Archive for November, 2009
North Carolina State Foreclosure Law
November 10th, 2009
alexander thomas asked:
Which law provision governs foreclosure in North Carolina?
You can find about this in North Carolina General Statutes, Chapter 45 (Mortgages and Deeds of Trust), Article 2, Article 2A as referenced in §45-4 to §45-21.38
What happens during Judicial Foreclosure in North Carolina?
It involves filing a law suite to obtain a court order. This is done when no power of sale is present in mortgage/deed. Once foreclosure is declared, property is auctioned off to highest bidder.
What happens during Non-Judicial Foreclosure in North Carolina?
Non-judicial foreclosure is conducted only when power of sale clause exists in deed of trust/mortgage. This clause allows borrower pre-authorizes the sale of property to pay off the balance loan in the incidence of their default. In such cases power is given to lender to sell the property by himself or his representative who generally referred as trustee. Guidelines for such procedure are mentioned under “Guidelines for power of sale foreclosure”.
Guidelines for power of sale foreclosure
If the deed of trust/mortgage contains a power of sale clause with specified time, place and terms of sale, then it should be followed. But in North Carolina, a preliminary hearing needs to be held before the power of foreclosure takes place.
The clerk of the county determines whether a foreclosure should take place or not, after the release of preliminary notices. If clerk issues foreclosure notice, the process is done as follows:
A notice should have the names of borrower, the lenders, description of the property, date/time/place of the sale. The notice should be mailed to the borrower 20 days before the sale by first class mail. It should be published in local newspaper for two consecutive weeks in local newspaper and second ad should appear 10 days before the sale. Also notice should be posted on court door, 20 days before the sale. The sale is conducted between 10 a.m. to 4 p.m. Upset bids may be filed with the court clerk for a period of ten (10) days after the foreclosure sale. Lenders can obtain deficiency judgments and the borrower gets right of redemption.
This is legal information; it should not be treated as legal advice.
Which law provision governs foreclosure in North Carolina?
You can find about this in North Carolina General Statutes, Chapter 45 (Mortgages and Deeds of Trust), Article 2, Article 2A as referenced in §45-4 to §45-21.38
What happens during Judicial Foreclosure in North Carolina?
It involves filing a law suite to obtain a court order. This is done when no power of sale is present in mortgage/deed. Once foreclosure is declared, property is auctioned off to highest bidder.
What happens during Non-Judicial Foreclosure in North Carolina?
Non-judicial foreclosure is conducted only when power of sale clause exists in deed of trust/mortgage. This clause allows borrower pre-authorizes the sale of property to pay off the balance loan in the incidence of their default. In such cases power is given to lender to sell the property by himself or his representative who generally referred as trustee. Guidelines for such procedure are mentioned under “Guidelines for power of sale foreclosure”.
Guidelines for power of sale foreclosure
If the deed of trust/mortgage contains a power of sale clause with specified time, place and terms of sale, then it should be followed. But in North Carolina, a preliminary hearing needs to be held before the power of foreclosure takes place.
The clerk of the county determines whether a foreclosure should take place or not, after the release of preliminary notices. If clerk issues foreclosure notice, the process is done as follows:
A notice should have the names of borrower, the lenders, description of the property, date/time/place of the sale. The notice should be mailed to the borrower 20 days before the sale by first class mail. It should be published in local newspaper for two consecutive weeks in local newspaper and second ad should appear 10 days before the sale. Also notice should be posted on court door, 20 days before the sale. The sale is conducted between 10 a.m. to 4 p.m. Upset bids may be filed with the court clerk for a period of ten (10) days after the foreclosure sale. Lenders can obtain deficiency judgments and the borrower gets right of redemption.
This is legal information; it should not be treated as legal advice.
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Have you checked your Property Portfolio will Deliver what YOU Want?
November 7th, 2009
Kate Faulkner asked:
Most people just decide ‘I’ve got a bit of cash’ and then ‘I’ll buy a property’. Next thing you know, you’ve got a ‘bit more cash’ so you ‘buy another property’. Then you’ll say, ‘I’ve put my money into property for my pension’ or ‘I’m leaving the kids a property portfolio’.
