WASHINGTON (CNNMoney.com) -- States have until the close of the business day to agree to the latest draft deal aimed at relieving homeowners struggling with mortgages bigger than their home's value.

Attorneys general from California and New York, who had been cold to the deal in past weeks, are now involved in talks that could signal their participation.

A source close to the talks told CNN that California Attorney General Kamala Harris is now inclined to sign on to the deal.

New York Attorney General Eric Schneiderman is also talking with negotiators, sources say.

Federal officials and state attorneys general could announce -- perhaps as early as this week -- a deal with some of the nation's largest banks that could yield up to $25 billion for those homeowners. That would be more than any housing relief program has produced since the financial crisis began.

Obama proposes new home refinancing plan

Under the latest draft, about 1 million U.S. homeowners who are "underwater" on their mortgages -- with principal exceeding the home's value -- could be eligible for as much as $20,000 in relief of principal owed, according to U.S. Housing and Urban Development Secretary Shaun Donovan.

In return, mortgage servicers in states that agree to the deal would get immunity from future state servicing and originating claims -- although homeowners could pursue claims against banks and states could still pursue criminal investigations, according to reports.

Driving the deal originally were allegations that mortgage servicers cut corners and enlisted robo-signers that improperly foreclosed on homeowners. However, the deal under negotiation now wouldn't be able to return houses to those who have already been foreclosed on, according to reports.

What the deal would do is ensure that mortgage servicers agree to communicate better, avoid delays and give homeowners who are late on mortgage payments a fairer shake.

The big question is how much money would be available to help homeowners, but that depends on how many states agree to the deal. If all 50 states sign on, the mortgage servicing settlement has the potential to offer as much as $25 billion. But without California, the nation's largest state, the pot would be several billion dollars smaller.

Last week, California's Harris and Attorney General Beau Biden of Delaware said the deal, as drafted, wasn't good enough for their states.

New York's Schneiderman was tight-lipped about his participation when asked. Calls to his office on Monday weren't returned.

Generally, the attorneys general have said they're worried they if they agree to the deal it would cripple their own investigations into mortgage cases.

But California's Harris is more comfortable that the deal will leave her room to pursue her own investigations and lawsuits, a source close to the talks told CNN.

At least one consumer advocacy group, the Center for Responsible Lending, has said the deal -- while "no silver bullet" -- leaves room to hold banks accountable in other mortgage probes, said Kathleen Day, a spokeswoman for the nonprofit.

The negotiations are between federal agencies, including the U.S. Department of Justice and the U.S. Department of Housing and Urban Development, as well as the state attorneys general and the five largest mortgage servicers:Bank of America (BAC, Fortune 500), Wells Fargo (WFC, Fortune 500), JPMorgan Chase (JPM, Fortune 500), Citigroup (C, Fortune 500) and Ally Financial (GJM). A few other regional banks that service mortgages are reportedly considering signing on as well.

The big banks aren't as keen to sign off on a multi-state deal that doesn't include immunity from mortgage servicing claims from California's and New York's attorneys general, said a source familiar with the deals.

And left-leaning groups, including Move On and the New Bottom Line, are continuing to urge states to hold out for a big criminal investigation and a $300 billion settlement award.

-- CNN's Jessica Yellin and CNNMoney's Erica Fink contributed to this report.

Published: January 5, 2012

Get an “A” on your Schedule A Form: Dodge these tax deduction pitfalls to save time, money, and an IRS investigation.

Trap #1: Line 6 - real estate taxes

Your monthly mortgage payment often includes money for a tax escrow, from which the lender pays your local real estate taxes.

The money you send the bank may be more than what the bank pays for your taxes, says Julian Block, a tax attorney and author of Julian Block’s Home Seller’s Guide to Tax Savings. That will lead you to putting the wrong number on Schedule A.

Example:

• Your monthly payment to the lender: $2,000 for mortgage + $500 escrow for taxes

• Your annual property tax bill: $5,500

Now do the math:

• Your bank received $6,000 for real estate taxes, but only paid $5,500. It may keep the extra $500 to apply to the next tax bill or refund it to you at some point, but meanwhile, you’re making a mistake if you enter $6,000 on Schedule A.

