The real deal about Los Angeles real estate.....really!

This is a blog from Joe Petrowsky that I wanted to share with everyone.

I just thought it was the coolest thing ever to be able to download coupons, and also have the website where you can plug in ingredients you have in your home.

I need that myself as I HATE wasting food.

Anyway, check out these two websites:  Coupon Sherpa and Gojee.com

• Los Angeles Homes For Sale
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Foreclosure is the process by which a bank or lender takes possession of collateral used to secure a loan. Put another way, foreclosure happens to a homeowner when he or she doesn't pay their mortgage.

Each state has its own legislature that deals with deficiency judgements.  You would need to look up your particular states laws when it comes to deficiency judgements.  California is a state that has anti-deficiency laws in place.

Anti-Deficiency Laws Protect Real Estate Debtors

An anti-deficiency law is a law that states that a lender in a real estate transaction cannot pursue a judgment against the borrower if the borrower defaults on the underlying real estate loan and the lender fails to recoup the entire amount of the loan.Section 580b Anti-Deficiency Protection for Purchase Money Mortgages for 1-to-4 Unit Properties Section 580b prohibits a deficiency judgment against a borrower who incurred a loan to purchase a residential property (as opposed to a refinance), and if that property is one-to-four units. Refinance loans do not fall within 580b-so refinancers beware, you might be giving up some anti-deficiency protection if you refinance your original purchase money loan. Nevertheless, refinancing borrowers may still enjoy anti-deficiency protection by virtue of Civil Code 580d.

An example will illustrate: Assume a borrower borrows $500,000 from a lender to purchase a property costing $550,000. Soon after, the borrower falls behind in his payments, and the bank is forced to foreclose, and the home is ultimately sold for $400,000. The $100,000 that the lender lost on the deal is called a "deficiency" or "deficiency judgment." In California, in some circumstances, the bank can not sue the borrower for the amount of the deficiency-hence the term "anti-deficiency protection."

California's anti-deficiency rules are found in Section 580 of the California Civil Code. There are two separate provisions, and the two provisions overlap slightly:

Section 580d Anti-Deficiency Protection for All "Trustee's Sale" Foreclosures

Section 580d sets forth far broader anti-deficiency protection. Section 580d protects all borrowers from anti-deficiency protection in foreclosures that are "power of sale" or "trustee's sale" foreclosures-as opposed to a judicial foreclosure. Judicial foreclosures are very rare, and is almost never used in residential foreclosures.

And so, with such powerful anti-judgment protection for borrowers, what happens to the loan that the lender made? In short, the lender takes a loss on the loan, and the borrower, while immune from lawsuit, gets a very serious negative mark on his or her credit.

There is another curious after-effect to a California foreclosure where lender is blocked by the anti-deficiency rules: the lender issues a 1099 to the borrower in the amount of the lender's loss on the loan. The 1099 is issued for "cancellation of debt" income-which is, technically speaking, taxable income under the US tax laws. Credit card companies often issue 1099s for "COD" income when they write off a bad debt. The lender, by issuing a 1099, can write off the lost loan and reduce its taxable income.

A foreclosed borrower faced with a sizeable 1099 can still maneuver and avoid a stiff tax bill: the foreclosed borrower may exclude the amount of the forgiven debt from his or her income. The borrower must file IRS "Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness." If the borrower is insolvent at the time of the forgiven debt, the IRS may forgive the liability.

If faced with such a 1099-get some professional guidance, it'll go a long way.

Tax Credit for New Home Purchase

In addition to the updated items identified on this page, we have updated Form 3528-A and the instructions for line 6 and Part III. If you have already faxed a completed application, you DO NOT need to resubmit a new application.

This tax credit is available for qualified buyers who on or after March 1, 2009, and before March 1, 2010, purchase a qualified principal residence that has never been occupied. The buyer must reside in the new home for a minimum of two years immediately following the purchase date.

Tax credit amounts

California allocated $100,000,000 for this tax credit. Buyers must apply for credit allocation from us. Applications will be reviewed and credit allocations will be made on a first-come, first-served basis. Once $100,000,000 has been allocated, the tax credit will no longer be available.