If this is you, let me ask you a question – have you actually worked out what your portfolio is worth and whether it will deliver what you want eg a pension? Or what tax your kids will pay to inherit the portfolio you’ve left them? Have you ever checked with an Independent Financial Advisor or Wealth Manager whether your portfolio can be protected or will deliver to you in your retirement?
If not, then now is the time to do so – don’t leave it for a few years, you never know what will happen. Sorry to be ‘doom and gloom’ but things happen that are out of their control, people get sick, lose their job and then lose their home or homes in the case of property investors. It’s happening to people now and now is your chance to make sure it doesn’t happen to you!
Top Five Tips to Ensure your Property Portfolio Delivers what YOU Want!
1. Be clear about what you want from your portfolio. Is capital growth more important than income or vice versa? Are you maximising your property ‘box’?
2. Are you fed up with looking after tenants or managing a build or renovation? Then see if you can employ someone to do it for you. Want help finding someone to manage your property project, then contact us.
3. What level of risk are you willing to take? Property is typically a ‘medium’ financial risk, you may want to take more risk the younger you are and less the older you are.
4. What’s the value of your whole estate? For example, how much are you worth if you died today (sorry, not trying to depress you, but this is important if you have a family!).
5. Track how well your property portfolio is doing versus other investments. For example, general share indices grew by 50% in the last 12 months while property fell by nearly 10%.
Top Five Things that will STOP your Property Portfolio Delivering what YOU Want
Property won’t always deliver what you want. Take people that have invested since the peak in 2007 (and since 2006). Typically property values have fallen, they are struggling to re-mortgage their portfolio and are stuck on high interest rates. These high rates mean that rental income isn’t necessarily covering the costs of owning and running the property so their portfolio is running at a loss.
If you don’t want your property portfolio to fail, then make sure you run a ‘portfolio health check’ to ensure yours is successful!
What would happen if………
1. Personal taxation increased? At the moment you are taxed at either 20%; 40% or 50% of your income (and 50% is a new tax rate). What if taxes went up to 25%; 45% or 60% – would you still make any money?
2. Property taxes. Currently capital gains tax is just a flat rate of 18%, what if the government brought back the 40% tax rate for all capital growth on a second home, what would this do to your portfolio when you come to sell?
3. Inflation. Over the last 10 years, rents have only really grown by around 10% (on average), while inflation has ranged between 1.5% per year and 4% per year. In other words it’s hardly kept up with costs at all. What effect will inflation increases have on the value of YOUR rental income in the future?
4. Property Price fluctuations. We’ve all seen property values (in the main) fall from 20% of the 2007 peak. How much further do they need to fall for the value of your property to be negative (ie less than your mortgage), or falling less than the 25% equity you typically need to have in the property to re-mortgage.
5. What Costs might go up? What’s your rental income versus costs break even? If mortgage costs go up by 10% or 20% will you still secure net income from your property or have to put money in? What about insurance costs, if they grow by 30% this year, will this push your property into a loss making situation?
Work out what your top five costs are and what increases you would need to see before you start losing money.
Most people just decide ‘I’ve got a bit of cash’ and then ‘I’ll buy a property’. Next thing you know, you’ve got a ‘bit more cash’ so you ‘buy another property’. Then you’ll say, ‘I’ve put my money into property for my pension’ or ‘I’m leaving the kids a property portfolio’.
If this is you, let me ask you a question – have you actually worked out what your portfolio is worth and whether it will deliver what you want eg a pension? Or what tax your kids will pay to inherit the portfolio you’ve left them? Have you ever checked with an Independent Financial Advisor or Wealth Manager whether your portfolio can be protected or will deliver to you in your retirement?
If not, then now is the time to do so – don’t leave it for a few years, you never know what will happen. Sorry to be ‘doom and gloom’ but things happen that are out of their control, people get sick, lose their job and then lose their home or homes in the case of property investors. It’s happening to people now and now is your chance to make sure it doesn’t happen to you!
Top Five Tips to Ensure your Property Portfolio Delivers what YOU Want!
1. Be clear about what you want from your portfolio. Is capital growth more important than income or vice versa? Are you maximising your property ‘box’?
