The Phoenix Area Foreclosure Experts

Down Payment on House Gift |Tax Free Way from IRA

by Craig

Down Payment on House Gift |Tax Free Way from IRA

Looking for a way to get a down payment gift from a relative? Did you know your parents could take money from their IRA to give you a down payment gift -- and not face any tax penalties?

Many people are buying Phoenix foreclosures for owner occupied homes and using FHA financing because it allows the least amount of money down from the buyer. One of the nicest features about using FHA financing is that it allows gift funds to be given from a relative to the buyer.

So let’s say that you were buying a 100,000 home and you needed the required 3.5% or $3,500 dollars of down payment to qualify -- but you only have $1,000 in your bank account. A relative (and in some cases a non relative) can gift you the money with a statement stating that no repayment is required (called a gift letter) along with some other simple documentation. Then the gift funds can be counted as YOUR funds.

This might save you up to several months/years of saving money to make it to the $3,500 down-payment mark.

One thing many people don’t know is that the IRS allows a parent to pull money out of their IRA “WITHOUT” penalty or taxation in order to gift those funds to a family member’s home. Most people know you can take money out of your IRA for your own home. But many do not know that you can take money out of your account for the use of a parent's, child’s or grandchild’s home -- even if you will not live in that home!

See how nice the government is to NOT tax you on something.

See the IRS publication attached and see for yourself.

Click here Down Payment on House Gift |Tax Free Way from IRA

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"How can I improve my credit score fast"- a common question | mortgage series Part 5

"How can I improve my credit score fast?" -- Arizona mortgage company helps  provide an answer

This is part five of a five-part series on the mortgage lending process. In the first 4 parts of this series Arizona  loan officer Craig A. Bohall took us on a journey that began with an introduction to the mortgage process, followed by "thinking like an underwriter" to get your loan approved, the "4 C's" of mortgage lending (with a 5th "bonus C"),  the important " when do I lock my interest rate," and finally In part  5 Craig will talk about what's on many people's minds: "how can I improve my credit score fast?"

Credit repair is not something that can be accomplished overnight.  If you are applying for a loan from an Arizona  mortgage company  there are certain things you should understand.  Craig will take you on a video tour and provide tips on improving your credit to help you get a mortgage loan.

Credit repair will help you in the mortgage lending process.  Credit is made up of five primary categories:

1.  payment history
2.  amounts owed
3.  blanks of credit
4.  new versus old credit
5.  types of credit

This video will help you start the process of repairing your credit that you can purchase a home.

An introduction from the first video in the series:

My primary lender, Craig Bohall with Academy Mortgage, and I decided it was time to produce a series on the mortgage lending process.  There are many mortgage companies and lenders on the scene, and it's important for buyers (especially first-time buyers) to understand the  lending process.

We used Craig's lending experience and my video camera / production knowledge to produce a five-part series on the lending process. Craig has been involved in the real estate industry for 15 years, but he specifically has been a loan officer for the past eight years.  Craig has worked for several Arizona mortgage companies and has found a home at Academy Mortgage.  I would highly recommend Craig if you are looking for a real estate loan in the state of Arizona.  Picking the wrong mortgage company can cause a lot of grief.

  Still wondering "how can I improve my credit score fast?"

Part 4 of the series

Entire Series

Get a Mortgage Loan Approved

$8,000 Tax Credit Fraud Under IRS Scrutiny

$8000 Tax Credit Fraud under IRS Scrutiny

According to the Wall Street Journal, the IRS is reportedly examining more than 100,000 suspicious claims for the $8000 dollar tax credit and is investigating 167 "criminal schemes" involving the credit. IRS officials declined last week to describe the suspected schemes or provide additional details. However, they did say they have identified the different types of potential fraud and matched them against their compliance program.

We could speculate about how people are trying to commit fraud with the $8000 tax credit.  Perhaps they are modifying closing statements, commonly known as HUD-1's to make it appear the house was purchased in the correct tax year. Perhaps they are taking incorrect tax advice from their accountants.  Perhaps people are modifying HUD-1's to make it appear that they bought a house -- when in fact they did not. Regardless, the IRS taking it very seriously.

The IRS says it has received more than one million claims for the $8000 tax credit.  Housing industry experts estimate the credit helped to generate at least 350,000 additional home sales. The $8000 tax credit to set to expire on November 30, 2009 but leaders in the housing industry are lobbying Congress to extend it.

It would seem that widespread abuse would be relatively easy because of the loose standards for claiming the credit. In other words, the IRS never set anything in place with title and escrow companies to document the tax credit at time of sale.  Free money has had a history of attracting people with dishonest intent, and $8,000 is a good deal of money. This is just the kind of trouble that will delay or eliminate the proposed extension of the program, or even it's conversion to the much talked about "$15,000 tax credit."  It's always sad when dishonest people potentially destroy a good program they can benefit the masses.

