Mortgage Interest Deductions
We have heard rumors that the Obama administration has discussed the possibility of getting rid of the Mortgage Interest Deduction (MID). “Say it ain’t so, Joe”.
According to the USA Today, the government spent about $80 billion last year to back up the mortgage interest deductions. One housing specialist says it wasn’t worth the money because the tax break only goes to the wealthy???? Does this sound familiar?
Home owners already pay 80 to 90 percent of the income tax in our country, and among those who claim the MID, almost two-thirds are middle-income earners.
The national taxpayers union tells us nearly 39 million people claimed the mortgage deduction. (Nearly 67% of Americans own homes).
For those in the $100,000 – $200,000 income range the MID claimed was almost $14,000; meaning the value of the write-off would be $3,500
For those making $75,000 – $100,000, the deduction was around $11,000; resulting in a savings of $2,800
For those making $50,000 – $75,000, the average deductions was around $10,000 with a savings of $2,500.00
Through the terms of 17 presidencies, the MID has brought remarkable stability to the housing market.
1/3 of Americans OK with Strategic Defaults
With the current state of our economy and housing market, many homeowners are still underwater and the stigma attached to foreclosure is steadily eroding as delinquencies are all too common forcing homeowners into strategic defaults.
A survey by the Pew Research Center found that 36% of Americans believe that it is ok to walk away from their mortgage (short sale or foreclosure) under certain circumstances.
They also found that 59% of Americans state that it is wrong to stop making their mortgage payments and return their homes to their lender, 19% feel it’s acceptable and 17% stated it depended on the circumstances.
This survey was close to the same results from CoreLogic which finds that 11,000,000 borrowers or 23% are underwater.
5 Tips for Fall Lawn, Tree and Shrub Care to Prep for Spring
With fall around the corner, it’s time to start thinking about preparing your lawn for the winter months. According to TruGreen, here are five tips for homeowners to prepare their lawns for spring’s growth.
ASSESS
Inspect your lawn, trees and shrubs. Identify problem areas in need of pruning, replacement or treatment. Note area where grass has thinned out or is in need of nutrients which appears as light green. Also look for pest and weed infestation and overgrown shrubs and trees
AERATE & PRUNE
Help your lawn breathe through fall core aeration to strengthen roots and prepare for spring. Conduct corrective pruning of trees and shrubs to enhance plant appearance and thin rather than top-shear overgrown shrubs and flowering trees to preserve their shape.
REPLACE
Fall is the ideal time for successful seeding of bare lawn areas and over seeding of healthy grass to improve lawn thickness and density. Replace dead or floundering plants in fall for a healthier landscape and improved curb appeal in spring.
MOW & MULCH
Mow your lawn into the fall and avoid removing more than one-third of the leaf blades with each cut. Return grass clippings and back to the sol for added lawn nutrients and use tree leaf compost to nourish plants.
FEED
Feeding your lawn gives grass roots, trees and shrubs the energy needed to prepare for a healthy spring revival. Keep fertilizer on target to prevent run-off and seep fertilizer granules that may reach pavement back onto your lawn.
Distressed Options for Homeowners in California
If you have found yourself falling behind in your mortgage and debt obligations, you aren’t alone. With the loss of jobs and declining home values and the current economy, homeowners like you are forced to consider options that were unthinkable a few years ago.
The US Department of Housing and Urban Development (HUD) has established a hotline to assist homeowners who are facing a hardship. You can contact HUD at their toll free number 1-877-483-1515 to find out what options are available to you:
2) Short Sale
3) Foreclosure
To learn more about the tax consequences of a short sale versus a foreclosure, you can visit the IRS web site at www.irs.gov. Before executing any of these options, consult with a certified public accountant or tax attorney.
Governor Schwarzenegger has instituted a statewide, 90-day halt on foreclosure proceedings for each owner-occupied home subject to a first mortgage on which a Notice of Default has already been file.
Dim Forecast for Housing and Economy
ResiLandscape report, issued by analysts at Moody’s Investors Service warn that there’s a change the country will slide back into a recession, and they forecast a “longer and deeper housing correction.”
The chief economist for Moody’s Analytics said “We have lowered the near-term economic outlook and raised the risk of a double-dip recession from one in four to one in three.”
He also says the US recovery has lost significant momentum since the spring. Retailing, housing, business investment, and industrial activity have all weakened, and the job market is no longer improving. After ticking higher to 9.6% in August, he is expecting the nation’s unemployment rate to drift back into double digits in the coming months.
Celia Chen, senior director for Moody’s Analytics expects house prices to fall until the 3rd quarter of 2011, significantly longer than Moody’s previous projections of a 1st quarter 2011 bottom in homes. She says the flood of 4 million homes either in late-stage delinquency or foreclosure is clogging the foreclosure pipeline from the servicers to the courtrooms, creating delays.
Distortions due to the first time homebuyer tax credits previously offered are partially to blame for the expected double-dip.