2. Are you fed up with looking after tenants or managing a build or renovation? Then see if you can employ someone to do it for you. Want help finding someone to manage your property project, then contact us.
3. What level of risk are you willing to take? Property is typically a ‘medium’ financial risk, you may want to take more risk the younger you are and less the older you are.
4. What’s the value of your whole estate? For example, how much are you worth if you died today (sorry, not trying to depress you, but this is important if you have a family!).
5. Track how well your property portfolio is doing versus other investments. For example, general share indices grew by 50% in the last 12 months while property fell by nearly 10%.
Top Five Things that will STOP your Property Portfolio Delivering what YOU Want
Property won’t always deliver what you want. Take people that have invested since the peak in 2007 (and since 2006). Typically property values have fallen, they are struggling to re-mortgage their portfolio and are stuck on high interest rates. These high rates mean that rental income isn’t necessarily covering the costs of owning and running the property so their portfolio is running at a loss.
If you don’t want your property portfolio to fail, then make sure you run a ‘portfolio health check’ to ensure yours is successful!
What would happen if………
1. Personal taxation increased? At the moment you are taxed at either 20%; 40% or 50% of your income (and 50% is a new tax rate). What if taxes went up to 25%; 45% or 60% – would you still make any money?
2. Property taxes. Currently capital gains tax is just a flat rate of 18%, what if the government brought back the 40% tax rate for all capital growth on a second home, what would this do to your portfolio when you come to sell?
3. Inflation. Over the last 10 years, rents have only really grown by around 10% (on average), while inflation has ranged between 1.5% per year and 4% per year. In other words it’s hardly kept up with costs at all. What effect will inflation increases have on the value of YOUR rental income in the future?
4. Property Price fluctuations. We’ve all seen property values (in the main) fall from 20% of the 2007 peak. How much further do they need to fall for the value of your property to be negative (ie less than your mortgage), or falling less than the 25% equity you typically need to have in the property to re-mortgage.
5. What Costs might go up? What’s your rental income versus costs break even? If mortgage costs go up by 10% or 20% will you still secure net income from your property or have to put money in? What about insurance costs, if they grow by 30% this year, will this push your property into a loss making situation?
Work out what your top five costs are and what increases you would need to see before you start losing money.
1031 Exchanges – Good for Investors, Good for the Country
November 7th, 2009
Ajay Albertson asked:
A 1031 exchange is a tactic used by real estate investors to indefinitely defer tax liability on a property’s sale. This is achieved by giving the rights to a property one would like to sell to an intermediary, who holds on to the funds gained from the sale of the relinquished property and uses them to buy a replacement property that complies with the rules set out in Section 1031 .
While the present popularity of the 1031 could lead you to believe that it only recently came on the scene, this is untrue. Actually, the history of the 1031 extends all the way back to 1921, although at its conception, it was quite a bit different than what we today think of as an exchange. Section 1031 really came into its own in the 1970s, which saw a host of significant modifications in the manner that exchanges were regulated. These modifications paved the way to a farther-reaching conception of the process and also generated greater interest among property investors.
The indefinite capital gains deferral an exchange grants to the taxpayer may, at first, seem to be a sort of gift from the US government, however it is, in reality, closer to an interest-free loan, because there is an expectation that the investor will “repay” the extra funds gained from the deferral by paying capital gains taxes upon the eventual sale of a replacement property. In addition, this interest free loan may be kept indefinitely; an investor can choose to conduct any number of exchanges before ultimately deciding to sell outright, at which point capital gains taxes must be paid.
The 1031 exists as a mutually advantageous agreement between investors and the U.S. government, providing a benefit for the U.S. economy as well as the individual taxpayer. By viewing the transfer of value in an exchange as representing a continuation of a preexisting investment rather than as a separate transaction liable for taxation, taxpayers are given the opportunity to move their funds to the most profitable possible investments, which, in turn, boosts the economy by bolstering job growth.
