Do I need to Homestead my property?

CFPB

In a distressed housing market, it is natural for homeowners to question the security of their homeownership. Attached is an informative piece on how a homestead declaration operates in the state of California.It is important to remember that a homestead provision offers homeowners only limited protection from a forced sale to satisfy certain debts.  As always, we kindly recommended you direct all legal/debt questions to the proper professional.

What is a Legal Description?

A Legal Description (also known as Land Description) consists of the written words which delineate a specific piece of real property.  In the written transfer of real property, it is universally required that the instrument of conveyance (in California, a Grant Deed) include a written description of the property. Attached please find examples of how legal descriptions appear on title documents of record.

CFPB

IMPORTANT TITLE TIP:  As title insurers, it is the Legal Description and the corresponding Assessor’s Parcel Number (APN) that we insure to, NOT the property’s address.  The Post Master and Tax Assessor employ two different means of classifying property.

Click here for sample

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Western Resources Title’s Property Profile Summary Report!

profile1All of our property profiles include an easy-to-read summary of critical items that may affect the sale of a property.  No more need to decipher confusing documents!  This straight forward, easy-to-read format puts everything you need to know at your fingertips.

  • Current Deeds of Trust
  • Property Taxes
  • HOA and Mechanics Liens
  • Lis Pendens
  • Foreclosure Activity

 

Make it easy on yourself and order your next property profile from Western Resources Title today!

Click Here for Sample

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  • No Minimums, Fixed Pricing
  • Phones, Demographic, Mortgage Data – $.06 per record.
  • Foreclosure Data – Notice of Default, Notice of Trustee’s Sale, REO – $.08 per record.
  • Rate Rider Data – ARM reset – $.25 per record.

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Understanding a Trustee’s Deed Upon Sale

Title industry figures reveal that over the last decade forgery losses tripled, accounting now for over 20% of the losses paid by title insurers.

A Trustee’s Deed Upon Sale, also known as a Trustee’s Deed Under Sale or a Trustee’s Deed is a deed of foreclosure.  This deed is prepared after a property’s foreclosure sale and recorded in the county were the property is located.  The Trustee’s Deed transfers the property to the buyer who purchased the foreclosed property at auction.

California foreclosure law states that on the day that has been established for the sale of the property, and only after all publication period requirements have been met (NOD & NOT time periods), the property is sold to the highest bidder for cash for the full amount of the debt plus foreclosure fees and expenses. If no one bids at the Trustee’s Sale, the property automatically reverts back to the beneficiary (the bank) for the debt.

Special Note: The successful bidder of a Trustee Sale receives a Trustee’s Deed Upon Sale, which conveys full ownership of the bundle of rights but comes with no guarantee’s that the title is clean.  The property may be in default on taxes, have mechanic’s liens and/or other encumbrances.  Trustee’s deeds come with many risks and title insurance cannot be purchased to cover them.

Staying on Top of Your Short Sale Transactions.

We’ve prepared this checklist to help you have a smooth closing of your transaction and avoid those last minute snags.

Is the approval letter current? 
The approval letter must be current.  The letter will state the date by which the transaction must close and/or the date the funds need to be received.  If these dates cannot be met an extension will be required.  This may be in the form of a new letter or an email.  Send all of them to us and we can close.

Does the information on the approval letter match the transaction?
The approval letter(s) will list the accepted sales price and the anticipated buyer.  Be sure the information is current. Title cannot close the transaction unless the information on the letter matches the specifics of the file.

Are there approval letters for each loan on the property?
Approval letters are required for each loan.  If both loans are with the same lender they may issue one letter covering both loans.

Does the lender require an estimated HUD1 prior to closing?
In ALL cases the lender will require an estimated HUD-1 for approval prior to closing.  A copy of the approved HUD-1 must be submitted to title for each loan prior to closing/recording.

Is the seller allowed to receive funds?  
99% of the time the seller cannot receive any proceeds from the sale.  Some lenders are allowing Seller’s some money but this is rare.  It must be stated in the approval letter.

Have all the lenders conditions been met?  
It is very important to review the approval letters carefully.  Some lenders will require notarized signatures of all parties in the transaction including the agents.  If all conditions are not met and fulfilled according to the approval letter, the lender may reject the payoff and continue with the foreclosure, even after the close of the escrow.

Southland Closes 2012 With Higher Sales and Prices

As seen on DQNEWS.com

La Jolla, CA—Southern California’s housing market ended 2012 with the highest December home sales in three years, the result of robust investment activity, a record level of cash buyers and more sales gains in move-up markets. The median sale price jumped nearly 20 percent from a year ago, pushed higher by greater demand and the market’s shift away from foreclosure resales and toward more mid- to high-end deals, a real estate information service reported.

A total of 20,274 new and resale houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month. That was up 5.1 percent from 19,285 sales in November, and up 5.3 percent from 19,247 sales in December 2011, according to San Diego-based DataQuick.

