In a previous post, I discussed the The Mortgage Forgiveness Debt Relief Act of 2007. Now the House of Representatives have passed the bill:
“Financial relief for homeowners facing foreclosure or in bankruptcy advanced in the House Thursday as lawmakers approved legislation to help financially strapped homeowners by a 386-to-27 vote.”
“The bill revises the bankruptcy code to help homeowners facing default and foreclosure, biting into already hard-hit profits at mortgage lenders. The House also approved reducing taxes of some strapped homeowners by $650 million while eliminating a tax break that had been available on the sale of second homes.”
“The tax break would be available to homeowners who have mortgage debt forgiven as part of a foreclosure or a reworking of a loan. The value of that forgiveness, which is now taxable as income, would become tax exempt.”
The Miami Herald reports on some good news; law enforcement is finally starting to crack down on mortgage fraud:
“In the first roundup of suspects under a new campaign to crack down on home loan fraud in Miami-Dade County, 11 people -- brokers, borrowers, sellers and title agents -- were arrested in three separate mortgage fraud schemes, police announced Friday.”
“Miami-Dade Mayor Carlos Alvarez said the suspects used stolen identities, falsified mortgage documents and fraudulent appraisals to get loans valued at close to $2 million for properties throughout the county.”
“‘In the coming months, you will see more fraudulent mortgage brokers, title agents, attorney's appraisers, and others bought to justice,’ Alvarez said at a press conference announcing the arrests.
“The roundup comes a week after federal prosecutors charged 18 people with taking out fraudulent home loans worth more than $50 million to buy luxury condos on South Beach and homes in Broward County.”
Donald Trump has put his plans for a Las Olas condo hotel on hold. The Miami Herald reports:
“Condo-hotel projects once were so hot in South Florida that Donald Trump planned two in Fort Lauderdale. Now he's back down to one amid cooling enthusiasm for the novel real estate product behind much of South Florida's recent hotel boom.”
“The celebrity developer expressed confidence in the Trump International Hotel and Tower under construction on the northern end of Fort Lauderdale Beach. But his partners are worried enough about condominium sales, he said, that they've suspended plans for the Trump Las Olas Resort to the south.”
“‘They want to wait until the market comes back. And I agree with them,’ Trump said. ‘At this moment, to build in this market would be foolish.’”
The Sun-Sentinel reports on efforts by state legislators to pass a new budget:
“The state House and Senate on Friday approved nearly identical budget-cutting plans that eliminate about $1.1 billion in programs from the state's $71 billion annual budget.”
“In both chambers, most Democrats voted nay, insisting the Legislature should plug the state's budget gap by drawing on state reserves or abolishing some tax breaks for special interests.”
“Both House and Senate have agreed to slash public school spending by about $100 per student. University and community college students will face a 5 percent tuition increase in January.”
“The cutbacks are being forced by Florida's slumping economy and housing market, which have resulted in declining revenues, especially from the sales tax and real estate transaction taxes.”
In national news, the Miami Herald explains how consumers are reacting now that they can no longer use their homes as ATMs:
“Consumers have boosted their borrowing at the fastest pace in three months, turning increasingly to their credit cards to replace home equity loans as a source of ready cash.”
“The Federal Reserve reported that consumer credit rose at an annual rate of 5.9 percent in August, the biggest increase since a 7.9 percent jump in May.”
“During the housing boom, when home sales were hitting records for five consecutive years and prices were soaring, many homeowners tapped the rising value of their homes to finance increased spending by taking out home equity lines of credit.”
“However, now that home sales are plunging and double-digit increases in housing costs are a thing of the past, home equity lines of credit have become less available. That has pushed consumers back to credit cards to finance their spending.”
Bloomberg.com reports on the discounts being offered by homebuilders:
“During Hovnanian's ‘Deal of the Century’ promotion last month, the company sold a 2,900-square foot five-bedroom, three- bathroom house at the Greenwood Manor development in Royal Palm Beach, Florida, for $525,000, said Kathy Bell, who bought a house with the same floor plan down the street for $575,000 in March 2006.”
“‘It really stinks,’ said Bell, 50, a medical billing specialist. ‘We were here in the beginning and we didn't get any deals. It's very upsetting.’”
“Construction costs alone for a house that size would be about $435,000, according to the Florida Home Builders Association. That doesn't include the cost of land, or preparing the lot.”
“Hovnanian's Web site said that model was available ‘starting from $530,000s.’ Hovnanian spokesman Jeff O'Keefe said the company offered discounts as high as 30 percent. O'Keefe said he wouldn't comment on the prices paid for properties sold during the promotion, which ran from Sept. 14 to Sept. 16. Chief Executive Officer Ara Hovnanian had said the company sold 2,100 homes in the three days, more than double expectations.”
CNNMoney.com reports that Hollywood-based homebuilder Tousa has withdrawn future earnings guidance:
“TOUSA, Inc. (NYSE:TOA) announced today that it has withdrawn all guidance related to 2007 and 2008 due to worsening market conditions impacting the new home industry.”
“‘Conditions in all of our markets weakened more than we anticipated due to a number of factors including: recent severe liquidity challenges in the credit and mortgage markets, diminished consumer confidence, increased home inventories and foreclosures, and downward pressure on home prices. All of these factors have contributed to lower gross sales and higher cancellation rates,’ said Antonio B. Mon, President and Chief Executive Officer of TOUSA. ‘We remain focused on executing our asset management initiatives, generating cash, paying down debt, and evaluating all opportunities to de-lever the balance sheet to correctly position TOUSA for the current challenging housing market.’”
“The Company does not anticipate providing further guidance in the near future.”
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4 comments:
It's good to see that they're starting to crack down on some of the mortgage fraud stuff.
I have a feeling that there is going to be MUCH more of this as time goes by.
I would guess than a quarter of the F@cked Buyers on this site are actually some type of mortgage fraud.
I'm glad that bill passed the house. Where does it go from here? I kinow a few people who could really benefit from this one.
WOW - its getting bad guys. Crime is up, construction workers out of work, ect. Then the people who used their homes as a atm are now turning to credit cards. When are people going to learn that not all of us can afford everything. I have always paid cash for small stuff. credit is for homes that you can afford, cars that you can afford and a jam - like your child in the hospital.
80% of the buyers would never have recieved a loan in the old days of putting 10 to 20% of your own money down and really make how much they say they do. The Point is most of them are Loosers and always will be...
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