• Instead, take the number from Form 1098—which your bank sends you each year—that shows the actual taxes paid.

Trap #2: Line 6 - tax calculations for recent buyers and sellers

If you bought or sold a home in the middle of 2011, figuring out what to put on line 6 of your Schedule A Form is tricky.

Don’t simply enter the number from your property tax bill on line 6 as you would if you owned the house the whole year. If you bought or sold a house in midyear, you should instead use the property tax amount listed on your HUD-1 closing statement, says Phil Marti, a retired IRS official.

Here’s why: Generally, depending on the local tax cycle, either the seller gives the buyer money to pay the taxes when they come due or, if the seller has already paid taxes, the buyer reimburses the seller at closing. Those taxes are deductible that year, but won’t be reflected on your property tax bill.

Trap #3: Line 10 - properly deducting points

You can deduct points paid on a refinance, but not all at once, says David Sands, a CPA with Buchbinder Tunick & Co LLP. Rather, you deduct them over the life of your loan. So if you paid $1,000 in points for a 10-year refinance, you’re entitled to deduct only $100 per year on your Schedule A Form.

Trap #4: Line 10 - HELOC limits

If you took out a home equity line of credit (HELOC), you can generally deduct the interest on it only up to $100,000 of debt each year, says Matthew Lender, a CPA with EisnerLubin LLP.

For example, if you have a HELOC for $200,000, the bank will send you Form 1098 for interest paid on $200,000. But you can deduct only the interest paid on $100,000. If you just pull the number off Form 1098, you’ll deduct more than you’re entitled to.

Trap #5: line 13 - Private mortgage insurance

You can deduct PMI on your Schedule A Form, as long as you started paying the insurance after Dec. 31, 2006. Unless Congress acts to extend the PMI deduction, however, 2011 is the last year for which you can take this deduction. (Also, this is also a good time to review your PMI: You might be able to cancel your PMI altogether because you’ve had a change in loan-to-value status.)

Trap #6: line 20 - casualty and theft losses

You can deduct part or all of losses caused by theft, vandalism, fire, or similar causes, as well as corrosive drywall, but the process isn’t always obvious or simple:

• Only deduct losses that are greater than 10% of your adjusted gross income (line 38 of Form 1040).

• Fill out Form 4684, which involves complex calculations for the cost basis and fair market value.  This form gives you the number you need for line 20. 

Bottom line on line 20: If you’ve got extensive losses, it’s best to consult a tax pro. “I wouldn’t do it myself, and I’ve been dealing with taxes for 40 years,” says former IRS official Marti.

This article provides general information about tax laws and consequences, but shouldn’t be relied upon as tax or legal advice applicable to particular transactions or circumstances. Consult a tax professional for such advice; tax laws may vary by jurisdiction.

Published: December 28, 2011

We explain the tax details around giving the gift of a home down payment.

With lots of inventory and low home prices, your gift of a down payment to your credit-worthy children can be a stepping stone to getting into a first or next house. A nice thought at this time of year. (I’m speaking both of the holidays and the upcoming tax season.) Speaking of which, there are rules — like there’s no tax deduction for giving a non-charitable gift. But your gift of up to $13,000 can be given tax-free.

My husband and I used our parents’ generous wedding gift as a down payment rather than spend it all on the wedding. And we’re not the only couple boosted into home ownership by parents, according to blogger Amy Hoak. She says about one-quarter of first-time home buyers get a down payment gift from relatives or friends (note to my friends: My birthday is coming up in February and nothing says you’re my BFF like a down payment!).

“Many times a gift will allow a buyer to make a down payment without severely depleting their savings — a big plus in an uncertain economy,” writes Hoak. “Most lenders will require borrowers to have some money in the bank after closing. And some parents would rather their adult children keep saving for a rainy day than use all of their funds to make a down payment.”

The rules for using down payment gifts differ depending on which lender you use and whether your loan is guaranteed by Fannie Mae, Freddie Mac, or FHA. Hoak outlines the rules for each in her blog.

