Real Estate Information

It's tax time and I'm frequently asked what 'points' are and if they are deductible. Points refer to prepaid interest on a home mortgage and can be fully deductible by the buyer in the year paid if the right conditions exist. The points must be used to buy, build or improve a taxpayer's principal residence but not all fees charged by the lender are necessarily deductible.

According to IRS Publication 936, "The term 'points' is used to describe certain charges paid, or treated as paid, by a borrower to obtain a home mortgage. Points may also be called loan origination fees, maximum loan charges, loan discount, or discount points. A borrower is treated as paying any points that a home seller pays for the borrower's mortgage."

If you purchased a home in 2011, have your tax professional evaluate your closing statement to see if there are loan fees that may be used as a deduction on your tax return regardless of whether you or the seller paid them.

Refinancing a principal residence or purchasing an investment or income property require that points must be deducted ratably over the term of the mortgage rather than deducting them fully in the year paid. Borrowers in these situations should consider the benefits of lower interest rates from paying point to higher interest rates without points.

This article is meant to provide information that can be discussed with your tax professional about your specific situation and is not to be considered tax advice.

With the amount of taxes we all pay these days, none of us can afford to miss any deductions!

Choose Your Deduction

One third of all U.S. households, 75% of households with more than $75,000 income and most homeowners itemize their deduction on their federal income tax returns. It makes sense because the interest paid on their mortgage and their property taxes probably exceeds the allowable standard deduction.

However, with interest rates as low as they have been in the last two years and the price of homes having come down considerably, it is possible that the standard deduction may be the better choice.

Each year, the taxpayer can compare the total of the itemized deductions to the standard deduction to select which method will result in the most benefits. The 2011 standard deduction is $11,600 for married couple filing jointly and $5,800 for single filers.

The Housing and Economic Recovery Act of 2008 allows homeowners to take the standard deduction and the lesser of their actual property taxes of $1,000 if filing their return married jointly. For more information, see Schedule L found on www.IRS.gov and consult your tax advisor.

a460118b-2714-4f7b-9966-fa61eee2ff0c.html

Test Homes for Radon During National Radon Action Month

You can't see, smell, or taste radon, but it could be present at a dangerous level in your home. January is Radon Action Month and Oakland County Health Division is urging residents to protect their health by testing their homes for radon.

Radon is a naturally occurring, invisible, odorless gas that is usually harmless outdoors. When radon is trapped under a building, it can work its way in through cracks and crevices and accumulate to levels that can be harmful to human health. Exposure to elevated radon levels does not cause any physical signs or symptoms.

It is the second leading cause of lung cancer among people nationwide. In Michigan alone, 600 new cases of lung cancer are estimated to be caused by radon each year.

The only way to know your home is affected is to test it. The best time to test your home for radon is during the cooler months when the windows and doors are closed.

Oakland County Health Division is offering radon test kits for only $5 each throughout January 2012. Radon test kits are available at both Oakland County Health Division offices:

· Pontiac - 1200 North Telegraph, Building 34E· Southfield - 27725 Greenfield Road

If high levels of radon are found in your home, steps can be taken to reduce these levels. For more information, go to www.oakgov.com/health/how_do_i/eh_radon.html or call Oakland County Health Division at 248-858-1312 or 248-424-7190. 

Work hard, buy a home, start a family and continue to upgrade your home until everyone has enough room. This has been the blueprint for lots of homeowners for the last fifty years but there is certainly a shift in thinking that could change all of that.

Interestingly, Americans live in much larger homes than most people in other countries throughout the world. The U.S. Census reported in 2006 that the average single family home completed had 2,469 square feet which was 769 feet more than in 1976.

Michigan Foreclosure Laws and Statutes | MI

Michigan Foreclosure is by Advertisement.

Mortgage Foreclosure by Advertisement:

1. Michigan foreclosure law states that a mortgage must include a Power of Sale that permits the property to be sold by public auction in the event of a default by the mortgagor in the terms and conditions of the mortgage.
2. All assignments of the mortgage must be recorded.
3. There must be a default under the terms of the mortgage, which makes the power of sale operative.
4. The mortgagor must be given any required notices of default provided for under the terms of the mortgage and Note.
5. The indebtedness must be accelerated.
6. There cannot be any judicial action pending at law for recovery of the debt or any portion thereof.