On the other hand, does our country really need an extension of the $8000 credit, or even a new $15,000 tax credit?  Has our country, which already has enough debt to choke 20 medium-sized countries, need to be giving out more money it doesn't have?  It does seem that many citizens have developed an attitude of "entitlement" and expect the government to just keep giving out more and more money. But I digress...

According to the IRS website , the IRS successfully prosecuted its first fraudulent tax credit case in July 2009. A Jacksonville, Fla. tax preparer, James Otto Price III, pled guilty to falsely claiming the $8000 tax credit on a client’s federal tax return. Price faces the possibility of up to three years in jail, a fine of as much as $250,000, or both.

A quote from the IRS's website:

“We will vigorously pursue anyone who falsely tries to claim this or any other tax credit or deduction,” said Eileen Mayer, Chief, IRS Criminal Investigation. “The penalties for tax fraud are steep. Taxpayers should be wary of anyone who promises to get them a big refund.

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Mortgage Lending Process| Arizona Mortgage Loan |Part 4

Mortgage Lending Process| Arizona Mortgage Loan

This is part four of a five-part series on the mortgage lending process to educate and inspire potential homebuyers.  In the first three parts of this series Arizona mortgage broker (turned banker) Craig A. Bohall took us on a journey that began with an introduction to the mortgage process,   followed by "thinking like an underwriter" to get your loan approved, and finally the "4 C's" of mortgage lending (with a 5th "bonus C"). In part 4 Craig will talk about the most important topic to date: when to lock your interest rate on your Arizona mortgage loan. 

Do you want to appear like a knowledgeable consumer? What questions should you ask when applying for an Arizona mortgage loan? What questions make you look like a "novice" when speaking to a mortgage broker? Here is a sample of the wrong questions to ask when interviewing a potential mortgage company:

• what are the interests rates today?
• what kind of interest-rate can your company give me?

Here is the right question to ask:

• what are the markets doing today?

Watch this video and learn what your mortgage broker should know about interest rates. Beware of any loan officer in an Arizona mortgage company who is not aware of (or can not talk about)  jobless claims, the consumer confidence number, unemployment numbers, or when the Federal Reserve Chairman and Board of Governors are meeting.

Watch this video and learn the basics about the markets and economic indicators that affect interest rates. But don't be concerned -- you don't have to be an expert mortgage broker to get the best interest rates.  You simply simply need to find an expert in the mortgage lending process who will guide you through the intricacies of obtaining a mortgage loan and locking your interest rate at the correct time.

An introduction from the first video in the series:

My primary lender, Craig Bohall with Academy Mortgage, and I decided it was time to produce a series on the mortgage lending process.  There are many mortgage companies and lenders on the scene, and it's important for buyers (especially first-time buyers) to understand the  lending process.

We used Craig's lending experience and my video camera / production knowledge to produce a five-part series on the lending process. Craig has been involved in the real estate industry for 15 years, but he specifically has been a loan officer for the past eight years.  Craig has worked for several Arizona mortgage companies and has found a home at Academy Mortgage.  I would highly recommend Craig if you are looking for a real estate loan in the state of Arizona.  Picking the wrong mortgage company can cause a lot of grief.

Part 3 of the series

Get a Mortgage Loan Approved

Arizona Mortgage Company Lending Process | Part 3

Arizona Mortgage Company talks about the lending process

This is part three in a five-part series that explains what you should know as a potential homebuyer about obtaining a mortgage loan.  In this video you will hear a detailed account of how to successfully obtain a loan in Arizona and pick the right company for you.  Part one of this series was an overview of the mortgage lending process and part two provided some insightful comments about how to get your loan approved by "thinking like a mortgage company underwriter."

This video  will discuss the four "C's" lenders evaluate when you apply for a mortgage loan in Arizona (and throughout the country). Here's a quick preview of the four C's:

1. credit - a look into credit and how your payment history comes into play during the mortgage process
2. capacity - essentially your ability to cover your debt
3. cash - how much do you have and what the loan underwriter sees when evaluating your finances
4. collateral - this is essentially the value of the house you want to buy

Don't miss the bonus footage on the "5th C" that you rarely hear about.  The 5th "C" can have a dramatic impact on your ability to qualify for a mortgage loan in Arizona.  Make sure the Arizona mortgage lenders you interview are aware of how to use these criteria to ensure your best chance at getting a loan and purchasing your dream house.