A rise in sales from November to December is normal for the season. Last month’s sales were the highest for the month of December since 22,328 homes sold in December 2009, though they were 17.2 percent below the December average of 24,488 sales since 1988, when DataQuick’s statistics begin. The low for December sales was 13,240 in 2007, while the high was 36,865 in 2003.

The median price paid for a home in the six-county Southland was $323,000 last month, up 0.6 percent from $321,000 in November and up 19.6 percent from $270,000 in December 2011. For the past four consecutive months the median has been the highest since it was $330,000 in August 2008. The Southland median has risen or held steady month-to-month for 11 consecutive months and has increased year-over-year for nine consecutive months.

“The housing market had more to offer in 2012 than many anticipated. A lot of markets not only found a price bottom as foreclosures waned but they started to see their first meaningful gains in nearly two years. Buyers on the fence were drawn back into the housing game by amazingly low mortgage rates, a brighter jobs outlook and, in some cases, a renewed sense of urgency,” said John Walsh, DataQuick president.

“Last year should also be remembered as the year the move-up market awoke. If these upward trends hold, which requires a sustained economic recovery, we should eventually see more inventory hit the market. More would-be sellers will be satisfied with what their homes can fetch, and fewer people will owe more than their homes are worth, freeing them up to move. The rise in inventory would at least tame price appreciation.”

Click here for entire article.

Click here for a foreclosure update from DQNEWS.com

Mortgage cancellation relief for home owners has been extended!

As seen on Reatlor.org

On Jan. 1 both the Senate and House passed H.R. 8, legislation to avert the “fiscal cliff.” The bill will be signed shortly by President Barack Obama.

Below are a summary of real estate related provisions in the bill:

Real Estate Tax Extenders

  • Mortgage Cancellation Relief is extended for one year to Jan. 1, 2014
  • Deduction for Mortgage Insurance Premiums for filers making below $110,000 is extended through 2013 and made retroactive to cover 2012
  • 15 year straight-line cost recovery for qualified leasehold improvements on commercial properties is extended through 2013 and made retroactive to cover 2012.
  • The 10 percent tax credit (up to $500) for homeowners for energy improvements to existing homes is extended through 2013 and made retroactive to cover 2012.

Permanent Repeal of Pease Limitations for 99% of Taxpayers

Under the agreement so called “Pease Limitations” that reduce the value of itemized deductions are permanently repealed for most taxpayers but will be reinstituted for high income filers.  These limitations will only apply to individuals earning more than $250,000 and joint filers earning above $300,000.  These thresholds have been increased and are indexed for inflation and will rise over time.  Under the formula, the amount of adjusted gross income above the threshold is multiplied by three percent.  That amount is then used to reduce the total value of the filer’s itemized deductions.  The total amount of reduction cannot exceed 80 percent of the filer’s itemized deductions.

These limits were first enacted in 1990 (named for the Ohio Congressman Don Pease who came up with the idea) and continued throughout the Clinton years.  They were gradually phased out as a result of the 2001 tax cuts and were completely eliminated in 2010-2012.  Had we gone over the fiscal cliff, Pease limitations would have been reinstituted on all filers starting at $174,450 of adjusted gross income.

Capital Gains

Capital Gains rate stays at 15 percent for those the top rate of $400,000 individual and $450,000 joint return.  After that, any gains above those amounts will be taxed at 20 percent.  The 250/500k exclusion for sale of principle residence remains in place.

Estate Tax

The first $5 million dollars in individual estates and $10 million for family estates are now exempted from the estate tax.  After that the rate will be 40 percent, up from 35 percent.  The exemption amounts are indexed for inflation.

Blog post by: Realtor.org

Expiring Mortgage Debt Relief Act Fuels Strategic Default: Survey

As seen in DSNEWS.com

A foreclosure prevention agency found that the pending expiration of the Mortgage Debt Relief Act of 2007 is prompting struggling homeowners to strategically default on their loan.

YouWalkAway.com conducted a national survey and found 34 percent of respondents indicated that the act, which is set to expire December 31, 2012, contributed to their decision to walk away sooner rather than later from their property. Those surveyed were YouWalkAway.com clients who were actively considering or navigating through the foreclosure process.

The Mortgage Debt Relief Act releases homeowners from the obligation of paying taxes on mortgage debt forgiven from a short sale, foreclosure, or modification. Taxpayers are eligible if the property is the primary residence.

For entire article click here

Bank of America offers relo assistance to short-sellers

As seen in Inman.com

Bank of America says it will provide up to $30,000 in relocation assistance to delinquent borrowers who work with the bank to obtain a preapproved short-sale price before submitting purchase offers.

Short sales must be initiated by the end of this year and close by Sept. 26, 2013, to be eligible for the payments, which will range from $2,500 to $30,000 at the completion of a qualifying short sale. Payments will be determined on a case-by-case basis using a calculation that includes the value of the home, amount owed and other considerations, Bank of America said in announcing the program.

Click here for full article.