Understanding mortgage graphs and interest only house loans is important when buying a house. See why in this free video on real estate and bank loans.
Expert: Jim DiVietri
Bio: Jim DiVietri Worked as a mortgage loan officer for over 5 years in Lansing, MI.
Filmmaker: Robert Rogers
Duration : 0:1:18
Tax on 1099C, Cancellation of Debt Income; Short Sale, Loan Modification & Foreclosure. Exception; Mortgage Forgiveness Debt Relief Act, Bankruptcy & Insolvency. Go To http://RealEstateMarketingThisWeek.com
Part 4 (Excerpt)
1099 C is for Cancellation of Debt Income Only, not for Interest Rate and Payment Reduction
So for people who find themselves in a very difficult situation considering these options whether it’s a loan modification or a short sale, whatever they need to do to relieve themselves of this particular burden of a mortgage, that for whatever reason they’re no longer able to maintain, they are not always considering the tax ramifications associated with taking a specific course of action, like this example the short sale option.
Right there is actually two pieces of tax component here, you have the forgiveness of debt income that we talked about, they still have the fact that you sold your house and you have to see if there was a gain on that. Over and above the cost basis of the home.
We talked about the 1099Cs a few moments ago, did you say that the lender sends a copy of the 1099C to the IRS? Absolutely.
Now I’m the guy for a few minutes ago who bailed on $400,000 and sold it for $300,000 am I going to get a copy of the 1099C if I haven’t given my lender my new address. Well that could be a problem, they will send it to the last address they have on record for you. And as a homeowner it’s my problem.
The IRS will get a copy, so they will look for it on your return, if you forget to put it on then you’re going to get a friendly notice from the IRS.
If somebody is going to do a short sale, its a fairly civil transaction and when I say civil I mean going for a short sale is horrible for them and their family, but it beats the alternative which is foreclosure, and I think the real problem is when there’s a foreclosure and the guy just walks away and moves off to El Centro California, he’s the one who’s really getting hurt.
So in the event that somebody takes a course of action, and I know that Velocity financial and Michael Barnes, youre not necessarily advocates for that short sale approach. It’s not normally the best course of action, we’ve been talking about loan modifications and it would help me when I talk to clients, or people who call from radio broadcasts who asked questions about loan modification process as part of a financial strategy, help me with some of the tax ramifications. Let’s say that I have a loan and I know the best thing for me is a loan modification, am I going to be faced with a 1099? A tax bill at the end of a loan modification?
Yes, the first of the two tax implications will apply which will be the debt forgiveness part.
I didn’t mean to interrupt you Mike, well I said there are several different types of loan modifications, I believe are you asking about when the loan modification is where they actually do forgive some of the debt?
Thats a point, I know there’s been a lot of discussion on the use of the TARP funds especially from the federal government regarding these banks that qualify for some of these funds, they have to do principle reductions for their mortgages. So let’s say there isn’t a principal reduction involved, from that aspect, its not a taxable event that could take place, since I’m not reducing my principal, I’m simply getting a reduction in my term or my rate.
That’s right, the only time that taxes would come into play is when the principal gets reduced because thats forgiveness of debt.
So let’s take that one step further, whatever mortgage interest I’m able to deduct on my taxes may be impacted if it’s a lower percentage, right because youll be paying less interest, but there’ll be no surprise 1099 coming your way if its just an interest modification.
One of the things that I like to make thing clear is that were trying to do the best for you the homeowner so you can stay in your home. The situation I’m talking about, the $400,000, the lender is more likely than not is not going to forgive $100,000, however the same lender is more than willing to reduce your interest rate so that your payment would be the same if they have done the principal reduction, because it’s not a permanent loss for the bank. If there is someone out there who’s telling you that they can have your mortgage reduced by tens of thousands or hundreds of thousands of dollars, it’s not going to happen and I doubt it’s going to happen anytime soon.
Duration : 0:5:58
Interview and discussion with Melissa Cohn of the Manhattan Mortgage Company. He talks about home lending and housing market. (Bloomberg News)
Duration : 0:3:49
When deducting home mortgage loan interest, do not forget to fill out line five on the 1098 form which asks for amount spent on real estate taxes. Understand all the requirements to deducting home mortgage loan interest from personal taxes safely and legally with tips from an experienced tax professional in this free video on taxes.
Expert: Danielle Loughran
Contact: www.accell-us.com
Bio: Danielle Loughran is a CPA with over nine years of public and private accounting experience at Arthur Anderson and Ernst & Young and is currently the director of assurance at Accell.
Filmmaker: Christopher Rokosz
Duration : 0:1:26
Minister of Finance, Jim Flaherty said “No,” point blank to a question from a CBC National viewer regarding whether or not the federal Tories would ever consider making mortgage interest tax deductible. He also spoke of the new savings plan that allows Canadians to put away $5,000 tax free towards the purchase of a new house (or car or vacation or … whatever), this is different than the RRSP allowance that must be paid back.
Duration : 0:2:23
Learn What Causes Changes in mortgage interest Rates?
Whether you are a mortgage loan originator, a real estate agent or even just someone interested in purchasing a home or refinancing an existing loan, this short video will help you better understand the market forces that really affect home loan rates. Take just a few minutes to broaden your knowledge of:
- The connection between interest rates and mortgage backed securities,
- What smart loan originators are monitoring to stay in front of price changes-and why it’s not the media!
- How the Fed works-and what they are doing to keep rates low
Duration : 0:7:4
The mortgage interest rate is a constantly fluctuating rate the is based on a benchmark set up by the U.S. Treasury on prevailing interest rates. Keeping up with current interest rates is difficult because of the constant change but the process can be figured out easier with tips from a registered financial consultant in this free video on finance and investment.
Expert: Patrick Munro
Contact: www.northstarnavigator.com
Bio: Patrick Munro is a registered financial consultant (RFC) with outstanding sales volume of progressive financial products and solutions to the senior and boomer marketplace.
Filmmaker: Reel Media LLC
Duration : 0:1:4
President Obama plans to cut tax deductions for mortgage interest and charity funds.
Duration : 0:3:50
Compare bank mortgage interest rates by searching the Internet for Web sites that compare rates, contacting different banks for full disclosure information and using the variables of a mortgage interest rate to pick the best choice. Use the Internet as a guide for picking a good mortgage interest rate with help from a financial consultant in this free video on investments.
Expert: Roger Groh
Bio: Roger Groh is the founder of Groh Asset Management.
Filmmaker: Bing Hu
Duration : 0:2:48
Follow the adventures of Bob and Sally as they learn about mortgages and interest