Explaining the $8,000 Tax Credit

Congress has passed legislation granting a tax credit of up to $8,000 to first-time home buyers.

Let's see what it's all about. To qualify, you need to be a:

a) First-time home buyer purchasing a home between January 1, 2009 and December 1, 2009.

Clock is ticking!

b) A“first-time home buyer” may not (or their spouse) have owned a residence during the three years prior to the purchase.

b) Tax credit is only applicable on primary residences, including: single-family homes, condos, town homes, and co-ops.

c) The maximum amount allowable is $8,000. It is determined by the price of the home . Maximum credit is 10% of the purchase price up to $8,000.

d) Only buyers with maximum incomes of $75,000 for single persons or $150,000for married couples are eligible for the whole credit of $8,000

e) Buyers with incomes between $75,000 and $95,000 if they are single or between $150,000 and $170,000 if they are married couples filing jointly, may receive the tax credit, but its amount will decrease as the income(s) approaches the maximum limit.

f) Incomes over $95,000 for singles and $170,000 for couples will automatically disqualify buyers from getting this tax credit. (God forbid you make more than $170,000 in 2009! )

g) Beneficiaries of the tax credit need NOT to pay it back, but (there is always a but!) they must occupy the home for at least three years. If they sell it during the first three years, they will have to give it back at the time of the sale.

h) The tax credit can be used to pay closing costs.

i) U.S. Department of Housing and Urban Development has ruled that, in FHA loans, the tax credit can be used upfront. Accordingly, FHA approved lenders can develop bridge loans that would allow the coverage of closing costs, or buy down their interest rate, or increase down payment over the minimum 5 percent.

j) These bridge loans cannot cover the minimum 3.5 percent down payment.

k) Of course, there are other sources of assistance for buyers needing help with the 3.5 percent down payment, including state and local government programs and nonprofit lenders.

Henry B. Nathan is a Florida Realtor at United Realty Group Inc.

and a Florida Licensed Mortgage Broker.

Call me: (954) 296-6741

Or visit my website: http://www.condo-southflorida.com/

where you can also search for

Hallandale Beach Condos, Sunny Isles Condos,

Aventura condos

Why International Buyers are interested in Sunny Isles Beach, Florida Real Estate.

By Henry B. Nathan.

I have seen since 2002 an accelerated influx of international investments in these areas. Even in the tough time the US economy is going through, our country is still considered a safe refuge for capital and investment. US real estate continues to attract foreign investors from France, Germany, Holland, the UK, and many other European countries. Asian buyers are less conspicuous, but are seeing more of them lately. Russia n investors are an increasing factor and they have a preference for some specific areas. One of them is Sunny Isles. Some of the reasons:

View of the Pinnacle Condos, built in 1998

a) The Beach. For Canadian and Russians, the fascination of the ocean, the sun, and the sand is a never ending joy. For many Floridians, the proximity of the beach as an every- day luxury, has become a habit. We occasionally open our eyes on the infinite luck of walking a few blocks, or driving a few minutes and being able to wet our feet and walk with no shoes on soft sand, enjoy a slice of pizza and a beer on the boardwalk on almost every day of the year. But whoever has endured the long and freezing winter days, the absence of sunshine for weeks and months, the claustrophobia of short days and long nights behind walls, is usually happy just by enjoying the warm rays of a Florida sun, the shorts and T-shirts, the sandals, or a drink on a restaurant deck alongside the waterways. So, we can never ignore the "Beach Factor".

b) The lowest prices since the peaks of 2004 and 2005. Nobody can deny that, in comparison with real estate values in most countries of the developed world, Florida is a bargain. We are not talking Paris or London or Moscow. We are talking about even small town in those countries; even in Canada. And South Florida hasn't lost at all its appeal.

