Pueblo Colorado Real Estate

Third quarter numbers showed 10.7 million properties were in negative equity, or 22.1 percent.

2012-03-02T13:53:00.002-08:00

The number of homes with negative equity, also known as underwater homes, went up for the 2011 fourth quarter to 11.1 million, or 22.8 percent, CoreLogic revealed in a release today.

Third quarter numbers showed 10.7 million properties were in negative equity, or 22.1 percent.

Borrowers with less than 5 percent equity in their homes, also known as near-negative equity, stood at 2.5 million for the fourth quarter. In total, those with negative equity and near-negative equity equaled 27.8 percent of all residential properties.

This figure was also up from the third quarter, when negative and near-negative equity had a combined totaled of 27.1 percent.

Nationally, the total mortgage debt outstanding on underwater properties stood at $2.8 trillion in the fourth quarter, compared to $2.7 trillion in the previous quarter.

“Due to the seasonal declines in home prices and slowing foreclosure pipeline which is depressing home prices, the negative equity share rose in late 2011,” said Mark Fleming,

chief economist with CoreLogic. “The negative equity share is back to the same level as Q3 2009, which is when we began reporting negative equity using this methodology.”

Fleming further explained that the high level of negative equity coupled with the inability to pay is the “double trigger” of default, but with the economic recovery, there should be a reduction in the “inability to pay trigger.”

The states with the highest level of negative equity were Nevada (61 percent), Arizona (48 percent), Florida (44 percent), Michigan (35 percent) and Georgia (33 percent). These five states had a combined average 44.3 percent of the share of negative equity, whereas the remaining states have a combined average negative equity share of 15.3 percent.

Out of the 11.1 million borrowers with underwater mortgages, 6.7 million had first liens with negative equity, and the remaining 4.4 million had first and second liens.

The average mortgage balance for the first lien borrowers was $219,000, with an underwater average of $51,000, and a loan-to-value ratio of 130 percent. Those who were upside down with first and second liens had an average mortgage balance of $306,000, were upside down by about $84,000, and had an LTV of 138 percent.

Nearly 18 million borrowers had an LTV between 80 percent and 125, making them eligible for HARP 1.0. With the implementation of HARP 2.0 in December 2011, the 125 percent cap was removed, widening eligibility for refinancing under the government program to 22 million borrowers based on LTV alone.

CoreLogic included 48 million properties with a mortgage, which accounts for over 85 percent of all mortgages in the U.S., when putting together the report.

Avoid losing homes to foreclosure

2012-03-02T13:51:00.002-08:00

To avoid losing homes to foreclosure due to long response times for short sale transactions, three senators introduced legislation to speed up the short sale process.

Senators Lisa Murkowski (R-Alaska), Scott Brown (R-Massachusetts), and Sherrod Brown (D-Ohio) proposed the bill addressing the issue of short sales timelines on February 17. A short sale is a real estate transaction where the homeowner sells the property for less than the unpaid balance with the lender’s approval.

“There are neighborhoods across the country full of empty homes and underwater owners that have legitimate offers, but unresponsive banks,” said Murkowski. “What we have here is a failure to communicate. Why don’t we make it easier for Americans trying to participate in the housing market, regardless of whether the answer is ‘yes,’ ‘no’ or ‘maybe?’”

The legislation, also known as the Prompt Notification of Short Sale Act, will require a written response from a lender no later than 75 days after receipt of the written request from the buyer.

The lender’s response to the buyer must specify acceptance, rejection, a counter offer, need for extension, and an estimation for when a decision will be reached. The servicer

will be limited to one extension of no more than 21 days.

The bill will also allow the buyer to be awarded $1000, plus “reasonable” attorney fees if the Act is violated.

According to a release from Short Sale New England, short sale homes do not bring down neighboring home values like foreclosed homes do, and 83 percent of short sale buyers are satisfied with their purchase, according to a 2012 Home Ownership Satisfaction Survey conducted by HomeGain.

“The current short sale process can be time consuming and inefficient, and many would-be buyers end up walking away from a sale that could have saved a homeowner from foreclosure,” said Moe Veissi, president of the National Association of Realtors. “As the leading advocate for homeownership, realtors are supportive of any effort to improve the process for approving short sales.”

