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4 January changes impacting the Real Estate & Mortgage Industry

There are several changes happening right now that might be completely changing the way you do business, and one of my missions is to help keep YOU informed so you can better serve your clients.

Today is short and maybe not so sweet as I’m just going to highlight some of the changes in the mortgage and real estate market that you should know about.

New laws regarding lending start 1/10/14
I’m leading with this one because it’s possibly the most alarming.  Why? Because it goes into effect in 4 days yet nobody really seems to know how/what/why it’s going to be implemented.  Part of the Dodd-Frank act, it covers many things, including a new class called QM or Qualified Mortgages (with stricter guidelines) and a 3% cap on mortgage fees (which need to include all affiliated fees such as title if there is a relationship between the 2 companies).  Stay tuned to hear more about how this will impact your business as we know more.  By the way, there’s also part of this that changes Owner Finance transactions.
Flood Insurance rates could SKY-ROCKET
I talked to someone today who’s sister’s insurance in Pinellas county was going from $1,000/year to about $10,000/year! How will that affect your business on waterfront closings? (can you say debt ratio problems?)  FAMP said it best, so I’ll just share a link to their explanation of what’s happening…
The tax breaks on short sales expired last week…
For several years there’s been a tax break in the books that people who had COD/Cancellation of Debt through a short sale could in many cases avoid having to pay income tax on that cancelled debt (COD is considered income for IRS purposes).  While Congress MAY resurrect it, it’s important to have your clients contact their tax professional about any tax matters.  What I will say is there’s ALWAYS been a part of the tax code to make this non-taxable in certain instances.  I always send my clients to http://www.irs.gov/pub/irs-pdf/p4681.pdf
Investors have to wait longer on Fannie properties
Fannie/Freddie have extended their “first look” period on their REO properties to 20 days instead of 15… this is great if you work with owner occupants, not so great if you work with investors.  This 20 day period is open to offers from owner-occupants only.

About the Author

Andy is the Senior Instructor with CTC and has been in the industry since 1995. She'll keep you interested in learning for life!

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