California allows qualified new home buyers a total tax credit amount equal to either five percent of the purchase price or $10,000, whichever is less. Taxpayers must apply the total tax credit in equal amounts over three successive taxable years (maximum of $3,333 per year) beginning with the taxable year (2009 or 2010) in which the new home is purchased.

How to apply

• Within one week (seven calendar days) after the close of escrow:
  • The seller must complete Part I of Form 3528-A, Application for New Home Credit, certifying that the home has never been occupied, and provide a copy to the buyer or escrow person.
  • The buyer will complete Parts II & III of Form 3528-A.
  • The escrow person on behalf of the seller and buyer will fax the completed Form 3528-A to FTB at 916.845.9754, and provide a copy to the buyer.
• Fax is the only delivery method that will be accepted and considered for credit allocation by FTB, as the date and time stamp on the fax will determine the order in which credits are allocated.
• Fax only one completed application per residence with all qualified buyers listed. Do not include information on nonqualified buyers. An incomplete application may delay or prevent credit allocation.
• Do not fax the application to FTB before escrow closes.
• Do not fax the application to FTB more than once. We will process the applications in the order received as quickly as possible.
• Escrow companies should only send one application per fax transmission.
• The buyer keeps a copy of the completed Form 3528-A for their records.
• The Form 3528-A is now available online as a fillable form. Simply fill in all required information, print the form, and sign. If you fill out the form by hand, please print numbers as clearly and neatly as possible using CAPITAL LETTERS and staying between the lines. The faxes can be very hard to read.

Application processing

• The buyer will receive notification of credit allocation from us.
• An allocation of credit will not be issued if:
  • The home has been previously occupied.
  • The application is not received within one week after the close of escrow.
  • The application is received after the total credits available ($100,000,000) have been allocated.

Requirements of the credit

• The home must be a "qualified principal residence" as defined under California Revenue and Taxation Code Section 17059(b)(1). The home must:
  • Be a single-family residence, whether detached or attached.
  • Never have been previously occupied.
  • Be occupied by the taxpayer for a minimum of two years.
  • Be eligible for the property tax homeowner's exemption under California Revenue and Taxation Code Section 218.
• For over three successive taxable years, the total credit allocated among owners that occupy the home must not exceed $10,000. (Multiple qualified buyers that occupy the home will be allocated credit based on the amount paid and their percentage of ownership.)
• Any credit that reduced tax on a tax return must be repaid if the buyer does not occupy the home for at least two years immediately following the purchase date.
• FTB may request documentation to ensure buyers have complied with the requirements of the credit.

Claiming the credit

• The buyer must receive an allocation of credit from us to claim the credit. The credit allocation letter will state the amount they can claim listed by tax year.
• The buyer should refer to Publication 3528 (available by 12/2009) for instructions on claiming the credit.
• The buyer must claim the credit on an original timely filed return, including returns filed on an extension.
• Special rules apply to married/RDP (Registered Domestic Partners) taxpayers filing separately, in which case each spouse is entitled to one-half of the credit, even if their ownership percentages are not equal. For two or more taxpayers who are not married/RDP, the credit amount will have already been allocated to each taxpayer occupying the residence on their respective credit allocation letter.
• If the available credit exceeds the current year net tax, the unused credit may not be carried over to the following year.
• The credit is not refundable.

Definitions

Purchase date:
The date escrow closes.

Qualified buyer:
A taxpayer who purchases a single-family residence, whether detached or attached, that has never been occupied, that is purchased to be the principal residence of the taxpayer for a minimum of two years, and that is eligible for the homeowner's exemption under California Revenue and Taxation Code Section 218.

Qualified Principal Residence/New Home:
A qualified principal residence means a single-family residence, whether detached or attached, that has never been occupied and is purchased to be the principal residence of the taxpayer for a minimum of two years and is eligible for the property tax homeowner's exemption.

• Types of residence: Any of the following can qualify if it is your principal residence and is subject to property tax, whether real or personal property: a single family residence, a condominium, a unit in a cooperative project, a houseboat, a manufactured home, or a mobile home.
• Owner-built property: A home constructed by an owner -taxpayer is not eligible for the New Home Credit because the home has not been "purchased."