology Partnership Inc. (www.swfrtp.org) and Vice President, Strategic Planning for the Michelle's Angels Foundation Inc. (www.michellesangels.com). He is married to Susan, a Pharmacy Supervisor in the Lee Memorial Health System in Fort Myers, Florida.
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