From HousingWire:
Obama to renew push for wider mortgage refinance plan
The Obama administration will renew efforts to pass a wider refinance plan for more underwater homeowners when Congress reconvenes in September.
“The housing market is beginning to pick back up. But there are a lot of people underwater,” Obama said during a press conference Monday.
Senate Democrats introduced three possible bills.
Sens. Robert Menendez, D-N.J., and Barbara Boxer, D-Calif., would expand the Home Affordable Refinance Program again for Fannie Mae and Freddie Mac borrowers. Some Republicans were on board with eliminating repurchase risk for new servicers who refinanced the old loan. The bill would also remove all appraisal requirements for any loans that still require it.
Nearly 423,000 Fannie and Freddie mortgages refinanced under a partially expanded program in the first six months of 2012, more than all of last year, according to the Federal Housing Finance Agency.
More than 53,000 home loans above 125% LTV refinanced under HARP in June, up from less than 3,000 just the month before, the FHFA said. But most of the business is driven to the largest banks, who are seeing higher profits because of the program.
A bill from Sen. Dianne Feinstein, D-Calif., introduced in May, would allow refinancing for underwater borrowers holding mortgages backed by the Federal Housing Administration. It creates a $6 billion fund to insure the new loans.
Sen. Jeff Merkley, D-Ore., introduced a bill that would allow Fannie and Freddie to cover the closing costs if borrowers shorten their terms under a HARP refinance. Though many borrowers are already choosing this option without the fee waivers.
In his State of the Union address, Obama proposed plans to help the more than 11.4 million borrowers refinance and save an average $3,000 a year on mortgage payments.
Such plans remain a long shot, considering staunch Republican opposition and a pressing need for both sides to agree on more pressing budgetary concerns. The so-called fiscal cliff threatens the fragile housing and economic recovery Obama alluded to.
Still, Obama said on Monday these savings would give a boost to the economy, though detractors argue the plan transfers money that would be spent by mortgage investors to the borrower.
Press release from Re/Max:
2012 Housing Recovery Continues: July Sales, Prices Higher than 2011
2012 has become the year of the housing recovery. The July RE/MAX National Housing Report follows the trend of every month this year, with increasing sales and increasing prices. July home sales are 10.3% higher than sales last July and year-over-year home sales have now risen for 13 consecutive months. Median home prices have now reached levels higher than the previous year for six months in a row, with an increase of 3.7% over July 2011. Inventory is now becoming a serious challenge to this recovering market, with available homes-for-sale falling 26.8% lower than the same month last year. Home sales could be much greater if more inventory was available, especially in the lower price range, where most sales are now occurring. With increased demand and shrinking inventory, the average Days on Market of homes sold in July was 82.
Germany is holding up Europe, who will hold them up?
“(Reuters) – German engineering conglomerate Siemens (SIEGn.DE) is in early internal talks to cut thousands of jobs in response to a weakening economy, particularly in Europe, a German newspaper reported.
Decisions could be made in October or November, according to daily Boersen-Zeitung, which did not specify its sources.
A Siemens spokesman declined to comment.
The report comes amid growing signs that Germany’s economy, which remained relatively robust through large parts of the euro zone crisis, is losing steam.
Siemens, Germany’s biggest company by market value, in July reported a big drop in new orders as customers put off investments due to Europe’s crisis, saying full-year goals would be hard to meet.
In Germany alone, orders were down by 43 percent in the first nine months of its financial year.
CEO Peter Loescher said at the time Siemens would have to cut costs and become leaner, but he would not say whether Siemens would cut jobs.
At the end of June, Siemens had 410,000 employees, of whom 129,000 were based in Germany. That makes it one of the country’s biggest employers after Volkswagen (VOWG_p.DE) and Deutsche Post DHL (DPWGn.DE).
The jobless total in Germany remains close to its lowest since Germany reunified more than two decades ago, but the number out of work rose for a fourth month running in July.
A spate of German companies have announced job cuts recently.
Department store chain Karstadt said it would cut 2,000 jobs while truck maker MAN SE (MANG.DE) ordered a hiring freeze at its truck and bus division as second-quarter profit plunged.
ThyssenKrupp (TKAG.DE) has cut the hours of workers at its five steel-making facilities in Germany in response to a slowdown in demand while Opel – the German unit of U.S. automaker General Motors (GM.N) – is close to signing a similar accord with workers, sources have said.”
3b prior thread , you are more than welcome to park in my driveway(it is large) in your new live in the van austerity measure. LOL
Not to rub salt in the wound but Gary , 3b (all) check out this link, amazing what you can get for your money out my way (I am even taken back).
http://emailrpt.gsmls.com/public/show_public_report_rpt.do?report=client2up&Id=77011655_11260
Well for all you folks looking for work…………….
“Infosys (INFY) +2.4% in Bombay after an Alabama court yesterday threw out a lawsuit from a former employee who claimed that the company harassed him after he pointed out what he said was the misuse of U.S. short-term work visas. However, a second case and an investigation into Infosys’ use of visas are pending. “
grim 1 I am not as confident of this recovery as our friends at Remax. The employment picture doesn’t support it and I see no catalyst or policy to change that in the foreseeable future.
