What You Need to Know about Cancellation of Mortgage Debt

By Linda Goold RISMEDIA, Monday, March 12, 2012— This column is brought to you by the NAR Real Estate Services group

Summary: The mortgage company holding your note can cancel the remainder of your debt in the event of foreclosure. The lender reserves the right to sue the note holder for the difference owed from what is due and what the house sold for in foreclosure.

My opinion: If you even think you might lose your house because you're falling behind on payments and the future looks bleak, immediately contact a Realtor to initiate a "short sale." A short sale takes about 4-6 months, but when complete, absolves the borrower from the remaining debt and future litigation. If you do initiate a short sale, don't be distracted by time consuming paper work, like the HAFA program or BoA industry programs. While these programs are fantastic because they provide up to $3K in closing cost or moving assistance, don't lose sight of the big picture. The goal is to sell the house and be absolved from tens of thousands of dollars of debt, not qualify for a potential $3K in assistance.

Key Quotes:
The general tax rule that applies to any debt forgiveness is that the amount forgiven is treated as taxable income to the borrower. Some exceptions to this rule are available, but, until recently, the borrower was required to pay tax on the debt forgiven. A new law enacted in December 2007 provides relief to troubled borrowers when some portion of mortgage debt is forgiven. However, this relief expires on December 31, 2012 and NAR will be working to obtain an extension throughout the year.

Read the full article to obtain all the info you need about this law and the cancellation of mortgage debt at: What You Need to Know about Cancellation of Mortgage Debt

A. Joseph Marshall
Coldwell Banker Commercial
Commercial Real Estate Advisor
Savannah, Ga

Growth in Commercial Real Estate Markets Expected in 2012

press release

WASHINGTON, DC, Nov 28, 2011 (MARKETWIRE via COMTEX) 

Summary: Commercial real estate growth was flat in 2011, but economic growth and more jobs signal a stronger 2012.

Key Quotes:

Lawrence Yun, NAR chief economist, said there is little change in most of the commercial market sectors. "Vacancy rates are flat, leasing is soft and concessions continue to make it a tenant's market," he said. "However, with modest economic growth and job creation, the fundamentals for commercial real estate should gradually improve in the coming year."

The commercial real estate market is expected to follow the general economy. "Vacancy rates are expected to trend lower and rents should rise modestly next year. In the multifamily market, which already has the tightest vacancy rates in any commercial sector, apartment rents will be rising at faster rates in most of the country next year. If new multifamily construction doesn't ramp up, rent growth could potentially approach 7 percent over the next two years," Yun said.

Vacancy rates in the office sector are expected to fall from 16.7 percent in the current quarter to 16.1 percent in the fourth quarter of 2012.

Industrial vacancy rates are projected to decline from 12.3 percent in the fourth quarter of this year to 11.7 percent in the fourth quarter of 2012.

Retail vacancy rates are likely to decline from 12.6 percent in the current quarter to 11.8 percent in the fourth quarter of 2012.

The apartment rental market -- multifamily housing -- is expected to see vacancy rates drop from 5.0 percent in the fourth quarter to 4.3 percent in the fourth quarter of 2012; multifamily vacancy rates below 5 percent generally are considered a landlord's market with demand justifying higher rents.

The full article can be read at Growth in Commercial Real Estate Markets Expected in 2012.

A. Joseph Marshall
Coldwell Banker Commercial
Commercial Real Estate Advisor
Savannah, Ga

Big properties' recovery to be weak, except for multi-family sector

Commercial landlords will see falling vacancies and rising rents over the next two years, but the recovery will be mild in all but the apartment sector, according to the National Association of Realtors U.S. commercial real estate forecast.

The forecast was during NAR’s conference in Anaheim.

NAR Chief Economist Lawrence Yun based his forecast on projections that the U.S. economy will avoid recession and add 3 million to 4 million jobs in the next two years.

Read the full article at "Realtors" Big Properties' Recovery to Be Weak" written by Jeff Collins with the OC Register.

A. Joseph Marshall
Coldwell Banker Commercial
Commercial Real Estate Advisor
Savannah, Ga.

You Did It! Congress Restores FHA Loan Limits

YOU DID IT! Last night Congress restored the loan limits for the Federal Housing Administration (FHA) for two years. As you know, in late September the FHA, Fannie Mae; and Freddie Mac loan limits were reduced in 42 states pricing potential home buyers out of the American Dream of home ownership and holding back the housing recovery. NAR immediately went to work with the goal to get the loan limits restored in Congress. For weeks that goal seemed unlikely. You, and countless other REALTORS® like you along with YOUR leadership and YOUR management team worked to educate Congress that well-qualified buyers didn't need yet another hurdle to access affordable mortgage financing. They finally listened. Because we were persistent. And because we were right. The reinstated FHA loan limit formula and cap change will help make mortgages more affordable and accessible for hard-working, middle-class families in 669 counties in 42 states and territories, where the average loan limit reduction after the reset last month was more than $68,000. The provision reinstates the FHA loan limits through 2013 at 125 percent of local area median home prices, up to a maximum of $729,750 in the highest cost markets, the floor will remain at $271,050. However, Congress chose not to apply the loan limits restoration to Fannie Mae and Freddie Mac. Fannie-and-Freddie-backed mortgages will remain at 115 percent of local area median home prices up to $625,500. The bill also provides for a short-term extension of the National Flood Insurance Program through December 16, 2011. NAR will continue to press Congress to use the additional time to complete their work on a five-year reauthorization of the program, which ensures access to affordable flood insurance for millions of home and business owners across the country. I know that when we work together we can accomplish anything we set our minds to in order to preserve, protect and defend the American Dream of Home Ownership. Because of your excellent work, I am continually reminded that “REALTORS® are the Heart of the Deal.” With much appreciation, Moe Veissi 2012 President NATIONAL ASSOCIATION OF REALTORS®