An introduction from the first video in the series:

My primary lender, Craig Bohall with Academy Mortgage, and I decided it was time to produce a series on the mortgage lending process.  There are many mortgage companies and lenders on the scene, and it's important for buyers (especially first-time buyers) to understand the  lending process.

We used Craig's lending experience and my video camera / production knowledge to produce a five-part series on the lending process. Craig has been involved in the real estate industry for 15 years, but he specifically has been a loan officer for the past eight years.  Craig has worked for several Arizona mortgage companies and has found a home at Academy Mortgage.  I would highly recommend Craig if you are looking for a real estate loan in the state of Arizona.  Picking the wrong mortgage company can cause a lot of grief.

Part 2 of the series

Get a Mortgage Loan Approved

Arizona Mortgage Lenders | Lending Process Part 2

Arizona Mortgage Lender talks about the mortgage loan process

This is part two in a five-part series that explains what consumers should know about obtaining a mortgage loan.  In this installment you will hear what it takes to get a loan approved from a lender.  Do you know one of the best secrets to getting a loan approved? Think like a mortgage company underwriter.

Although your Arizona mortgage lenders are your point of contact, the investor's underwriter has the final say on whether or not your loan will be approved.  It's important to know that underwriters get paid to "smell risk." What kinds of risks do the underwriters look for in the mortgage lending process:

• The most obvious is probably the borrowers credit; that's the most basic place for any underwriter to start.
• What about your job history? Do you change jobs like you change underwear, or are you a stalwart company veteran, or are you somewhere in between?
• Hear Craig talk about more important factors that go into the underwriter's approval process.

A good loan officer will make sure your loan application doesn't have the smell of risk in it.

An explanation from the last post:

My primary lender, Craig Bohall with Academy Mortgage, and I decided it was time to produce a series on the mortgage lending process.  There are many mortgage companies and lenders on the scene, and it's important for buyers (especially first-time buyers) to understand the  lending process.

We used Craig's mortgage lending experience and my video camera / production knowledge to produce a five-part series on the lending process. Craig has been involved in the real estate industry for 15 years, but he specifically has been a loan officer for the past eight years.  Craig has worked for several Arizona mortgage companies and has found a home at Academy Mortgage.  I would highly recommend Craig if you are looking for a real estate loan in the state of Arizona.  Picking the wrong mortgage company can cause a lot of grief.

Part 1 of the series

Get a Mortgage Loan Approved

Arizona Mortgage Company | Loan | Process Part 1

Arizona Mortgage Company talks about the mortgage lending process

My primary lender, Craig Bohall with Academy Mortgage, and I decided it was time to produce a series on the mortgage lending process.  There are many mortgage companies and lenders on the scene, and it's important for buyers (especially first-time buyers) to understand the mortgage lending process.

This introductory video will give a "birds eye view" of obtaining a mortgage loan, whether it be in Arizona or elsewhere.  Many times a buyer doesn't get all the information that he or she requires because they don't know how to ask the right questions.  Perhaps the mortgage lender/company assumes the buyer knows certain facts about mortgage lending that the buyer really doesn't even have a clue about. I think that happens in all industries -- the industry professional knows so much about the industry and sometimes assumes it's common knowledge. So we used Craig's mortgage lending experience and my video camera / production knowledge to produce a five-part series on the mortgage process.

Craig has been involved in the real estate industry for 15 years, but he specifically has been a loan officer for the past eight years.  Craig has worked for several Arizona mortgage companies and has found a home at Academy Mortgage.  I would highly recommend Craig if you are looking for a mortgage loan in the state of Arizona.  Picking the wrong mortgage company can cause a lot of grief. In future series Craig explains many topics  that are important to the mortgage process.

The Arizona real estate market is volatile enough.  The last thing you need is to work with an Arizona mortgage lender that is not experienced and doesn't know how to watch the key indicators when locking a mortgage rate. We hope you enjoy these videos.

Mortgage Loans in Arizona

Distressed Markets and private mortgage insurance

Distressed Markets and private mortgage insurance

by Craig Bohall, Academy Mortgage
Have you ever wanted to know who decides what "distressed markets" are and what is not distressed? Well here is your chance to see a map.

Who is the "all knowing wizard" who determines that? Well for the most part it is the Mortgage Insurance (MI) companies. Fannie Mae and Freddie Mac also have their own lists. When a home gets sold at the trustee's sale, the Mortgage Insurance company likely had a policy on that home and, thus, they paid out on that policy. So imagine how many pay outs they have had in the last several years. 

Guess how many they are planning on having the next few years? That's right -- their goal is "zero" mortgage insurance payouts!  So in order to minimize risk and maximize profits they don't want to give mortgage insurance to loans that they feel might be risky for THEM.