I’ve worked very closely with Infosys for years, never really been all that impressed (Same goes for ITC and a number of others). I remember one time when they sent over two guys on H1B, I walked over to their cubes to introduce myself and both of them were on Monster, first day on the job, no shit. I won’t get into the fact that they decided to stay in Edison, since they had friends/family there, and they complained every single day about having to commute to Bloomfield. They ended up taking a taxi, every single day, and billing it (we didn’t pay). Was a completely worthless endeavor, I think we invested about $2m in a project that didn’t go anywhere because they couldn’t grasp the business. Those first two guys both left a few weeks in. We never asked for them to send anyone else over.
Another great Infosys story, we took over a set of contractors from a client to work on a project (they continued to fund). What a mess these guys made. They were working on a billing system module and completely screwed it to hell. Testing didn’t catch it as the bug was in a very complex/obscure refunds scenario. Ended up costing us tens of thousands as we had to refund the client for the loss. Found the bug, they had basically commented out the specific refunds logic in question and added the following text “don’t understand, make sure to ask ***** what does this.” For no reason they just turned off an entire block of code. We ended up scrapping everything they touched and redoing the work from scratch. So instead of paying once to get it done right once, we paid three times (client paid for the contractors, we paid for their mistake, and we paid to redo the work).
Good Morning New Jersey
Mike #4,
What are the fees on some SFM homes on top of taxes
It’s all on the fast lane to hell. See you there.
yo fees? I believe this is your question, two are in lake communities (1200 Yr on those) others just as everywhere else taxes. If one jumps out at you I can give you more info.
Morning Chip I see you are in usual form.
Game-changer for jj:
“Just under two years ago, Meredith Whitney made a much maligned, if very vocal call, that hundreds of US municipalities will file for bankruptcy. She also put a timestamp on the call, which in retrospect was her downfall, because while she will ultimately proven 100% correct about the actual event, the fact that she was off temporally (making it seem like a trading call instead of a fundamental observation) merely had a dilutive impact of the statement. As a result she was initially taken seriously, causing a big hit to the muni market, only to be largely ignored subsequently even following several prominent California bankruptcies. This is all about to change as none other than Warren Buffett has slashed half of his entire municipal exposure, in what the WSJ has dubbed a “red flag” for the municipal-bond market. Perhaps another way of calling it is the second coming of Meredith Whitney’s muni call, this time however from an institutionalized permabull.”
http://www.zerohedge.com/news/buffett-joins-team-whitney-sees-muni-pain-ahead-he-unwinds-half-his-bullish-exposure-ahead-time
14 Just a little early in the call.
Mike,
Thanks
All is well my futures board & open markets all green. LOL
Yo best deal there is 14 Harbor Side @ 314k IMHO 550 per year dues. Real nice over there, oops that makes three.
Grim, your infosys experience sounds about as good as the experiences I’ve had with Wipro, and Cognizant. It’s dicey indeed when using these guys honestly the offshoring thing in a really limited scope can work ok if you have some decent people, you can work 24 hours a day which is nice. But it is far from easy, isn’t all that cheap and you have to really be structured to do that, on top of that it really only works well when it is limited, it is simply to difficult to farm out large amounts of work. As for the infosys thing it is a crime they(offshoring consulting firms) all abuse the US visa system and should be punished for it.
[4]MW – I’ve been noticing the same “bargain” pricing in Morris County over the last 12 months. Grim thinks this is a bifurcated storm that won’t affect the “nice” towns but I’m unsure how much water can be kept outside the city limits when your perimeter is constructed is comprised by a single strand of blue ribbon instead of hay bales.
Not to rub salt in the wound but Gary , 3b (all) check out this link, amazing what you can get for your money out my way (I am even taken back).
http://emailrpt.gsmls.com/public/show_public_report_rpt.do?report=client2up&Id=77011655_11260
I am expecting shiny to correct after the election regardless of who wins. Reason will be the elimination of a lot of uncertainty. May also get a market spike for same reason.
I will view this as a buying opp for shiny but want to know if anyone has heard views that would support or oppose this?
The End Is Nigh (Strangle Your Neighbor With A Bra Edition):
MOSCOW – Russian investigators say a woman in East Siberia has strangled an elderly neighbor to death with her bra.
The Investigative Committee in Buryatia said in a statement on Tuesday that the 26-year-old woman from the town of Zakamensk, just miles north off the border with Mongolia, has been charged with murder.
Investigators say the woman was drunk on a July evening when she and her boyfriend called on their 65-year-old neighbor for money to buy drinks. Angry that he refused to lend them money, the woman punched him in the face and tried to strangle him with her hands, before taking off her bra and strangling him with it, they say.
The woman is now in custody awaiting the end of the probe, investigators say. Her name was not released.