Like anything else, the 1031 exchange has its detractors. Some advocates of change in Section 1031 will argue that the tax free profit gained by to the taxpayer in a 1031 lends them an unreasonable advantage. Another frequent concern is that the strict time limits attached to some aspects of the exchange procedure may engender a frantic rate of buying, resulting in an increase in the cost of replacement properties. These complaints, however, are only loosely based in reality, and the odds that the 1031 exchange procedure will see noteworthy changes in the near future are quite slim. In general, most will agree that Section 1031 is greatly helpful to all parties involved, allowing taxpayers increased profits on the sale of property while also encouraging job growth and consequently promoting the greater good of the country as a whole. There is little doubt that the 1031 will be a mainstay of the property investment business for years to come.
A 1031 exchange is a tactic used by real estate investors to indefinitely defer tax liability on a property’s sale. This is achieved by giving the rights to a property one would like to sell to an intermediary, who holds on to the funds gained from the sale of the relinquished property and uses them to buy a replacement property that complies with the rules set out in Section 1031 .
While the present popularity of the 1031 could lead you to believe that it only recently came on the scene, this is untrue. Actually, the history of the 1031 extends all the way back to 1921, although at its conception, it was quite a bit different than what we today think of as an exchange. Section 1031 really came into its own in the 1970s, which saw a host of significant modifications in the manner that exchanges were regulated. These modifications paved the way to a farther-reaching conception of the process and also generated greater interest among property investors.
The indefinite capital gains deferral an exchange grants to the taxpayer may, at first, seem to be a sort of gift from the US government, however it is, in reality, closer to an interest-free loan, because there is an expectation that the investor will “repay” the extra funds gained from the deferral by paying capital gains taxes upon the eventual sale of a replacement property. In addition, this interest free loan may be kept indefinitely; an investor can choose to conduct any number of exchanges before ultimately deciding to sell outright, at which point capital gains taxes must be paid.
The 1031 exists as a mutually advantageous agreement between investors and the U.S. government, providing a benefit for the U.S. economy as well as the individual taxpayer. By viewing the transfer of value in an exchange as representing a continuation of a preexisting investment rather than as a separate transaction liable for taxation, taxpayers are given the opportunity to move their funds to the most profitable possible investments, which, in turn, boosts the economy by bolstering job growth.
Like anything else, the 1031 exchange has its detractors. Some advocates of change in Section 1031 will argue that the tax free profit gained by to the taxpayer in a 1031 lends them an unreasonable advantage. Another frequent concern is that the strict time limits attached to some aspects of the exchange procedure may engender a frantic rate of buying, resulting in an increase in the cost of replacement properties. These complaints, however, are only loosely based in reality, and the odds that the 1031 exchange procedure will see noteworthy changes in the near future are quite slim. In general, most will agree that Section 1031 is greatly helpful to all parties involved, allowing taxpayers increased profits on the sale of property while also encouraging job growth and consequently promoting the greater good of the country as a whole. There is little doubt that the 1031 will be a mainstay of the property investment business for years to come.
Secrets of Real Estate Hardship Letters Revealed!
November 5th, 2009
Todd Temaat asked:
Real estate hardships have become familiar to many people in the last couple years. A combination of factors across our economy has collided to make this an especially rough financial time for many families.
For example, the “bubble” in the country’s housing market finally burst and left many homeowners owing more on their home than they can sell it for. Many of these same homeowners took out adjustable rate and/or interest only mortgages that had low payments for the first 3 or 5 years. They were often told they’d be able to refinance into a fixed rate mortgage before their current loan reset and its initial “teaser” rate expired.
Unfortunately, this has not been possible for many.
If you know these four secrets of writing a real estate hardship letter, though, you will be able to take control of your situation and survive foreclosure on your terms.
Secret One – Are You Qualified?
The first secret of writing your real estate hardship letter is understanding what lenders consider a “qualified” hardship. The big secret is that there are only two qualified hardships!
1. A sudden, unavoidable loss of income
2. A sudden, unavoidable increase in expenses
Secret Two – Your Secret Weapon
The attitude you choose to take when dealing with your lender is critical to your success. They will appreciate a can-do, positive attitude more than you can possibly imagine. They typically deal with negative, angry people all day long. Remember that loss mitigators are not mean people trying to steal your home and security from you. They are simply people doing their job. Just being friendly, polite, and considerate will usually get you treated the same way in return.