Michigan Foreclosure Publication and Posting Requirements:

1. The Notice of Sale is published in the newspaper. According to Michigan foreclosure law, the Notice of Sale must include the following:
a. The names of the mortgagor and of the mortgagee, and the assignees of the mortgage, if any;
b. The date of the mortgage, and when recorded
c. The amount claimed due as of the date of the notice (the date of the first publication).
d. The legal description of the property.
e. The length of the redemption period.
2. The Notice of Sale must be published for 4 successive weeks, at least once each week.
3. Within 15 days after the first publication a true copy of the Notice must be posted in a conspicuous place on the property.

Michigan Foreclosure Sale :

1. The mortgagee may make a credit bid at the sale and purchase the property.
The purchaser at the sale receives a Deed to the property.
a. The Deed only becomes operative if the property is not redeemed during the statutory redemption period.
b. Upon expiration of the statutory redemption period, the purchaser acquires all right, title and interest, which the mortgagor held at the time that the mortgage was executed, as well as any right, title or interest acquired by the mortgagor subsequent to the execution of the mortgage.
c. The mortgagor continues to have the right to possession of the property until after the expiration of the statutory redemption period.
d. The Sheriff's Deed should be recorded within 20 days of the date of sale. If the Deed is not recorded within 20 days of the date of sale, it does not invalidate the sale; however, the redemption period does not begin to run until the date the deed is recorded.

Michigan Foreclosure Statutory Redemption Period:

1. For a mortgage on residential property not exceeding 4 units and not more than 3 acres in size, if the amount claimed to be due on the mortgage at the date of the notice of foreclosure is more than 66-2/3% of the original indebtedness secured by the mortgage, the redemption period is 6 months.
2. If the property is abandoned as determined pursuant to the statute, the redemption period can be shortened to 30 days.
3. In any other case, the redemption period is 1 year from the date of sale.
4. The redemption price is an amount equal to the amount bid at the sale together with interest from the time of the sale, at the rate set forth in the mortgage.
Paying of Taxes or Insurance During the Redemption Period: If after the Michigan foreclosure sale the purchaser pays taxes or hazard insurance on the property, that amount is added to the redemption amount, so long as an affidavit is recorded.

Redemption:

A purchaser's Deed is void if the mortgagor redeems the entire premises sold by paying the amount required within the applicable time limit. Payment must be made to the purchaser or the county register of deeds.

Foreclosure Redemption period – Six months (in some instances it could be 1 year).

Eviction - 30 Days:

1. If the mortgagor does not redeem, and does not vacate the property, a summary proceedings action (eviction action) must be commenced in the district court.
2. A complaint is filed with the district court and the occupants served.
3. A court date is held, usually within 10 to 20 days.
4. The former owners and any occupants are allowed 10 days from the date of the hearing (if a judgment is entered), to move from the premises (unless allowed more time by the mortgage company or its representative).
5. If the former owner does not vacate by the required date, a Writ of Restitution is filed with the court and issued by the judge.
6. A court officer goes out to the house and puts the mortgage company back into peaceful possession of the property by evicting the occupants and their possessions.
Sending of a Notice of Default Letter (if required under the mortgage) – 30 days
Publication – The notice of a Michigan foreclosure sale must be published once a week for four weeks in a newspaper of general circulation in the county where the land is situated. Within 15 days after the first publication, a true copy of the foreclosure notice must be posted in a conspicuous place on the premises described in the foreclosure notice. (with the sale taking place approximately 1 week after the end of publication (35 days) The sale must be a public sale, conducted between the hours of 9 o’clock "in the forenoon" and 4 o'clock in the afternoon.

"The significant problems you face today cannot be solved at the same level of thinking you were at when you created them." Albert Einstein

The housing market has definitely caused significant problems for some people but is also providing some amazing opportunities for others. Agents aren't like retailers who wake up one day realizing they have the wrong merchandise on the shelves, have a clearance sale and recreate our inventory next week. We don't control the inventory but a good agent has the *business* skills to interpret in advance of the changes taking place in the market!

Everyone needs a place to live and whether you rent or buy, you are going to pay for the house you occupy. While the home for sale remains the same, the methods that produce results have to change.

Financing can make listings more marketable and structure a transaction to provide the buyer with the very least expensive cost of housing. Personal experience may be a great teacher, but a very expensive way to learn!  Forming a rock star purchasing team consisting of a highly skilled real estate agent, loan rep and title company will provide information and tools enabling a buyer to make better decisions to be able to profit in the current market. I have access to the BEST in the industry. Save yourself significant problems, it's too important to trust just anyone.