13 What I don’t understand about that article is how Buffet sold half his holdings at substantial losses. The municipal bond market has tacked on some gains since the Whitney scare awhile back and just kept climbing. Did he sell at any cost to unload? Did he own a good portion of those California munis that went bankrupt?
#3&4 Thanks Mike!!! And unbelieveable for 300K list price!!
[21] Nom – Physical or Paper? Physical gold is already somewhat decoupled from spot, platinum even more so. I think TPTB have somewhat quieted the BTFD crowd by locking in gold ~$1600 and essentially eliminating the dips. I think movement in either direction is good for gold long term. I think everyone who can afford it should take delivery of a small amount of physical at least every two months, even if it’s only $1000 worth (exempt from sales tax above $1000). If you can’t afford that, buy a 1/10 ounce eagle on ebay once a month. I think only by outright purchasing the physical do you have any sense of movement in the market when it comes to decoupling of actual price from spot, delivery times (when you buy from a dealer), or inherent supply and demand. One of my own metrics is I like to measure the difference between buying two rolls of ASEs on ebay and buying the same from my dealer. Right now the cost is about the same, which I rarely see.
I am expecting shiny to correct after the election regardless of who wins. Reason will be the elimination of a lot of uncertainty. May also get a market spike for same reason.
I will view this as a buying opp for shiny but want to know if anyone has heard views that would support or oppose this?
Expat 19 I agree unless you work in NYC a little ride saves a ton of money. From my area to most offices in NNJ hour 1/2 leave at 7-730 in by 9 leave at 5 home 63o or so. How long does it take to get in City from most places by train,bus, car, I do not know as I worked NYC early 80s.Now fuel is an issue/cost get a high mileage compact cheap & run it for 5 years or more.
#6 Mike: I agree, and a 9.8% unemployment rate?
3b 24 yea I knew you say WOW I did also, and that is asking/list.
#28 Mike: Someone could get it for 275K easy, maybe less. And even at 300K full price you cannot really complain.
“would say WOW”, more coffee.
3b 29 No not at all then there is just the matter of getting to work. On the flip side no crime to speak of & for better or worse we are not a diverse town or county for that matter.
Still happy I picked up one for 1/3 those prices & taxes, prepared for the worst.
JJ take the day off………..onions beware.
re: Obama Plan for mortages, perhaps an October Surprise for some of the underwater bag-holders guaranteed by Fannie and Freddie? 80% of the 3 million or so underwater bag-holders guaranteed by Fannie and Freddie are current on their payments. Why should they get a free pony here?
Edward DeMarco from FHFA must be busy writing up a new resume. The Dems are hell bent on principal reductions and he is the only one left standing against it in the administration. Even if the Republicans stop any bill in the house they can still take action….
Buffet did not own any Muni bonds, he wrote default insurance on Muni bonds that he sold to Lehman in 2007. Not one bond in that portfolio defaulted since 2007. Lehman collected the insurance prems since 2007 and has not made one single pay-out.
However, he made a great call as in 2008-2011 default insurance prem rates rose greatly. Remember, the individual investor who owned the bonds in that portfolio who is most likely an 80 year old man in Great Neck still got his coupon payments and will still get his principal back. Buffet if he wanted to could have wrote more default insurance in the panic of December 2008 to January 2011 and most likely got double the rates for same amount of risk.
Article is plain stupid. Also defaults in places like California, Detroit, Alabama etc are a concern. However, a reader sitting in Starbucks in lower NYC most owns New York State. Cuomo is actually pretty smart and DeNapoli is too. NYS is rated triple AAA.
Somone who owns NYS bonds and is holding to maturity the whole thing is irrelevant. That said the big money and days of capital gains are over, you are just clipping your little coupons till the day you die.
Mike says:
August 21, 2012 at 8:36 am
13 What I don’t understand about that article is how Buffet sold half his holdings at substantial losses. The municipal bond market has tacked on some gains since the Whitney scare awhile back and just kept climbing. Did he sell at any cost to unload? Did he own a good portion of those California munis that went bankrupt?
HARP makes sense to me.If this mortgages were not underwater,they will be refinancing them at this low rates.Why not give them the opportunity to refinance to lower their monthly payments or shorten the term of their loans.Principal balance stays the same.We complain about the banks being rescued and we got sh!t.Here is our chance.A win win for everybody and the economy.
#36 NYS G.O. bonds are AA by both, not tripleAAA.
Moose,
You have Gmail.
[36] JJ
Gotta go with JJ on that one. Observations are spot on.
God, I feel so inadequate when he’s around.
Cobbler from yesterday. ““Mad rush out of UST” to where?” Fed is not fully in control of the problem they created with their bond price fixing operation. According to the Fed’s own people using the Taylor rule the Fed should have started to raise rates in the 3rd quarter of 2011, and they haven’t mostly because they and their member banks are sitting on mountains of UST.