Secret Three – Stay On The Straight and Narrow
Your hardship letter is not the place for you to describe all the bad experiences you’ve had with your lender’s collection agents.
It’s not the place to describe every little detail of why you lost your job or how bad your boss treated you either.
Your goal is to present yourself as a rational, reliable person that got behind on their mortgage and is now ready to make it right.
Stay focused. Don’t try to win sympathy… because you won’t. Just tell your story plainly and move on to the rest of the letter.
Secret Four – You Are In Control
The most important ingredient to your success in saving your home is your Action Mindset. If you clearly envision your future, you can overcome all of the bumps in front of you. The toughest times in your life are also the most rewarding ones once you’ve made it through them. If you have an Action Mindset, you will overcome these difficulties and become a wiser, stronger person. You can take control of your situation if you simply take action on what you learn and take it one step at a time.
Real estate hardships have become familiar to many people in the last couple years. A combination of factors across our economy has collided to make this an especially rough financial time for many families.
For example, the “bubble” in the country’s housing market finally burst and left many homeowners owing more on their home than they can sell it for. Many of these same homeowners took out adjustable rate and/or interest only mortgages that had low payments for the first 3 or 5 years. They were often told they’d be able to refinance into a fixed rate mortgage before their current loan reset and its initial “teaser” rate expired.
Unfortunately, this has not been possible for many.
If you know these four secrets of writing a real estate hardship letter, though, you will be able to take control of your situation and survive foreclosure on your terms.
Secret One – Are You Qualified?
The first secret of writing your real estate hardship letter is understanding what lenders consider a “qualified” hardship. The big secret is that there are only two qualified hardships!
1. A sudden, unavoidable loss of income
2. A sudden, unavoidable increase in expenses
Secret Two – Your Secret Weapon
The attitude you choose to take when dealing with your lender is critical to your success. They will appreciate a can-do, positive attitude more than you can possibly imagine. They typically deal with negative, angry people all day long. Remember that loss mitigators are not mean people trying to steal your home and security from you. They are simply people doing their job. Just being friendly, polite, and considerate will usually get you treated the same way in return.
Secret Three – Stay On The Straight and Narrow
Your hardship letter is not the place for you to describe all the bad experiences you’ve had with your lender’s collection agents.
It’s not the place to describe every little detail of why you lost your job or how bad your boss treated you either.
Your goal is to present yourself as a rational, reliable person that got behind on their mortgage and is now ready to make it right.
Stay focused. Don’t try to win sympathy… because you won’t. Just tell your story plainly and move on to the rest of the letter.
Secret Four – You Are In Control
The most important ingredient to your success in saving your home is your Action Mindset. If you clearly envision your future, you can overcome all of the bumps in front of you. The toughest times in your life are also the most rewarding ones once you’ve made it through them. If you have an Action Mindset, you will overcome these difficulties and become a wiser, stronger person. You can take control of your situation if you simply take action on what you learn and take it one step at a time.
Real Estate In a Tough Market
November 2nd, 2009
Eli Keller asked:
Are you a first time house purchaser in the market to purchase the home of your dreams? You may not be advised that there are lots of benefits in home purchasing as a first time buyer. The govt has been working together with first time house buyers, to help them economize and purchase something at a reasonable price, by giving them grants to be used toward the purchase of their first home.
A tax credit of at least $8000.00 is granted to first time buyers.
Keep in mind, if you are married, and your significant other has in truth made owned a home in the last three years, neither of you will qualify for the credit. If an unmarried couple wants to exploit the tax credit, and one of them owned a home in the last 3 years, the person that has not owned will still qualify, the tax subsidy will then be moved to the qualifying party.
The tax credit is predicated on 10 percent of the purchase price, but won’t exceed $8000.00.
Qualifying for this benefit is also based on your earnings. tax return form 5405, this will identify your tax subsidy amount, which you’ll then want to claim on your 1040 tax form, line 67. If you have filed your 2008 return prior to your purchase, you will change the tax return if you don’t need to wait until the 2009 tax season. This is something you would want to ask your tax professional about before making a decision. Also, the home that you get, have to be used for your principle residence for a minimum of 3-years, or the IRS may try and take the $8000.00 credit back from you. Vacation houses do not count as a principle place of residence.