Equi-Trax released a survey last year on the issues real estate agents face when completing short sales. Guy Taylor, CEO at Equi-Trax, said 71.9 percent of respondents reported that a short sale can take four to nine months to complete, and they think that is simply too long.”

The survey also found that 18.2 percent of deals require less than three months to complete, with 10 percent requiring more than 10 months.

When agents in the survey were asked to how the short sale process can be improved, 57.6 percent said lenders should take less time to close transactions, 14 percent said borrowers should be better educated about short sales, and 40.4 percent said both of these changes are necessary to improve the process.

In April 2011, a similar bill was introduced by Reps. Tom Rooney (R-Florida) and Robert Andrews (D-New Jersey), but this version requested a response deadline of 45 days instead of 75 from lenders. The legislation never came up for debate before a House committee.

The housing crisis to end this year!!

2012-03-02T13:49:00.000-08:00

Capital Economics expects the housing crisis to end this year, according to a report released Tuesday. One of the reasons: loosening credit.

The analytics firm notes the average credit score required to attain a mortgage loan is 700. While this is higher than scores required prior to the crisis, it is constant with requirements one year ago.

Additionally, a Fed Senior Loan Officer Survey found credit requirements in the fourth quarter were consistent with the past three quarters.

However, other market indicators point not just to a stabilization of mortgage lending standards, but also a loosening of credit availability.

Banks are now lending amounts up to 3.5 times borrower earnings. This is up from a low during the crisis of 3.2 times borrower earnings.

Banks are also loosening loan-to-value ratios (LTV), which Capital Economics denotes “the clearest sign yet of an improvement in mortgage credit conditions.”

In contrast to a low of 74 percent reached in mid-2010, banks are now lending at 82 percent LTV.

While credit conditions may have loosened slightly, some potential homebuyers are still struggling with credit requirements. In fact, Capital Economics points out that in November 8 percent of contract cancellations were the result of a potential buyer not qualifying for a loan.

Additionally, Capital Economics says “any improvement in credit conditions won’t be significant enough to generate actual house price gains,” and potential ramifications from the euro-zone pose a threat to future credit availability.

Beginning January 1, 2013, a new 3.8 percent tax on some investment income

2012-02-15T14:34:00.000-08:00

Beginning January 1, 2013, a new 3.8 percent tax on some investment income
will take eff ect. Since this new tax will aff ect some real estate transactions, it is important for REALTORS® to clearly understand the tax and how it could impact your clients. It’s a complicated tax, so you won’t be able to predict how it will affect every buyer or seller.
To get you up to speed about this new tax legislation, the NATIONAL
ASSOCIATION OF REALTORS® has developed this informational brochure.
On the following pages, you’ll read examples of diff erent scenarios in which this new tax — passed by Congress in 2010 with the intent of generating an estimated $210 billion to help fund President Barack Obama’s health care and Medicare overhaul plans — could be relevant to your clients.
Understand that this tax WILL NOT be imposed on all real estate transactions, a common misconception. Rather, when the legislation becomes eff ective in 2013, it may impose a 3.8% tax on some (but not all) income from interest, dividends, rents (less expenses) and capital gains (less capital losses). Th e tax will fall only on individuals with an adjusted gross income (AGI) above $200,000 and couples filing a joint return with more than $250,000 AGI.

Example 1

Applies to: Individuals with adjusted gross income (AGI) above $200,000
Couples filing a joint return with more than $250,000 AGI
Types of Income: Interest, dividends, rents (less expenses), capital gains
(less capital losses)
Formula: Th e new tax applies to the LESSER of Investment income amount
Excess of AGI over the $200,000 or $250,000 amount
Capital Gain: Sale of a Principal Residence John and Mary sold their principal residence and realized a gain of $525,000.
They have $325,000 Adjusted Gross Income (before adding taxable gain).
The tax applies as follows:
AGI Before Taxable Gain $325,000
Gain on Sale of Residence $525,000
Taxable Gain (Added to AGI) $25,000 ($525,000 – $500,000)
New AGI $350,000 ($325,000 + $25,000 taxable gain)
Excess of AGI over $250,000 $100,000 ($350,000 – $250,000)
Lesser Amount (Taxable) $25,000 (Taxable gain)
Tax Due $950 ($25,000 x 0.038)