Debt is everywhere. Sovereign, municipal, pension, public and private you name it. Massive output gap everywhere as well including shudder Asia! Many people including EU politicians are starting to believe inflation perhaps more than the 1970s is the only way out for the powers-that-be. That this is coming I have no doubt and Helicopter Ben is the man for the job starting right after the EU politicians get back from August vacation and start their bailout culminating with our elections and fiscal crisis then bailout come January. Who wants to hold UST when you can hedge elsewhere? Just ask the powers-that-be including newlywed Soros.
[25] expat,
For investing, all paper. My attitude is that shiny has little utility in the event of a TEOTWAWKI event, so I’d rather cash out the paper on a massive panic that drives shiny to the stratosphere, then use the cash to pay off the cards that I maxed out on beans, bullets, and barbed wire.
Physical has too many issues for me to deal with. I have very little but plan to do more incrementally as you do. My primary fear is veracity; knowing I am getting Au or Ag and not W.
[42] redux,
Actually, if planned properly, use the cash to buy physical goods and default on the cards. If it is the End of the World, Fcuk the banks.
#41 Juice: And if Ben ben, starts raising rates, what happens to the so called recovery?
re: #44 – 3B -Benny has already laid the blame of the fate of the recovery on Congress this summer more than once, he has his cover.
Unter dem Begriff Mobile Devices vereinen sich kleine, tragbare Computer wie Notebooks, Ultrabooks, Netbooks, Tablet-PCs und Smartphones. Diese Geräte eignen sich hervorragend als mobile Kommunikationszentrale. Zahlreiche Apps ermöglichen zudem die Erledigung bürotypischer Aufgaben wie z. Bsp. die Erstellung von Angeboten, Kalkulationen, Berichten, Planungen usw. Wir bieten in unserem Shop eine Auswahl der besten Geräte auf dem Mobile-Devices-Sektor. Alle Produkte in unserem Internetshop sind verfügbar und werden nach Bestellung innerhalb von 1-3 Tagen ausgeliefert. Unser Shop ist in diversen Preisvergleichs-Portalen gelistet. Daher achten wir stets auf möglichst günstige Preise.
#46 Juice: Agreed he has his cover. But if rates go up dramatically than it is the end of the so called recovery, including the housing recovery. One question I ponder over and over again is what happens if mtg rates go to 7% (which back in the day was attractive) over the next few years. Will that be fine because we will have a rip roaring ecoomy, with lots of high paying good jobs with great bennies? I certainly do not see it.
Or will it be your scenario (which I believe will ultimatley happen) and high inflation, no growth, and abig decline again in housing prices?
The fact that all of our so called leaders including Bernanke just seem to be winging it is scary. But then again I think too much; I am told that is my problem.
Off to the salt mines, but before I go, I had to share this.
I was on gmail and it had a banner with recycling tips. Today’s tip was “You can make a lovely hat out of previously-used tin foil.”
Immediately, I thought of you guys. ;-)
JJ: shut up…..I need to buy more munis cheap, and I can’t do that if you spread rumors around based on truth and facts…..we need more panic….
raging bull jj says:
August 21, 2012 at 9:46 am
Buffet did not own any Muni bonds, he wrote default insurance on Muni bonds that he sold to Lehman in 2007. Not one bond in that portfolio defaulted since 2007. Lehman collected the insurance prems since 2007 and has not made one single pay-out.
However, he made a great call as in 2008-2011 default insurance prem rates rose greatly. Remember, the individual investor who owned the bonds in that portfolio who is most likely an 80 year old man in Great Neck still got his coupon payments and will still get his principal back. Buffet if he wanted to could have wrote more default insurance in the panic of December 2008 to January 2011 and most likely got double the rates for same amount of risk.
Article is plain stupid. Also defaults in places like California, Detroit, Alabama etc are a concern. However, a reader sitting in Starbucks in lower NYC most owns New York State. Cuomo is actually pretty smart and DeNapoli is too. NYS is rated triple AAA.
Somone who owns NYS bonds and is holding to maturity the whole thing is irrelevant. That said the big money and days of capital gains are over, you are just clipping your little coupons till the day you die.
Nom [39];
Replied.
Moose,
I owe you Big Time. Thanks. You are Da Man!
[42] Nom – You’re assuming SLV and GLD move in the same direction as Au & Ag always? My thinking is a price spike will be precipitated when they don’t. If you want it/need it in your brokerage account I feel much safer with PSLV and PHYS.
For investing, all paper. My attitude is that shiny has little utility in the event of a TEOTWAWKI event, so I’d rather cash out the paper on a massive panic that drives shiny to the stratosphere, then use the cash to pay off the cards that I maxed out on beans, bullets, and barbed wire.
[53] redux,
Moose,
I just read it and you have no idea how helpful that is going to be. It is huge.
I have to add another drink to my tab for you at the next GTG.
Okay, bromance over. Back to work everyone.
[54] expat,
Good tip, thanks. I appreciate it.
Back to the salt mines. There’s an attorney in Newark that needs to be spanked. Hard.
nom there is a JJ story in there somewhere.
Ok I have another real estate question. Looking at a beach house for sale.
