Fraud in the Financials

Please watch this Bill Moyers Journal segment on the depth and breadth of the financial fraud perpetrated by the large financial institutions, and the actual government officials themselves. The segment starts mild and slow, and closes with such horrifying facts and charges that I must admit I was nauseated. These fuckers should ALL GO TO JAIL.
http://www.pbs.org/moyers/journal/04232010/watch.html
Warning! This may cause you to lose faith in our financial system. I am not kidding.

Bank of America Buys Itself More Time...

From the Category of... What can we do to save our asses and make it look like we are helping out the homeowner? comes this little jewel... (Courtesy DSNews.com)

BofA Proposes Nine-Month Forbearance Plan for Unemployed

Bank of America says it is considering giving unemployed homeowners nine months of no mortgage payments while they search for a new job.

If during the nine-month forbearance period, the customer is successful in finding employment, Bank of America would structure a mortgage loan modification based on the borrower’s new income. (You'll Still Owe Twice what it is worth!)

Customers who enter the program must be willing to relinquish the home through a deed-in-lieu arrangement (translation - sign away your right to due course of law)if they haven’t found new employment during the nine-month time frame, and would be given a minimum of $2,000 to help with the transition.
(Does a job at McDonalds or Wal-Mart count? I ain't gonna be able to make any kind of payment on that wage - and those are the only jobs out there)

The North Carolina-based bank stressed that the proposal must be approved by regulators before it can be implemented, but market observers are calling it a positive step in the fight against foreclosure.

A Bank of America spokesperson told DSNews.com, “Sustained recessionary impacts and their affect on the unemployed, in particular, demand we consider creative solutions above and beyond what is currently available to put these customers in the best possible position to sustain home ownership. We continue to evolve our home retention programs to meet the changing needs of our customers and to reflect the insights we are gaining through our experience in assisting our customers.”

According to the local Charlotte Observer, some experts say the plan could become an industry model and is the most substantial, creative approach yet to addressing the foreclosure fallout from stubbornly high unemployment.

©2010 DS News. All Rights Reserved.

California Tax Law Change Helps Short Sales

(Story Courtesy CAR legal)

4/13/2010

NO MORE STATE TAX ON FORGIVEN DEBT

Distressed homeowners no longer have to pay California state income tax on debt forgiven in a short sale, foreclosure, or loan modification. Enacted into law yesterday, Senate Bill 401 generally aligns California's tax treatment of mortgage debt relief income with federal law. For debt forgiven on a loan secured by a "qualified principal residence," borrowers will now be exempt from both federal and state income tax consequences. The existing federal exemption is for indebtedness up to $2 million, whereas the new California exemption is for indebtedness up to $800,000 and forgiven debt up to $500,000.

"Qualified principal residence" indebtedness is defined as debt incurred in acquiring, constructing, or substantially improving a principal residence. It includes both first and second trust deeds. It also includes a refinance loan to the extent the funds were used to payoff a previous loan that would have qualified.

The tax breaks apply to debts discharged from 2009 through 2012. Californians who have already filed their 2009 tax returns may claim the exemption by filing a Form 540X amendment.

Taxpayers who do not qualify for the above exemptions (e.g., second home or rental property) may nevertheless be exempt under other provisions. Most notably, taxpayers who are bankrupt are exempt from debt relief income tax. Also, taxpayers who are insolvent are exempt from debt relief income tax to the extent their current liabilities exceed current assets.

For more information about mortgage forgiveness tax consequences, go to California Franchise Tax Board's Mortgage Forgiveness Debt Relief Extended webpage and the Internal Revenue Service's Mortgage Forgiveness Debt Relief Act and Debt Cancellation webpage. The full text of Senate Bill 401 is available at www.leginfo.ca.gov.

It's Official - Hamp is Too Little - Too Late

Courtesy DSNews.com

A new poll by market research firm Harris Interactive provides some unpleasant numbers about the housing crisis and the collapse of the house price bubble. The company found that 24 percent of people with mortgages believe they owe more on the loan than their homes are worth.

The U.S. Treasury Department recently announced that it is expanding the administration’s Home Affordable Modification Program (HAMP) to provide some mortgage relief to underwater borrowers.

Participating servicers will be required to consider an “Alternative Modification Waterfall” in their evaluations, which includes writing down the principal for loans that are over 115 percent of the current value of the property. This alternative modification approach will include incentive payments for each dollar of principal write-down by servicers and investors.

But some market observers worry that the help may be too little too late for many struggling homeowners, since Treasury officials say “it will take time” – no earlier than the fall – before the new program enhancements are up and running.

We know you need a life preserver - Please wait 6 months and then we'll throw you one!

According to the Harris poll, nearly half of the borrowers who believe they are underwater say they are currently having difficulty paying their mortgage. Twenty-six percent report having “a great deal of difficulty.” Another 23 percent are having “some difficulty.”