Example 2

Rental Income: Income Sources Including Real Estate Investment Income
Hank has a “day job” from which he earns $85,000 a year. He owns several small apartment units and receives gross rents of $130,000. He also has expenses related to that income.
The tax applies as follows:
AGI Before Rents $85,000
Gross Rents $130,000
Expenses (Including depreciation and debt service) $110,000
Net Rents $20,000
New AGI $105,000 ($85,000 + net rents)
Excess of AGI over $200,000 $0
Lesser Amount (Taxable) $0
Tax Due $0

Example 3

Rental Income: Rental Income as Sole Source of Earnings – Real Estate Trade or Business Henrietta’s sole livelihood is derived from owning and operating commercial buildings. Thus, these assets are treated as business property and not as investment property. Her income stream is outlined below.
The tax applies as follows:
Gross Rents $750,000
Expenses (Including depreciation and debt service) $520,000
Net Rents $230,000
New AGI (Net rental income) $230,000
Excess of AGI over $200,000 $30,000
Lesser Amount (Taxable) $0 (No investment income)
Tax Due $0

Example 4

Henrietta’s rental income is from a trade or business so it is NOT treated as investment income. Thus, she is NOT subject to the 3.8% investment income tax.

Sale of a Second Home with No Rental Use (or no more than 14 days rental)
The Bridgers own a vacation home that they purchased for $275,000. Th ey have never rented it to others.
They sell it for $335,000. In the year of sale they also have earned income from other sources of $225,000.
The tax applies as follows:
Gain on Sale of Vacation Home $60,000 ($335,000 – $275,000)
Income from Other Sources $225,000
New AGI $285,000 ($60,000 + $225,000)
Excess of AGI over $250,000 $35,000 ($285,000 – $250,000)
Capital Gain $60,000
Lesser Amount (Taxable) $35,000 (AGI excess)
Tax Due $1,330 ($35,000 x 0.038)

Example 5

Sale of an Inherited Investment Property (Residential or Commercial)
In 2010, Ethan inherited a four-plex investment property from his great aunt. She had used it for many years as an investment rental property in San Francisco. At the time of her death, the adjusted basis of the property was $10,000. During her period of ownership, she had taken $240,000 of
depreciation deductions on it. Its fair market value was $900,000 when she died. Because there was no estate tax for 2010 and because carryover basis was in eff ect, Ethan’s basis in the inherited property is also $10,000. The prior depreciation allowances carry over to him, as well. He continues to use the property as an investment rental property.
Ethan later sells the property for $1.2 million. He is single and reports Schedule C self-employment income of $180,000.

The tax applies as follows:
Gain on Sale $1,190,000 ($1.2 million – $10,000)
Depreciation Recapture $240,000 (From great aunt)
Depreciation Recapture $2,200 (Ethan — approximate)
Total Gain $1,432,200 ($1.19 million + total depreciation recapture)
Schedule C Income $180,000
New AGI $1,612,200 (Gain + Schedule C)
Excess over $200,000 $1,412,200
Lesser Amount (Taxable) $1,412,200 (AGI excess)
Tax Due $53,664 ($1,412,200 x 0.038)

Example 6

Purchase and Sale of Investment Property (Residential or Commercial)
Ethan has purchased an investment property for $900,000. During his period of ownership, he takes $230,000 in depreciation deductions. He has also made some improvements to the property. At the time of sale, his adjusted basis in the property is $760,000. He subsequently sells the property for $1.2 million.
In the year of sale, he is single and reports self-employment income of $315,000.

The tax applies as follows:
Gain on Sale $440,000 ($1.2 million less adjusted basis of $760,000)
Depreciation Recapture $230,000
Total Gain $670,000 (Gain on sale plus depreciation recapture)
Schedule C Income $315,000
New AGI $985,000 ($315,000 + $670,000)
Excess AGI over $200,000 $785,000 ($985,000 – $200,000)
Lesser Amount (Taxable) $670,000 (Capital gain)
Tax Due $25,460 ($670,000 x 0.038)