If you’re the one making the down payment gift, you won’t have to pay federal income tax, nor will the recipient, as long as you give $13,000 or less in 2011 or 2012. You can give up to $13,000 per person without tax implication to any number of people in one year.

In addition, you and your spouse can each give separate gifts to your child. The IRS calls this gift splitting. For instance, if you’re planning to give to your two children, you and your spouse can each give each child up to $13,000 for a total of $52,000 ($13,000 x 4), says CPA Sue Medicus, owner of Liberty Tax Service in Catonsville, Md.

If you want to give more, you still may not owe taxes, but you have to inform the IRS of your gift using Form 709. Check with your tax adviser to see if the amount above $13,000 counts against a lifetime exclusion that we all get to use to pass along assets via gifts and estates, Medicus says.

You can’t deduct the value of gifts you make (other than gifts that are deductible charitable contributions) or any federal gift resulting from making those gifts.

For more, IRS Publication 950 outlines the rules about gift and estate taxes.

What do you think about making down payment gifts to children? Have you done it? Would it have helped you?

Published: January 26, 2012

In his third State of the Union address, President Barack Obama called on Congress to expand refinancing opportunities to millions of Americans.

It was nice to finally hear a politician talking about solving our housing market woes — the bull's-eye in terms of economic recovery.

Aiming to strike a populist chord with voters, President Barack Obama asked Congress Tuesday night during the State of the Union address to pass a mass refinancing effort that would help home owners take advantage of today’s lower mortgage rates.

“I’m sending this Congress a plan that gives every responsible home owner the chance to save about $3,000 a year on their mortgage by refinancing at historically low rates,” the president said. “No more red tape. No more runaround from the banks."

The proposal is an extension of the administration’s Home Affordable Refinance Program, which made it easier for home owners with loans owned or backed by Freddie Mac and Fannie Mae to refinance at record low interest rates. The proposal would broaden refinancing opportunities to home owners whose loans aren’t backed by the federal government.

To pay for the plan, Obama said that a small fee on the nation’s financial institutions would be implemented to ensure that the plan is deficit neutral.

Although Obama’s words were music to the ears of many home owners (especially since politicians on both sides of the aisle have been relatively mute on housing issues) — more needs to be done to help underwater home owners modify their loans and encourage banks to streamline the lending process. In the weeks ahead, Obama needs to leverage his refinancing proposal by emphasizing it on the campaign trail and letting every home owner know how easier rules and lower interest rates will help them.

Housing is a key driver of the economy. The NATIONAL ASSOCIATION OF REALTORS® estimates that for every two homes sold, one job is created. Plus, housing accounts for more than 15% of the U.S. gross domestic product. In past recessions, a rebound in housing has usually been one of the first signs that economic conditions are improving.

Besides stepping up refinancing efforts with banks, the president outlined the creation of a new mortgage fraud unit to investigate misconduct by lenders. “This new unit will hold accountable those who broke the law, speed assistance to home owners, and help turn the page on an era of recklessness that hurt so many Americans,” Obama said.

As we get closer to Election Day, the need for comprehensive housing solutions must not become just populist rhetoric in a speech. Effective housing policy is too important to too many Americans to be lost in election year jockeying.

In fact, housing and mortgage issues are make-or-break election issues for many voters and perilous territory for politicians. In a recent survey of voters, 60% believe dealing with mortgage and foreclosure issues is key to stabilizing the economy, including 57% of Republicans and 66% of Democrats.

The clearest way for Obama and his Republican opposition to prove to the American people that they’re fighting for the interests of their fellow Americans is to help home owners by making housing a priority. 

What did you think of the comments President Obama made about housing issues and mortgage lending?

Published: January 18, 2012

Tax rules that let you escape paying federal income tax after a short sale expire this year.

If you can’t afford your mortgage and know you’re going to eventually have to sell your home via short sale, you might want to get going on that sooner rather than later.

If you complete your short sale in 2012, you won’t owe federal taxes on the transaction. If you wait until 2013, you could owe a hefty federal tax.

In a short sale, the lender lets you sell your house for less than what you owe on the mortgage.

For example:

• You have $200,000 left on your mortgage.

• You can sell your house for $150,000.