I am working on buying a beach house from an older guy and house is his and his wifes name. He is 82. Had his mother in law living there rent free last ten years, now she is going to a nursing home and does not want to start with a new tenant and is too old to use it himself anymore. He has another vacation home in Florida and his primary home is in New York. Beach house was never recorded as an investment property always been a vacation home.His basis in home is 100K from 1994 and he wants 350K.for home. He has done zero capital improvements to home. Just minor maint, same everything from when he bought.
He is claiming he is over 55 and he can take gain tax free, I told him at best on a little bungalow that is all original most cap improvements you could claim is 50% which would leave you with a taxable 200K gain. He is claiming he has no claim. Reason I ask as is he wants me to come up with an offer price and show how me buying cash will help. If I can show he will have a gain he hinted maybe we split it. Maybe he sell me the “furniture” sep from house. Also realtor agreed to take a tip if cash deal, I approached owner directly so he is under no obligation to realtor. But he felt since he hired him and he showed house a few times he owes him so he wants to throw him $1,500 cash tip at closing.
Does this guy owe tax on home? If so and guy is willing to sell it furnished, which it is, although mostly dumpy what are ramifications if I paid 200K for house, paid him 100K for furniture and to take care of Realtor tip and got house at a good price and he sold house with no realtor commission and no income tax. Basically we both win.
Sounds very shady to me to tell you the truth. Also wont I just owe taxes on back end as I have a lower cost basis when I sell? I dont care about depreciation as I am in a tax bracket where I cant take it anyhow, also I can have a better shot of grieving my RE taxes at a lower price. Since house is not a distress sale. Owner is alive and well and owns house outright my purchase price could easily be made my assessed value.
Is this normal? I mean someone who owns a house free and clear with a cap gain on a non primary residence selling to a cash buyer do people do this sort of thing. I mean I get nothing out of it other than saving maybe 30K on purchase price and maybe saving 2k a year on property taxes. House needs work I have to put maybe 15K in after I buy it. But I should end up with a house that rents for around 15K for summer and $1,700 a month off season with property taxes of 4k and no mortgage. At price I should be able to always keep house till day I die as costs to run are crazy cheap. However, whole deal smells like day old fish.
What do you guys think?.
yo (37)-
Unfortunately, outside of the Fourth Dimension, you can’t refinance negative equity.
All the bailouts and all the “help” that begins with the idea of refinancing negative equity is DOA. All the talk you hear about such ideas is pure, pandering bullshit.
“HARP makes sense to me.If this mortgages were not underwater,they will be refinancing them at this low rates.Why not give them the opportunity to refinance to lower their monthly payments or shorten the term of their loans.”
plume (40)-
jj talks a great game on munis, but his premise is not that the apocalypse is nigh. And, on that point, methinks he is wrong.
Evidently, so does Buffett. The move he just pulled is his classic “first loss is your best loss” gambit.
#61 If the mtgs were not underwater in the first place, wouldn’t they be abel to refiance in the first place? Just saying
Anyone want to work with me to start a blog for impaired Belize bondholders?
3b (48)-
If rates start to go up, Bernank will have all the cover he needs. We’ll all be too busy watching the derivatives casino implode.
plume (49)-
You can also make a zip gun out of a car antenna.
Life time trading average I have from 1987 to 2012 is 20% a year. Buffet and Gross are pretty smart. But so am I. Buffet is making plays on insurance. Not munis. Honestly since he is buy and hold and pays no dividends Munis dont make much since to own outright in his fund. I rarely in past bought munis. It is just from 2008-early 2012 I bought a lot of munis. Day Lehman collasped for instance I snagged a 7.75 NYC muni at par that was being margined called out. Still own it and will own it till it matures. 7.75% tax free for 12 years with no cap gain upon maturity. I put in bids to buy maybe 30 munis for everyone I get. Last month I was buying Sprint bonds and GMAC bonds which worked out. Also I did buy stock between December and June. I have not sold much munis as where do I go with it. Plus the tax free income stream just gives me more each month. I dont believe NYS paper will default. I have small postions in PR, Guam and VI but I bought that stuff in 2009-2011 at 7% tax free and I can hold that forever. If it defaults so be it. Remember most muni defaults are techincal defaults. Even orange county paid out 100%
Ernest Money says:
August 21, 2012 at 12:14 pm
plume (40)-
jj talks a great game on munis, but his premise is not that the apocalypse is nigh. And, on that point, methinks he is wrong.
Evidently, so does Buffett. The move he just pulled is his classic “first loss is your best loss” gambit.
You can refinance an underwater mortgage too, just bring cash to closing.
3B says:
August 21, 2012 at 12:14 pm
#61 If the mtgs were not underwater in the first place, wouldn’t they be abel to refiance in the first place? Just saying
#65 If rates go from 3.50 ish (30 year now). to say 5 or 6%. I woudl say that will nto be good for prices, to say the leasr. So you got a cheap mtg, but the value drops another 15 or 20%.
69 – Yes, but if rates go to 6%, it means the economy is rocking and unemployment is low. What kind of impact will that have on prices?