This new tax was never introduced, discussed or reviewed until just hours before the final debate on the massive health care legislation began. Th at legislation was enacted on March 23, 2010, more than a year after the health care debate began. Th is new tax was put forward after Congress was unable to agree on changes to current law that were suffi cient to pay for the proposed changes to the Medicare program and increased subsidies to individuals and businesses.
The new tax raises more than $210 billion (over 10 years), representing more than half of the total new expenditures in the health care reform package. NAR expressed its strongest possible objections, but the
legislation passed on a largely party line vote.
Th e new tax is sometimes called a “Medicare tax” because the proceeds from it are to be dedicated to the Medicare Trust Fund. Th at Fund will run dry in only a few more years, so this tax is a means of extending its life.
A second new tax, also dedicated to Medicare funding, is imposed on the so-called “earned” income of higher income individuals. Th is earned income tax has a much lower rate of 0.9% (0.009). Like the tax described in this brochure, this additional or alternative tax is based on adjusted gross income thresholds of $200,000 for an individual and $250,000 on a joint return. Like the 3.8% tax, this 0.9% tax is imposed only on the excess of earned income above the threshold amounts. An example and some analysis of this tax is presented in Example 5 of this brochure. Another way of thinking about these new taxes is to think of the 3.8% tax as being imposed on a portion of the money that you make on your money — your capital (sometimes referred to as “unearned income”).
The 0.9% tax is imposed on a portion of the money you make on your labor — your salary, wages, commission and similar income related to earning a livelihood.

3.8% Tax is Not Tax on Real Estate

2012-02-15T14:07:00.001-08:00

3.8% Tax is Not Tax on Real Estate. Tax time is nearing and once more rumors are circulating on the Internet and by e-mail that the health care reform law enacted two years ago includes a 3.8 percent transfer tax on real estate starting in 2013. That rumor is not true and NAR has material available to you to explain how that 3.8 percent tax works. It’s a tax on a very narrow band of investment income for high-wealth households (those who earn $250,000 in a joint return or $200,000 as an individual) that could come into play on the sale of a house if the sales gain is more than $500,000 for a married couple or $250,000 for an individual. Even in the unlikely event the sales gain is more than that amount, the tax would only apply based on other considerations having to with the household’s income and tax situation. The bottom line is, the tax, which was imposed to help shore up Medicare, will only hit some portion of investment income.
http://enews.realtor.org/a/hBPPBzTB8fW5BB8f7wiAAAZE4QK/ae10

Realty Times - Why You Want a Guaranteed Title

2012-02-12T19:49:00.000-08:00

Realty Times - Why You Want a Guaranteed Title

Realty Times - Know Your Expenses Before You Buy

2012-02-12T19:42:00.000-08:00

Realty Times - Know Your Expenses Before You Buy

Banks pay delinquent borrowers $35,000 to sell their homes

2012-02-12T19:38:00.000-08:00

Banks pay delinquent borrowers $35,000 to sell their homes

Realty Times - Kitchens Sell a House

2012-01-25T20:13:00.000-08:00

Realty Times - Kitchens Sell a House

Realty Times - Why Buy a Home?

2012-01-25T20:11:00.000-08:00

Realty Times - Why Buy a Home?

5 Reasons Why Income Properties Are Better Than Stocks

2012-01-20T10:26:00.000-08:00

1. Income Properties Are Controllable and Manageable

One of the best things about income properties is the fact that you are in control of your success. With the stock market, you are forever at the mercy of its well known fluctuations. The risk in the stock market is, and always will be, higher than it is in the income property market.If you need to be in control of the outcome, if you need to be in direct involvement with your investments, then income properties far outweigh any benefits that the stock market can provide.

Some people in the property market have decided to hire people called property managers. These people can handle the Lion's share of the workload involved with managing the property. This leaves the actual landlord free to purse more lucrative business ventures.

2. Income Properties Are Nearly Guaranteed Income

Income properties are wonderful for this. They are one of the most secure ways to invest your money, providing you perform your job as a property owner well. There is a lot that can go wrong with properties and that's why you have to have a trained eye for which properties are worth fixing up and which to leave behind. For example, it wouldn't be any form of a guaranteed income if no one is willing to rent your new house in the bad neighborhood. That's just an example, but if you're looking into the housing market then you should gain all the knowledge about the business that you can. This will circumvent a lot of difficulties.