• Your lender agrees to let you sell the house and takes $150,000 instead of the $200,000 you owe.

• Your lender forgives the $50,000 difference between the $200,000 you owe and the $150,000 you sold your house for.

If you did the short sale in this example this year, you wouldn’t owe taxes on the $50,000 the lender forgave. That’s because in 2007 and again in 2008, Congress told the IRS to stop collecting taxes on forgiven debt until 2013.

Before the 2007 law passed, you had to pay federal income tax on forgiven debt. If your lender forgave $50,000, the IRS said that $50,000 was income. If you were in a 28% tax bracket you’d owe $14,000 (.28 x $50,000) in federal income taxes.

Here we are 12 months away from the deadline, and it’s anybody’s guess whether Congress will renew that no-taxes-on-forgiven-debt rule. It’s just one of literally trillions of dollars of tax benefits expiring at the end of this year, and there’s no signal yet as to what, if anything, Congress will do about any of them.

And if that’s not confusing enough, states have their own tax laws on debt forgiveness that you have to consider, too.

Silver tax lining for 2013?

If you end up having to short sale in 2013, you may be able to escape taxes another way. If what you owe all your creditors exceeds the value of everything you own, you may not owe tax. Read about the insolvency rule in Publication 4681. (Note: The IRS includes all your assets in determining if you’re insolvent before the short sale.)

Despite its name, a short sale often takes a long time to complete. To ensure you have short sale success before the tax rule changes, work with a real estate agent who has done short sales, promptly give your lender any paperwork it asks for, and pray for patience. You’ll need it.

Did you buy or sell in a short sale? How long did your transaction take?

NEW YORK (CNNMoney) -- Foreclosure filings and repossessions fell to their lowest level since 2007 last year.

Total filings, including default notices and bank repossessions were down 33% for the year to 2.7 million, according to RealtyTrac, the online marketer of foreclosed properties.

One in every 69 homes had at least one foreclosure filing during the year, while 804,000 homes were repossessed. That's a significant improvement from the peaks reached in 2010 -- when 1.05 million homes were repossessed -- and the lowest levels seen since 2007.

More than 4 million homes have been lost to foreclosure over the past five years.

While the declines seem like good news for the housing market, where a flood of foreclosed homes has depressed home prices, much of it is due to processing delays caused by fall-out from the "robo-signing" scandal that broke in late 2010.

During the year, banks spent more time making sure paperwork was legal and proper, creating a backlog in the foreclosure pipeline. As a result, the average time it took to process a foreclosure climbed to 348 days during the fourth quarter, up from 305 days a year earlier.

"Foreclosures were in full delay mode in 2011, resulting in a dramatic drop in foreclosure activity for the year," said Brandon Moore, chief executive officer of RealtyTrac.

However, Moore said there were "strong signs" during the second half of the year that lenders are working through foreclosure backlogs in certain markets. He expects foreclosure activity to rise above 2011's level but remain below the peak hit in 2010.

Low rates offer some help for homeowners

Early in 2011, many forecasters were predicting a wave of foreclosures due to resetting adjustable-rate mortgages, but low mortgage rates helped many borrowers refinance into more affordable loans, said Moore.

The government helped as well, through efforts like the Home Affordable Refinance Program (HARP), which made refinancing easier for borrowers who owe more on their mortgage than their homes are worth.

Government foreclosure prevention programs, including HARP and the Home Affordable Modification Program (HAMP), have started about 5.5 million mortgage modifications since April 2009, according to the U.S. Department of Housing and Urban Development.

"Programs like HAMP and HARP have definitely made a dent in the foreclosure problem," said Moore "However, they are certainly not living up to their billing of preventing several million foreclosures. In addition, many [HAMP] homeowners fall back into foreclosure later on."

Of course, there were still plenty of factors working against homeowners in 2011, including the continued erosion in home prices. Falling prices rob homeowners of home equity, which they can tap if they need emergency cash.

Foreclosure hot spots

Hot spots for foreclosures remain mostly in "bubble states," where speculative investors helped drive up home prices beyond their fundamental values during the mid-2000s housing boom.