Again, something you would desire to talk to your tax professional about. Time is running out for this great opportunity, so seek out the proper recommendation and make the choice that is good for you.
So, you’ve just bought a house? Congratulations! In many areas of the western world, the ownership of property is a sure indication that you have arrived onto the ladder of monetary success. So it is certainly good news that you have acquired a place. With the economic times as they’re currently though, it is surely a vital thing for you to step back for an instant and take a look at things as they are right now.
If you purchased the house before the worst of the economic typhoon hit, you definitely need to check the finances in order to make sure that you bought a home that you can afford. You do not want to end up out of money and completely broke because of the payments on the house, so this is definitely something that you wish to check out.
if you’re terrified of the bank probably accelerating the interest rate to silly proportions, you need to pay close attention to the interest rate. Renegotiate it to a fixed IR and this is a difficulty that goes away. The downside is that you’re going to pretty much certainly pay more with a fixed interest rate than you would with a variable, but there isn’t any danger of your interest rate skyrocketing during particularly bad economic times.
now you have made the purchase, now may be the time to have one last look around the house to be certain that there are no Problems that you have not missed before buying the house. Ideally, you could have wanted to do that at least one or two times before agreeing to buy the house, but you must still do it now to make sure that you have one last chance to cast any nasty surprises before they announce themselves to you at some future point in time.
For more great information about real estate please visit Real Estate Agent Wildwood NJ
.
Are you a first time house purchaser in the market to purchase the home of your dreams? You may not be advised that there are lots of benefits in home purchasing as a first time buyer. The govt has been working together with first time house buyers, to help them economize and purchase something at a reasonable price, by giving them grants to be used toward the purchase of their first home.
A tax credit of at least $8000.00 is granted to first time buyers.
Keep in mind, if you are married, and your significant other has in truth made owned a home in the last three years, neither of you will qualify for the credit. If an unmarried couple wants to exploit the tax credit, and one of them owned a home in the last 3 years, the person that has not owned will still qualify, the tax subsidy will then be moved to the qualifying party.
The tax credit is predicated on 10 percent of the purchase price, but won’t exceed $8000.00.
Qualifying for this benefit is also based on your earnings. tax return form 5405, this will identify your tax subsidy amount, which you’ll then want to claim on your 1040 tax form, line 67. If you have filed your 2008 return prior to your purchase, you will change the tax return if you don’t need to wait until the 2009 tax season. This is something you would want to ask your tax professional about before making a decision. Also, the home that you get, have to be used for your principle residence for a minimum of 3-years, or the IRS may try and take the $8000.00 credit back from you. Vacation houses do not count as a principle place of residence.
Again, something you would desire to talk to your tax professional about. Time is running out for this great opportunity, so seek out the proper recommendation and make the choice that is good for you.
So, you’ve just bought a house? Congratulations! In many areas of the western world, the ownership of property is a sure indication that you have arrived onto the ladder of monetary success. So it is certainly good news that you have acquired a place. With the economic times as they’re currently though, it is surely a vital thing for you to step back for an instant and take a look at things as they are right now.
If you purchased the house before the worst of the economic typhoon hit, you definitely need to check the finances in order to make sure that you bought a home that you can afford. You do not want to end up out of money and completely broke because of the payments on the house, so this is definitely something that you wish to check out.
if you’re terrified of the bank probably accelerating the interest rate to silly proportions, you need to pay close attention to the interest rate. Renegotiate it to a fixed IR and this is a difficulty that goes away. The downside is that you’re going to pretty much certainly pay more with a fixed interest rate than you would with a variable, but there isn’t any danger of your interest rate skyrocketing during particularly bad economic times.
now you have made the purchase, now may be the time to have one last look around the house to be certain that there are no Problems that you have not missed before buying the house. Ideally, you could have wanted to do that at least one or two times before agreeing to buy the house, but you must still do it now to make sure that you have one last chance to cast any nasty surprises before they announce themselves to you at some future point in time.
For more great information about real estate please visit Real Estate Agent Wildwood NJ
.