3. Income Properties Nearly Guarantee Leverage

One thing many people with income properties do is use leverage to their advantage. As soon as a property owner makes a property worth enough, they use the appreciation of the home to purchase even more homes. In this way it becomes a sort of dynasty for the property owner. Let's take a look at an example. Let's say a property owner put the minimum down on a house that's worth $150,000. At a 7% rate of appreciation per year, in five years the house will be worth $202,500. The property owner sells the house for an amount of $202,500, making for a total profit of $52,500. Then, the property owner pays for the home and takes the $52,500 profit to buy another $50,000 home. Property owners simply put the minimum down on a home, fix it up, and then let the profits accrue. This is just one example of leverage with income properties that you can't do with the stock market.

4. Income Properties Have A Lot Less Taxes Than Stock Market Investments

Not only that, but some states have lower taxes than others. Wyoming has the lowest property tax rates in the United States. On the opposite side of this coin, however, is something you should be on the lookout for. While it may seem like a good deal to seek some property in Wyoming, the appreciation rates on the homes are very low. This means that you won't get such a positive return on your investment over the years. However, in the grand scheme of things, when compared to taxes on stock market profits, income properties have much lower taxes. Finding the right combination of appreciation value and low tax rates will mean bigger profits.

5. Income Properties Are Less Volatile Than Stocks

Switching gears for a second, the stock market is a very volatile place. The value of stocks can soar and plummet with the flick of a switch. In the income property market, you don't have to deal with this uncertainty. The value of your income property will actually appreciate, not just go up and down according to the market conditions like stocks do. Volatility in finance is simply a measure of how the value of a financial investment varies over time. Income properties are less volatile than stocks.

Foreclosure filings in Pueblo County

2012-01-04T15:53:00.001-08:00

Foreclosure
Foreclosure filings in Pueblo County:

2005 - 1,032

2006 - 1,174

2007 - 1,511

2008 - 1,311

2009 - 1,569

2010 - 1,382

2011 - 1,267

Source: Pueblo County Public Trustee

Foreclosure filings edged lower for a second year in Pueblo County.

2012-01-04T15:52:00.000-08:00

By DENNIS DARROW | THE PUEBLO CHIEFTAIN |

Foreclosure filings edged lower for a second year in Pueblo County.

The trend adds to optimism that last year could mark the bottom of a five-year housing slump, although industry observers caution that a full recovery appears far off in the distance.

Pueblo is adding few jobs and its jobless rate (9.6 percent as of November) is the highest among Colorado's larger cities, according to the state Department of Labor.

Last year, local home building slowed to a near standstill, according to preliminary Pueblo Regional Building Department data.

The 114 single-family home permits issued were the fewest of the recession and nearly matched the county's historic low of 110 permits in 1983 during another crippling recession.

Existing home sales also were weak for another year, although several months saw an uptick, the Pueblo Association of Realtors said. The group's year-end report is set for release later this month.

Foreclosure filings totaled 1,267, down 9 percent from the prior year and the fewest since before the housing bubble burst, according to Pueblo County Public Trustee Nick Gradisar.

Gradisar called the second straight year of decline "a good trend."

However, he cautioned some of last year's drop likely stemmed from a two-month timeout taken by many large mortgage companies in order to "get their paperwork straightened out."

Meanwhile, the local housing market also remains dogged by a large number of homes that remain in the foreclosure process or are now bank-owned and slow to go back on the market, he said.

"I think there's a pretty large inventory of bank-owned properties out there," Gradisar said.

All in all, Gradisar said he's hopeful the worst is behind the community. "I think it's a positive thing. I don't think it's coming around as fast as people would like but it's starting to," he said.

Pueblo's housing slump began in late 2006.

Home buying began drying up at the onset of the subprime mortgage meltdown that hit the nation's fastest-growing communities. The slump deepened during the U.S. recession.

Hardest hit locally has been Pueblo West, which went from building 600 homes a year to less than 100 in each of the last two years, including less than 50 new homes last year.

AddThis - AddThis for Internet Explorer – Welcome

2012-01-03T17:58:00.000-08:00

AddThis - AddThis for Internet Explorer – Welcome

Realty Times - Pueblo, Colorado Real Estate Market Conditions

2012-01-03T17:48:00.000-08:00

Realty Times - Pueblo, Colorado Real Estate Market Conditions

Short Sale

2011-12-22T15:34:00.001-08:00

Why Assist-2-Sell?

2011-12-22T15:26:00.000-08:00