Nevada, where one out of every 16 households received some kind of default notice during the year, was the worst hit of all, a distinction it has held for the fifth consecutive year.

Foreclosure free ride: 3 years, no payments

Arizona had the second highest foreclosure rate and California came in third. Florida, which had been running neck-and-neck with the other "Sand States" in past years, fell to seventh, behind Georgia, Utah and Michigan.

Among metro areas, Las Vegas suffered from the highest foreclosure rate in 2011. California put seven cities in the top 10, led by Stockton in the second slot. Other cities in the top 10 included Phoenix, which finished sixth, and Reno, Nev. was eighth.

Solar Christmas lights don’t cost anything to operate, but the high purchase price might not add up to savings.

• The average cost for a 100-light string of miniature solar-powered LED lights is about $0.30 per bulb, or about $30 per string.

• The average cost for a 100-light string of miniature plug-in LED lights is $0.08 per bulb, or about $8 per string.

Compare costs to operate:

• Operating a string of plug-in LED Christmas lights for 300 hours — more than enough hours for an entire holiday season — costs about $0.30, using an average energy cost of $0.11 per kilowatt hour.

• Solar-powered Christmas lights, of course, don’t cost anything to operate. That means you’re saving 30 cents per year in energy costs.

Do the math, and you’ll see that it’ll take about 45 years for the energy savings from solar-power to equal the difference in purchase price between a plug-in string and a solar-powered string.

• no extension cords

• no need for exterior electrical outlets

• withstand cold temperatures and precipitation

• zero cost to operate

• light output comparable to plug-in lighting

• a green option

Disadvantages

• higher initial cost to purchase

• may not operate under cloudy skies

• unproven longevity (too new on the market for results)

Source: Macon Telegraph, 11/27/2011

If you were given a chance to design a dream home, what features would you choose first? Take a look at the most popular wish list in 2011 from Nudura, a leading firm in building technology:

• Curb appeal. Home exterior, driveway, and landscaping must attract admiring attention.
• Concrete and natural stone, rather than wood framing and brick. These homes (Nudura.com) are not only beautiful, they are stronger, more sound resistant, and far more energy efficient than wood frames and brick.
• Maximum energy efficient throughout from top to bottom.
• Solar panels in the roof to generate a personal energy source.
• A large, designer kitchen with natural stone countertops and futuristic appliances, cabinetry and waterworks.
• Natural hardwood flooring like Brazilian cherry and sustainable bamboo.
• A sunroom, a front porch, and a backyard finished patio.
• Vessel sinks, or free-standing bowls above the bathroom countertop, accompanied by wall-mounted faucets.
• Bedroom walk out or balcony.
• Designer bathtubs and walk0in shower with marble tile, a seating bench and rainfall showerhead.

At Jon's Custom Homes, we include these ameneties into our homes. We pride ourselves with building energy efficient homes that exceed the GA Energy Efficient Code. Visit us online at Jons Custom Homes or call us about our energy compliant homes.

Published: November 4, 2011

In this week’s top news, the president and the Federal Reserve go on the offensive to help the housing market, but do their plans have what it takes to get the job done?

Last week, President Obama announced an executive order to help home owners refinance their mortgages, and now the Federal Reserve is considering measures to reduce borrowing costs. Is housing finally getting the attention it deserves? Read the top housing news, including more on the bipartisan housing commission and how foreign home buyers could help our economy, in this week’s Friday Five.

Huffington Post: Housing is Back on the National Agenda

Last week, President Obama and Ed DeMarco, the overseer of Fannie Mae and Freddie Mac, announced their intention to remove barriers that have kept working home owners from refinancing home loans into low-interest rates. Huffington Post blogger Janis Bowdler thinks this looks promising for Latino families and home owners.

Bloomberg Businessweek: Bernanke Housing Rebound May Hinge on Access to Refinancing

Federal Reserve Chairman Ben S. Bernanke can’t go it alone when it comes to reviving the U.S. housing market. Federal policymakers are considering buying mortgage-backed securities to push down borrowing costs and help home owners refinance their debt.

U.S. News & World Report: Can Foreign Buyers Save the U.S. Housing Market?