[70] “if rates go to 6%, it means the economy is rocking and unemployment is low”
You’re assuming the Fed will have control over said rates going to 6%, and not our Chinese overlords. I disagree.
Ok, what was up with 41 Blackburn in Summit (Other than the $165k loss from the previous 2010 sale). Sold at $1.6m in 3 weeks? Mind boggling.
If rates rise to 6% bigger issue is your RE taxes are going up as more for towns to finance and the people who moved large portions of 401K and brokerage accounts to long term bonds will be crushed. Also car loans, student loans will rise.
Last time rates rose quickly in 1999 and 2000 home prices also rose. Also people are buying with a mortgage cause rates are cheap. If rates are high they just put down more cash or pay all in cash. Historically 6% is a good rate on a mortgage.
I rather buy a home when rates are high, usually home prices are less and when you refinance you come out ahead.
59
No such thing as an age exclusion for capital gains.
Only 500k gain exclusion on primary residence with limitations.
Never allowed to take loss on personal property.
Must recogize gain on personal property. This would include furniture.
Depreciation is not an option. If it is a rental property you should depreciate it.
Depending on your income and other investments, you may not be able to use passive loss.
Were you to assign 100k to furniture and then throw it away, you would have a 100k loss on the furnishings of your rental property. Again, loss would most likely be suspended.
Upon disposition of rental property any usused losses are released regardless of your income or other investments. This can offset the gain on the sale.
Many times seller receives 1099 for proceeds of sale of house.
If seller were to follow this plan and the details were uncovered in an IRS audit, he would be assessed taxes owed, penalty, and interest.
Just my opinion. LT Cap gain rate is only 15%. Why risk it?
Looking to stir up some discussion here. Yes, Bergen county has plenty of fakers, but what about the makers?
In the past 3 months, 134 homes priced at over $1m sold in Bergen, total value somewhere around $200m, 31 of these sold for cash. We’re talking about 1.5 homes sold every single day.
If we go back a full year, we’ve got 380 properties sold at +$1m, 104 sold for cash. Average sales price was $1,622,265. We’re talking about more than six hundred million dollars in cash and properties transferred.
If I take a rough average of cash purchases, looks like the closing price was closer to $2m. There are plenty of $3m cash closings, and cash looks like standard operating procedure over $4m.
We’ve got 200 more in Morris county, 190 in Essex, 150 in Somerset, 130 in Union.
We’ve easily got more than 1000 homes sold over $1m in the last year, probably $1.5-$1.75 billion dollars worth. If we’re using the same baseline cash percentage as Bergen (approx 25% of sales), we’ve got more than 250 cash sales at $1m+, approximately $400m worth.
Clearly someone has money.
Definitely there are always looking to buy due to relocation, families etc. In the last few years of declining prices lots of people held off, so its not unexpected that lots of people have bought this summer as lots of people think this is “bottoming out”.
The real test is next spring, I think lots of people have been waiting to sell too – but wouldn’t dare list in a soft market. With this supply coming online next Spring, lots of vendors could end up disappointed as the cashed up crowd bought this year, and we could end up with a glut of supply again.
All IMHO opinion of course.
I disagree with JJ’s view that much of Wall st is doing well, rumours are we’ve got another round of redundancies next month, and we wont be the only ones.
Grim and they are not all professional athletes and banksters. Proximity, decent burbs and some folks just don’t care about the taxes. It is also why things will never change.
(59)
I dreamed that scenario several times over. Doing anything wacky like giving cash under the table or similar is fine if the price is lowered to reflect the risk. However, you’re cost basis is also reduced. If you sell at the price you paid, cash part included, you will owe extra taxes and who knows what the tax rate will be then. But you also may not care if you hold on to it forever. Then, it will become part of the estate and be exempt (to a point, anyway) from income/capital gains taxes.
The best way to work on it is to use the old adage for investment properties: Profit is realized at the time you buy the property, not sell it. That means pay as little for it as possible. People at that guy’s age have had enough of hassles in their life. Play on the guy saying that using the straightforward way he will not have to think of receiving a letter in the mail two years hence.
As for the other followers of this forum, why are you not busting your butt behind the scenes doing the dirty work JJ is doing in order to secure the house of your dreams at the lowest possible price? By the time the listing hits MLS or exclusive, the price is right no more. Game is over. Every realtor has a back door investor/financier or him/herself to scoop up a property deemed on the cheap and not yet hitting the pages. It’s a rare bird, where an MLS lowball works. Ask me how I know.
If we go back a full year, we’ve got 380 properties sold at +$1m, 104 sold for cash.
If we grab the just under $1m mark ($950,000-$999,999), which represent all of the million dollar homes that closed lower to skirt around the additional “millionaire” transfer fees, we add almost 100 additional to that 380.
Grim – wondering how the 1% is doing? How many here want to stomach the tax bill on a million dollar home in Bergen County?
I like this Montclair house for $1m. The scary thing is $31k pa taxes, what will it be in 10 years? I’m going to have to have more kids to fill it up & so I can send them out to earn some cash to pay the property taxes.
