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March 2011 Archives

New Homebuyers May Want To Consider Job-loss Mortgage Insurance

The Boston Herald reported that a number of homebuilders and even some of the country's largest mortgage lenders and banks are currently offering new homebuyers unemployment insurance programs that cover their mortgage payments for up to six months in the event they lose their jobs during the first one-year to two-year coverage period.

Those who sponsor these "involuntary unemployment" insurance plans typically market the deal as a "free" package with no direct or out-of-pocket expenses to the consumer. Most insurance plans will have a specific top dollar limit on the coverage, which range between $2,000 and $2,500 each month, while others lenders will limit what they can cover to just the principal and interest.

Vacancies In Housing Markets Across Country Continue To Rise

Housing markets, like those in Boston, are struggling. A recent decennial census report showed the nationwide vacancy rate has risen to more than 11 percent, a clear increase over the last few years. Foreclosed homes left idle, along with depressed property values and home sale prices, are likely contributing to the growing number of high residential vacancies, according to CNN Money.

“More vacant homes equal more downward pressure on home prices,” said chief economist Brad Hunter from real estate information provider Metrostudy.

New Home Sales Reach Record Low In February

CNN Money recently reported that new home sales across the country dropped 16 percent in February, which is the lowest number of sales recorded since 1963.

"We've been running at a very low level," said economist John Canally from LPL Financial, a financial adviser in Boston.

As the housing market struggles to gain more momentum, a monthly report from the Census Bureau revealed that the annual rate of new home sales have plummeted from 301,000 in January to only 250,000 last month. That's a huge 28 percent drop in rates compared to the 347,000 homes sold in February 2010.

Filing 2010 Taxes: Do You Know Your Homeowner Tax Benefits?

Boston taxpayers who have not yet filed their taxes may run into a few surprises due to legislation from the end of the last year that extended some tax breaks, but ended others.

According to The Boston Globe, some individuals may be able to take advantage of a couple of 2010 tax breaks, like energy or homebuyer's tax credits. Others might realize that their debt-reduction attempts last year may have increased their current tax bill, given that forgiven debt on credit cards is considered taxable income.

Boston Renters: Watch Out For Potential Rental Hikes!

Boston renters may have to look out for potential double-digit increases in rent as the demand for rental housing continues to escalate. According to CNN Money, rental vacancy rates have fallen below the 10 percent mark, which was where they had lingered over the last three years.

“Young people are starting to get rid of their roommates and move out of their parent’s basements,” said Peggy Alford, the president of Rent.com. She added that the vacancy rate could potentially reach about 5 percent next year, which would ultimately lead to higher renting prices and fewer units available on the market.

Property Tax Assessment: How Much Is Your Home Worth?

When an individual buys a home, the property immediately becomes subject to property taxes that are determined by a local taxing authority, like a municipal or county government. While most Boston homeowners are accustomed to paying these taxes, many people, especially those considering purchasing their first home, may not be familiar with how property tax rates are determined.

According to FindLaw, a property tax assessment is a general estimate of how much a piece of property is worth, and the valuation or appraisal of that property helps establish how much of the local property tax levy will be paid by the owner. That value, once it is determined, is multiplied by the local tax rates or “mill rate” to determine the how much property tax the owner is required to pay for the property.

How Boston Homeowners Can Qualify For Special Tax Exemption

Thousands of homeowners nationwide have either negotiated short sales, loan modifications, or have had their homes foreclosed this past year. In an effort to tackle these issues, the Boston Herald reported that the IRS has offered to give consumers guidance on how to deal with canceled mortgage debt for the upcoming tax season.

The Internal Revenue Code usually treats the amount of money forgiven by a creditor after canceling most debts, like credit cards or unpaid balances on student loans, as taxable income. But a special tax exemption by Congress that covers distressed home mortgages can help many Boston homeowners avoid facing extra taxes caused by a delinquent mortgage or foreclosure.

Rise in Underwater Mortgages in the US

The number of homeowners across the country with underwater mortgages increased at the end of 2010, according to the Associated Press. This means that the owners, including some in the Boston area, owe more on their mortgages than the worth of their home, which discourages most people from selling their homes in a struggling housing market.

A report released by housing data firm CoreLogic revealed that nearly 23.1 percent of all mortgaged homes, or almost 11.1 million households, were underwater between October and December of last year. The numbers rose 22.5 percent from the July-September quarter, which had around 10.8 million households underwater.

Picky First-time Homebuyers Miss Great Deals On Homes

First-time homebuyers are supposedly declining excellent offers on homes because they seek more "move-in ready" and flawless houses that need very few or no alterations, according to the Boston Herald. Many have even passed up on starter-home price levels compared to buyers in the past that would have been willing to consider future renovations with their offers.

So why are homebuyers, including those in Boston, being so picky?

Attorneys General Consider Foreclosure Settlement With U.S. Banks

The state attorneys general, including Massachusetts’ own Martha Coakley, will be discussing a significant proposed deal with the top U.S. banks to resolve the foreclosure crisis. According to the Boston Herald, the deal may potentially lead to a $25 billion settlement.

Many critics have said lenders earned millions of dollars from underwriting subprime mortgages, even when they allegedly knew that most consumers were unable to make their mortgage payments. Some lenders have even gotten in trouble for “robo-signing,” a practice where bank officials signed off on hundreds of foreclosures each day without reviewing the essential paperwork.

Burbank Tenants Want To Keep Affordable Housing Under HUD

In late January, the Burbank Apartments Tenants Association (BATA) had discussed federal housing subsidies with their landlords, William and Robert Kargman. However, an inconclusive talk with the Kargman brothers led Burbank tenants and their supporters to publicly voice their concerns outside their landlords' office a few weeks later.

According to Fenway News, the Kargmans want to be removed from the Department of Housing and Urban Development's (HUD) Section 8 program. The program covers nearly 40 percent of the apartments in Burbank, and 173 of those units have maintained affordable prices for 40 years. The units also represent almost 10 percent of all affordable housing in Boston's Fenway neighborhood.

AG Martha Coakley Resolves Fair Housing and Discrimination Suit

Legal Newsline reported Massachusetts Attorney General Martha Coakley has received a consent judgment resolving the housing-related discrimination suit she brought against Franchi Management Company Inc. in Natick, and Babcock Tower assistant property manager Marsha Lenhoff, in Boston.

A complaint filed in December 2009 stated that a disabled tenant with mobility impairments had taken a look at an apartment in Babcock Tower and inquired about whether the property management company could make any potential modifications in the bathroom to accommodate her disabilities.

When the disabled woman asked if the company could install push button door openers in the bathroom, a Franchi employee told her the company could not make the changes because they did not accept tenants who were disabled.