Ultra-low and declining home prices are a headache for home owners, but they might also be the key to healing the housing market as foreign investors snap up real estate bargains in the United States.

HouseLogic: Housing Commission: A Sign Policymakers Finally Get Home Ownership?

Reaching consensus in Washington is more difficult today than ever before, but the housing crisis is too big of an economic burden for a new bipartisan commission to get bogged down in politics.

NPR: Official: No 'Silver Bullet' to Solve Housing Crisis

The White House says it will help millions of people hold onto their homes through a government-backed modification program. But critics are skeptical the plan will be a success, in part because of the dependence on the goodwill of banks to voluntarily join up. Raphael Bostic, the assistant secretary for Policy Development and Research at the U.S. Department of Housing and Urban Development, tells NPR that he doesn't think there is a "silver bullet" for solving the housing crisis.

Published: November 2, 2011

Reaching consensus in Washington is more difficult today than ever before, but the housing crisis is too big of an economic burden for a new bipartisan commission to get bogged down in politics.

A D.C. think tank, the Bipartisan Policy Center, last week launched a housing commission tasked with finding long-term solutions to help the housing market and address issues affecting home owners. Chaired by former Sens. George Mitchell (D-Maine) and Kit Bond (R-Mo.), and previous HUD Secretaries Henry Cisneros and Mel Martinez, the commission will have to produce recommendations that not only cure the ailing housing market but also pass the Congressional gauntlet.

For several decades now, the housing industry has been the victim of well-intentioned but misguided policies. A commission that will set aside partisan differences and focus on issues like increasing Federal Housing Administration loan limits, making sure flood insurance is available, and maintaining the mortgage interest deduction is needed now more than ever. It’s going to take the best ideas — on both sides of the aisle — to get Americans back in their homes. 

At a recent press conference, each of the commission’s co-chairs said the housing market is inextricably linked to the economic recovery. "Housing isn’t only a basic human need," Mitchell said. "It’s also a critical element of our economy, and now, more than ever, is the time for a fresh look at this issue."

Bond said there’s no question that the American housing system is broken. “We aren’t going to come out with a Band-Aid within just a couple of months because, as what’s been described (as) one Band-Aid here may cause a wound to open up over there,” Bond added.

Martinez went as far as to describe the housing crisis as a “human crisis.” His remarks aren’t hyperbole. The negative impact that a weak housing market has on employment contributes to societal as well as economic troubles. How are children supposed to focus on school when their parents are out of work and worried about losing their house because they can’t meet their mortgage payments?

Unfortunately, the commission isn’t slated to release its findings until the first quarter of 2013, making home owners wonder if its work will be too little too late. However, Bond said it’s unlikely for Congress to act before then. “If the Senate is still anything like it was before I left, the chances of them getting anything done on housing in 2012 are somewhere between slim and none,” Bond said.

Despite this delay, it’s reassuring to finally see policymakers recognizing the importance of a full housing recovery. Along with the executive order issued by President Obama last week that introduces new rules for federally guaranteed mortgages, enabling home owners with little or no equity in their homes to refinance and avoid foreclosure, it looks as if we’re making some headway.

Do you think the new housing commission will be able to come to a consensus and find long-term policy solutions that Congress will adopt, or is it too little too late?

If you’re facing foreclosure, don’t panic: Take steps right now to save your home or at least lessen the blow of its loss.

Published: January 15, 2010

With foreclosure rescue scams widespread as more homeowners fall behind on mortgage payments, be smart if you seek help

Foreclosure rescue scams run rampant

Homeowners facing foreclosure are prime targets for scam artists. The U.S. Federal Trade Commission identified 71 companies running suspicious foreclosure rescue ads, and the Better Business Bureau counts foreclosure rescue rip-offs among its top 10 scams. Understanding how these scams work can help you avoid becoming a victim.

The variations are seemingly endless, but one popular foreclosure scam involves a representative of a so-called foreclosure rescue company promising to negotiate a deal with your lender. The rep, vowing to take care of everything, will instruct you not to contact your lender, lawyer, or credit counselor during the supposed negotiations. The more brazen ones will even tell you to pay your mortgage directly to them.