What makes a loan risky you ask.... could be 1.) an investor loan rather than an owner occupied loan, 2.)  a manufactured home rather than a "stick-built" one, 3.) a second home, 4.) any higher "loan to value" loans and, 5) a loan in a HIGH foreclosure area. Regarding the latter, they decided they would determine which areas had more losses and call those areas high risk or "distressed markets." Other factors go into it like % of price deterioration and % of REO's to resales and such, but all in all  - distressed markets - is pretty self explanatory.

The good news is when you click on this map it is not one solid color  - YES, it was at one time. People used to ask me what areas are distressed and I basically said "South of Canada and North of Mexico!

Now click on this Map of distressed markets in the US to see what areas they have deemed to be distressed. If you are buying in those areas then having mortgage insurance is going to be less available  - or in other words - there will be a much bigger list of loans for which they DON"T want to give mortgage insurance.

To see that list of loans  not eligible for Mortgage insurance click here.  The interesting thing about this list (at the top of the page) is that a few years ago all, or most, of those items COULD have mortgage insurance. So now you can see what they consider to be risky. Basically everything except 20% down !

Could buying Metro Phoenix foreclosures get easier? 15 day "First Look" program

Could buying Metro Phoenix foreclosures get easier? 15 day "First Look" program

by Craig Bohall, Academy Mortgage, craig@myazmp.com

Simple answer:  HECK YES.  If we could cut out the government's addictive overdosing of regulations that have been piled on like a 7 layer bean dip ... but since that is not going to happen any time soon we can take joy in small victories like this 15 day "First Look" program.

The government-run Fannie Mae has come out recently with a plan to keep investors away from their foreclosures for 15 days  and allow the average Joe/Jane a first look to get in their offers before investors. A reporter from the AZ Republic (serving the Phoenix area) had this to say regarding this announcement...

"Arizona home buyers trying to tap federal funds to help them purchase foreclosure homes might find it a little easier now. Mortgage giant Fannie Mae recently launched a program called “First Look” that bars investors for bidding on its foreclosures for the first 15 days they go on the market. In metropolitan Phoenix, first-time buyers typically lose out to investors on the best foreclosure homes. "

To read Catherine Reagor's full story http://www.azcentral.com/members/Blog/CatherineReagor/63525>Click here.

So is this good or bad? Well depends whether you are Joe Average or Jane investor buying Phoenix foreclosures doesn't it? On the one hand poor Joe Average was previously getting beat out on the 60K home in Phoenix when he offered 62K. That's because a cash investor was there who could close in 48 hours while the Joe Average will need 30 days to close through his lender.  On the other hand, without Jane investor helping to stop prices from falling and even create some bidding wars for Phoenix foreclosures -- we would be left to the pricing "mud-slide" we saw for months on end!

On the one hand, Jane investor can buy 20 Phoenix foreclosures and Joe Average can only buy one foreclosure, so who is helping the economy and helping to reduce inventory more?  But we Americans sooooo love to find something that seems unfair and get the government to regulate it.

But on the other hand, if the government is going to give federal funds ONLY to Joe Averages (no investors) they should have some say in letting Joe Average "to the dance" 15 days before investors swarm in on Phoenix foreclosures with a first look

Yet, on the other hand, if they let free market principles work the highest bidder gets the foreclosures. Maybe the investor wants a great deal and bids 60K while Joe Average out bids him with 65K or 69K. Would that make our housing market rebound and get normal sellers back in the market sooner? Will that allow the market to run on it's own again instead of this "propping up" that we have now.

However, on the other hand... I am out of hands. What do you think about the 15 day "First Look" program and it effect on Phoenix foreclosures?

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Can you get an advance on your FHA $8,000 tax credit for 2009?

by Craig
The latest buzz is that the first time homebuyer tax credit can maybe now be accessed in advance of you filing your taxes rather than wait till after you buy the home and then filing your taxes for the credit.  Sort of like getting an advance from your employer on your next paycheck.

So what happened was a letter was published that went to every lender in the country and was put on the HUD website for public viewing saying YES WE WILL ALLOW THIS (advance) ON YOUR FUTURE TAX CREDIT. This is the equivalent of the government saying we are going to MARS -- but we have not built the rocket yet to get us there.

Here was the exact wording that started the stir…

 “We all want to enable FHA consumers to access the tax credit funds when they close on their home loans so that the cash can be used as a down payment. So FHA will permit trusted FHA-approved lenders and HUD-approved nonprofits, as well as state and local governmental entities to "monetize" the tax credit through short-term bridge loans. We think the policy is a real win for everyone, ensuring that borrowers can tap into the numerous organizations that are already part of the FHA network to receive this additional benefit. FHA will be publishing the details shortly.”