For smaller though I’m starting to think the Montclair isn’t so bad, sure taxes are high but probably similar for comparable houses in Westchester/LI, but they’re priced cheaper so as a percentage it feels higher.
http://www.zillow.com/homedetails/224-Christopher-St-Montclair-NJ-07042/38689137_zpid/
grim, can you stop the links from people’s names, maybe that will slow down the spammers.
Eg this, listed at 900k. Taxes are 42k due to an appraisal of $1.7m. Nice hit there.
http://www.zillow.com/homedetails/27-Undercliff-Rd-Montclair-NJ-07042/38680485_zpid/
Very High priced NNJ houses selling for cash = foreign nationals who want to be out of cash and into tangible assets? It’s just a safety deposit box for them, just like the article on multi-million dollar NYC apartments last week.
Richard…Move to Montclair at your own risk. Lately there has been a rash of graffiti that would make Joey Revs blush.
do bot spammers dream of electric sheep.
Man are they awful today. 31K taxes with no sign of slowing down or halting. That moron in Missouri got it wrong the only legitimate r ape is here in NJ.
What happens when the mortgage deduction,property tax deduction is eliminated?Cash buyers will be the only ones left buying this expensive homes.A guy that needs to take a mortgage will have a psychological effect of not benefiting.Will consider paying interest is a waste of money.
If this happens,prices of homes on the upper tier will fall.No?
This will be welcome news in NNJ/NY/CT
Republican Platform Won’t Protect Mortgage Tax Deduction
http://www.bloomberg.com/news/2012-08-20/republican-platform-won-t-protect-mortgage-tax-deduction.html
“Latest Drag on Economy: Fewer Babies”
We need JJ work overtime
Libtard you regularly warn people about Montclair. I realise the town finances aren’t great, but tax wise it seems cheaper than other towns N & E of NYC.
Is it about the town going downhill? Other neighbouring towns like Maplewood & West Orange are “losing their desirability” but with a good train station I think maybe its just temporary. Though i guess if Jersey City/Hoboken/Brooklyn are gentrifying there must be suburbs going down and maybe Essex is the loser.
I guess Summit is safer on both counts but you’d pay an extra few hundred k to be safe, doesn’t sound such a great deal.
Grim [69];
Yeah… but. 300 sales. The problem is the other 30,000 listers languishing on the market thinking that some millionaire is going to fall in love with their cr@p shack and pay them bubble peak prices for it. “$850k is a a bargain compared to spending $1.5 MM!” Those cash buyers know what they want, and their run of the mill listing with peeling paint and 80’s fixtures doesn’t have it.
richard (77)-
The listing agent looks like a gerbil.
Take a stroll thru PRM’s downtown before you think about buying a house there.
Montklair will end up looking like a scaled-down Detroit before this whole thing is over.
PRM will also end up stiffing their bondholders and the skools are way overrated.
[82] escapee,
That is one hell of an inferential leap. Here is what the article said.
“To overhaul the tax code, Romney has proposed lowering the corporate tax rate to 25 percent from 35 percent and reducing individual income-tax rates by 20 percent. He has said that eliminating tax breaks for the highest-income Americans would help pay for the lower rates. The former Massachusetts governor hasn’t specified which tax breaks he would eliminate.
To keep his proposed tax-rate cuts revenue neutral, Romney would have to eliminate $320 billion worth of tax breaks, about 30 percent of the total, the nonpartisan Tax Policy Center said in a study released in Washington last month.
The nonpartisan, Washington-based Congressional Budget Office said that the mortgage-income tax deduction cost $80 billion in 2009.”
So, the article concludes that Romney, because he didn’t specify what deductions he would get rid of, will get rid of the mortgage deduction. Why they decided to single that one one is beyond me.
Further, the article also says that breaks would be eliminated for higher earners in exchange for the lower rate. Basically, a tax neutral argument. To reiterate, the breaks eliminated would be only for higher earners.
So, in reality, this hurts no middle income taxpayers, and may actually help states that base taxable income on the federal number. If the federal number is higher, then the state number is higher, hence taxes are higher.
whoops, saw the platform plank. Was buried someplace I wasn’t expecting. Not a smart move as it gives the oppo another distortion opportunity.
JJ Political Update:
Bill and Hillary Clinton lived it up like the locals in the Hamptons this weekend. On Friday, the former president and current secretary of state were spotted at Brooke and Daniel Neidich’s annual summer bash at their Wainscott compound, which also served double duty as the birthday party for their son John Neidich, who is a co-owner of hip NoHo restaurant Acme. Sources told us everyone let their hair down except Hillary, who wore her hair back in a scrunchie. The next day, the Clintons were spotted at dinner at 1770 House in East Hampton with daughter Chelsea and her husband, Marc Mezvinsky. We’re told Secret Service accompanied the Clintons and munched burgers at a table nearby. Bill — who celebrated his 66th birthday on Sunday — and Hillary are said to be renting a home for the month of August in East Hampton owned by real-estate honcho Elie Hirschfeld. Last summer, they rented the same home but only stayed for a week.