Once you pay an upfront fee or hand over a few months' worth of mortgage payments, the scam artist will disappear. You'll be left with an emptier wallet and a mortgage that's in even deeper trouble because no deal was cut and no payments were made on your behalf. According to John Riggins, chief executive of the Fort Worth, Texas, office of the Better Business Bureau, upfront fees can range from $500 to $5,000.

Rip-offs come in many forms

A bankruptcy foreclosure scam can involve a promise to fend off foreclosure in exchange for an upfront fee. Instead of getting you legitimate relief, the fraudster will pocket the fee and secretly file a bankruptcy case in your name. The scam may seem to work initially, because a bankruptcy filing will stop foreclosure proceedings temporarily, but they'll resume. Compounding your problems, a bankruptcy can mar your credit report for 10 years.

Another common scam, called the bait-and-switch, results in a scam artist taking ownership of your home. You sign documents supposedly for a new loan that will make your mortgage current. What's really happening is you're signing over the deed of your house. In this scenario you would still owe on your mortgage but no longer own the home.

In a rent-to-own scheme, you're told to surrender a home's deed as part of a deal that lets you stay put as a renter. The scam artist, perhaps claiming to be able to refinance at a better rate with you off the title, promises to sell the house back to you in the future. However, terms of the deal may make it all but impossible for you to repurchase the home, or the scammer may get you evicted by raising the rent beyond your means. Either way, you end up losing the home while remaining on the hook for the unpaid mortgage.

Look out for red flags

Being aware of the warnings signs can protect you from foreclosure rescue scams. Red flags include:

• Demands for high upfront fees.
• Guarantees to stop a foreclosure.
• Instructions to make mortgage payments to someone other than your lender.
• Pressure to sign over a deed.

Legitimate foreclosure counselors won't put on a full-court press, nor will they guarantee that you won't lose your home to foreclosure. What they will do is review your financial situation and offer up options. Foreclosure counselors approved by the U.S. Department of Housing and Urban Development won't charge you a fee either.

Legitimate ways to get foreclosure help

There are a number of legitimate ways to contend with foreclosure. If you've missed mortgage payments, start by getting in touch with your lender. Ask to speak with someone in the Loss Mitigation Department and explain your situation.

Your lender may be able to arrange a repayment plan, called a special forbearance, based on your current economic circumstances. The lender could even give you a temporary reduction in your monthly payment or suspend payments for a period of time.

With a principal forbearance, the lender will reduce the amount of your mortgage, thus reducing your monthly payments. However, the amount of the principal reduction doesn't disappear. Rather, it's tacked on to the end of the loan, effectively creating a balloon payment.

A federally facilitated mortgage modification could also help. The Making Home Affordable modification program pays lenders to re-work loan terms and lower monthly payments. Be prepared to gather lots of paperwork and undergo a trial modification.

If all else fails, you may need to give up your home. If so, look into the federal Home Affordable Foreclosure Alternatives program. HAFA offers lenders financial incentives to opt for a short sale or deed-in-lieu rather than a foreclosure. In a short sale, a lender agrees for a home to be sold for less than the outstanding mortgage, and then considers the debt paid off. In a deed-in-lieu, a homeowner turns over the home to the lender, and the mortgage is closed.

Published: March 19, 2010

Have to sell your home for less than it’s worth? Our seven tips will help you get the best price.

Know who you owe

A short sale has to be approved by any company that has a mortgage or lien against your home. That includes your first, second, or even third mortgage lender, your home equity line lender; your homeowners or condominium association; and any contractors who’ve placed a lien on your home. Make a list and start talking to everyone early in the process. Ask what documents they’ll need from you.

Pick your short sale team

You’ll need to work with a team of short sale experts, including a real estate agent, real estate attorney, and your accountant. Look for agents and attorneys who advertise themselves as short sale experts. Interview at least three, and listen carefully for signs that they understand the complexities of the short sale process.

Agents should explain how they’ll arrive at a suggested price for your home. Ask them to show you a sample short-sale package or for an example of a prior short-sale success.

Get your documents ready

Gather the paperwork your creditors and mortgage lenders asked to see, like your listing agreement and a hardship letter explaining why you need to do a short sale. You’ll also need proof of what you earn and what you owe as well as copies of your federal income tax returns for the past two years.

Expect delays

Despite a federal rule saying banks participating in the federal government’s Making Home Affordable loan modification program must respond to short-sale offers within 10 days, it may take weeks or months for your lender to decide whether to allow you to sell your home in a short sale--and even longer if you must negotiate with more than one lender or lienholder.

Your lender and lienholders don’t have to agree to your proposed short sale. They can reject your terms or make a counteroffer, which can create further delays.

Anticipate demands

Discuss with your short-sale team how you should respond to common short-sale demands from lenders. For example, are you willing to sign a promissory note agreeing to pay outstanding amounts after the sale is complete?

Know the tax implications

Any unpaid amount of your mortgage “forgiven” by your lender through a short sale may be considered income to you under federal tax rules. Ask your attorney or accountant whether you qualify to exclude that amount as income on your tax returns under the Mortgage Forgiveness Debt Relief Act and Debt Cancellation Act. Also ask if you’ll be required to report amounts “forgiven” by other lienholders, if applicable.

Consider how the short sale will affect your credit and what you must pay

Ask whether your lender will report the short sale to credit-reporting agencies. Having a portion of your debt forgiven may negatively affect your credit score, but a short sale typically damages your score less than a foreclosure or bankruptcy.

Ask your lawyer whether you'll be responsible for paying back the lenders' loss. If the lender says it will forgive any losses on the sale of your home, get that promise in writing.

Let us give you a hint of something really fun to do.

Starting September 30th thru every weekend in October Perry Outreach is hosting  The Perry Haunted Barn. Located on an 1860 home site 2 miles north of Perry this haunted barn is full of monsters and creatures and zombies Oh My!

      Be A Part of Perry Volunteer Outreach Center by helping them donate 10,000 cans of food. If you bring a can you can get $1.00 off a regular priced ticket (max $1.00  discount per ticket). If you are military show your ID card and get $2.00 off your ticket price.  

Trinity United Methodist Church    
129 S. Houston Road     
Warner Robins, GA 31088    
923-3797

Happy Friday everyone! Jacque and Loretta

Man have we got a deal for you! Just got informed about a special promotion for the Georgia Theatre company. On Sunday all day you can buy a ticket for $12.00 and see your choice of any movie playing at either Hwy 96 or Galleria theatre . For $6.00 you can go to the Parkway cinema and see one of their movies. In addition to the movie you also get a box of popcorn

and a small soft drink

and that's not all you also get a packet of valuable coupons from local area restaurants. All proceeds from this day 100% benefits the United Way of Central Georgia the Houston County Meals on Wheels and the Boys and Girls Clubs of Central Georgia.  

So if you find yourself on Sunday with nothing to do stop by one of our 3 theaters and support a great cause.                        

Have a great weekend!

Teamworks

Panicky home owners fearing the light bulb police will take away their incandescents should chillax. Federal legislation doesn’t ban Edison’s bulb; it just requires that 100-watt incandescent bulbs become roughly 30% more energy efficient by January 2012; 75-watt bulbs in 2013, and 60- and 40-watt bulbs in 2014.

But your pulse should race at the number of light bulb choices currently on the market and the change in terminology on the horizon, says an article in today’s New York Times.

CFLs, LEDs, lumens, and watt equivalents — it’s enough to make you shut off the lights and take a nap.

Times reporter Bob Tedeschi grabbed armloads of different bulbs and tested them throughout his house, so you don’t have to. He likes GE Bright from the Start Energy Smart CFL for the kitchen; Philips EcoVantage and Sylvania SuperSaver for the dining room; and Philips AmbientLED for reading in the living room.

Tedeschi also provides some tips for the light bulb challenged — basically, all of us.

His top tip? Take it slow.

“Don’t shop all at once for every socket in the house,” Tedeschi says. “Lighting technology, particularly for LEDs, is improving rapidly, and prices are dropping steadily, so it makes more sense to replace bulbs as needed.”

What do you think about the new lightbulb standards? Will you ditch your old incandescent bulbs or hoard them?