Unlike other laptops available for sale, this laptop isn’t going to feature any fast access buttons which is thought to be its drawback.The device normally comes with latest os of Microsoft windows 7 download. It really is obtainable in home premium, professional and ultimate edition of windows 7 download. It also includes a built-in microphone along with a 2-megapixel camera for video chatting.
I dated someone who lived in Montklair during 1992-1993….it has always been demented…..a strange suburb with extreme wealth, modest means and poverty side-by-side with a smattering of college kids…..lots of broken up homes functioning as rentals….
Richard says:
August 21, 2012 at 4:01 pm
Libtard you regularly warn people about Montclair. I realise the town finances aren’t great, but tax wise it seems cheaper than other towns N & E of NYC.
DOH!
http://www.bloomberg.com/news/2012-08-21/d-oh-usps-stuck-with-682-million-unsold-simpsons-stamps.html
I Found It This is great for people who engage with them. Just about anything you can control when and where they access the information under your supervision. Are you blogging less because of Facebook and Twitter? There is help for you!
54: JJ:
Sounds like he is referencing the pre-1997 law where over 55 had a one time, albeit limited, exclusion. Even so, I believe that was on principal residence.
new nj monthly 2012 new jersey high school list is out
https://www.box.com/s/7c300516930c32f71a8e
Holy shit, there are going to be lots of pissed off people.
Hoboken now 298 wow even Neptune beat them out.
The school I teach at dropped 3 slots…
whoops, scratch that, jumped 3 spots…read the chart wrong
RiverDell fell from 27 in 2010 to 104 in 2012;not even in the top 100. Going to be alot of unhappy people in both towns.
#67 JJ: Surely uyou know prices went up because the economy was booming in 1999 very early 2000. Plus you could still buy a nice house in the blue ribbiny towns in Bergen in the 175 to 250k range. Plus taxes were 50 to 70% lower. None of that is true today. Sometimes you got it and other times you are just way, way off.
#64 grim No it does not necessarily, if at all. It could also mean no growth and rampant inflation, as in stagflation. That is far more likely to happen than a rocking economy. Nothing on the horizon to indicate we are anywhere close to a rocking economy any time soon.
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South Hunterdon? Are you f’ing kidding me? A dilapidated building in the middle of a cornfield. There are probably prisons in NJ where you can learn more.
Tractor repair shop must have been high on the criteria list.
Again, my local faded blue ribbony penitentiary (N Hunterdon) holds down its usual spot in the mid-60s.
Somehow, my daughter gleaned just enough out of this gulag to allow her to do well in kolledge.
3b (103)-
Tax dollars well-squandered.
I can’t wait for my kids to single handedly knock Tenafly out of the top 25.
Why is it that we always theorize people will act rationally when it comes to comparatively small sums of money (as compared to the billions of dollars we hear in the news), which is also spread out over 30 years, with formula’s most buyers never once look at? And taxes… let’s be honest, the majority of people buying never look at them until they receive the first bill.
We are convinced the general public is rational when it comes to houses, yet regularly the main new stories we post are about people who, for instance, strangled their neighbor with a bra.
JMHO
Are we convinced the general public is rational when it comes to houses? Not for nothing, but I’ve seen nothing but propaganda from the media and NAR, lying and clueless real estate agents, and a general public that still to this day thinks real estate only goes up. If anything, the public has never acted rationally with respect to real estate. The only thing that used to be rational was the banks reluctance to loan these deadbeats money to buy their dream home.
It’s not rational because it’s not consumption of a pure commodity good. The utilitarian aspect of shelter goes only so far before other factors come into play.
Think of it like Maslow’s hierarchy of needs (psych 101). Once we cover the basic physiological needs, we move on to higher order needs/desires. We might move on to safety being a factor, or maybe schools, or maybe location. Once those are covered we move on to consumption based factors, “I like this vs that”, and then on to more conspicuous factors, “this house/neighborhood is beautiful.”
Someone struggling to afford basic housing isn’t going to see why paying $100k more to live in a specific neighborhood is at all rational. To the person paying $100k more, it may make perfect sense.
And taxes… let’s be honest, the majority of people buying never look at them until they receive the first bill.
For my clients, it’s usually the second question after “what are they asking?”
113/114 –
So then can we really assume that if X happens (Rates rise, prices drop, etc.), Y is the outcome (No sales, low sales, dead industry, etc.)?
115 –
Your the Realtor (I think thats your occupation…), I have no data on this (only opinion which may be misplaced). But may I suggest that you have a reputation in this industry, which perhaps skews the clients that seek you out?
#7 grim
I have worked with most of the consulting firms and for the most part, they are all the same all over the world. For me there is nothing to top, Android Consulting in they hey day before they were pegged back, intellectually superior, but in reality dumb as rocks.
#115 grim
As a lot of taxes are paid out of escrow by the mortgage servicer, a lot of the buyers may not realize the true figure. Out of sight, out of mind. It’s in the mortgage holders benefit to be the one cutting the check to the town.
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