c) To the contrary, more and more entertainment venues, attractions and facilities, are available each year. Multiple centers of interest in Fort Lauderdale and Hollywood Downtown, alongside the Sunny Isles Beach stretch, the Hollywood Broadwalk, Surfside and Bal Harbour areas, South Beach, Miami Downtown, its Art and Design Districts, you name it. Sports spectacles are of a startling variety. Professional NBA Basket Ball, Hockey. NFL Football, Professional Baseball; Florida is home of famous teams and the daily possibility of assisting to great shows is amazing. Offshore fishing, lake-fishing, canoes on the waterways are another wonderful option. Biking and running on our shaded streets and our many parks. The fashionable areas of Lincoln Road and Ocean Drive in South Beach, as well as Fort Lauderdale's Las Olas Boulevard, draw young and older crowds, with their infinite selections of bars, restaurants, night clubs and discotheques. The Latino area of Little Havana is a joy to visit. Well, this is not supposed to be a tourism brochure.

d) The weak almighty dollar. The strength of Euros, Pounds, Canadian Dollars do not inspire a total confidence to their owners. There is always this sense of the "come back of the dollar" sometime in the future. Meanwhile these currencies can be stretched at a maximum by the foreign consumer. And Real Estate is now considered a good investment, compared to Stock Market and Bank deposits.

e) The possibility of an eventual move to this area. Many buyers from the Northern part of the US, Canadians, Latin Americans and Europeans have the dream of being able one day to move to Florida. It is very common for me to hear: "a vacation home for now, maybe a second home later on and, who knows? Perhaps a place to retire one day." And buying the dream while making a good investment is quite a good reason.



f) Sunny Isles is located at the North limit of Dade County and the South of Broward County. This optimal setting allows enjoying both areas with a minimum driving time. Right in the middle between Fort Lauderdale and Miami Airports, very close to the "chic" shopping area of Aventura, with Bal Harbour shops just around the corner.

Sunny Isles has drastically changed during the last decade. From a row of older motels and hotels, the land has been redeveloped in luxurious high-rise buildings alongside the beach and the Intracoastal. Many open- air shopping plazas on the west side of Collins Avenue are home to a multiplicity of bakeries, restaurants, stores, offices, bars and all kind of business venues. This has added to the beach attraction.

Personally, I love walking to some Russian food stores and order some exotic plates at lunch time, or have a fast dinner on an outside table at an Argentine Pizzeria, or enjoy an Italian Ice Cream sitting out on a warm and breezy night.

g) There is a variety of real estate properties for all buyers.

Talk about the more affordable buildings such as Ocean View Condos, the Ocean Reserve, or the Arlen House, the Winston Towers Condos, and the Plaza of the Americas, to the newer construction at the Porto Bellagio, across the street from the ocean, where we can offer very affordable properties.

At the middle range point, let's mention the King David, some of the Oceania buildings, or La Perla Condominiums, which is a brand new building on the beach. Up in values, the Oceania, the Sayan, the Sands Pointe, the Meridien, then the Millenium, the wonderful Pinnacle which has become a landmark with its pretty architecture, the Meridien and the Ocean Point Condo-hotels.

At the top, the Ocean series, with my favorite Ocean Two building, the various Trump Condominium buildings, and I prefer the new built Trump Towers. Acqualina, the Jade Beach and Jade Ocean, and the superb Turnberry Ocean Colony, are perhaps the jewels of the crown. This is just a short mention of the many options available.

If you are still not completely convinced, just talk a walk on Collins between 150 and 190th Street at any time of the year, and let me have your comments.

Henry B. Nathan is a real estate specialist in North Dade County, especially Sunny Isles, Aventura, and North Miami Beach.

For more information, please call me at

(954) 296-6741

or

We, at www.condo-southflorida.com are specialists in

Sunny Isles Beach Condos

Sunny Isles Real Estate

Aventura Real Estate

Aventura Homes

Aventura Condos

Bail-out blues

We have all read about the billions that our government keeps showering on failing banks, mortgage bankers, and GSE's (such as Fannie Mae).

The official explanation is that they "are too big to fail".

And, meanwhile, it's business as usual. Government "discovering" from time to time that CEO's and high-level executives are still pocketing bonuses and buying Lear Jets, while their troubled bank use the bailout money to buy out other more troubled financial companies and banks.

My opinion is that Federal Government should just let them fail, and take over their assets and liabilities, establish a Federal Trust fund, in the manner of the 1980's famous Resolution Trust, to market the thousands (or may be millions) of these properties, mortgages and securities.

It is a big tangle, for sure, and the Feds might not be completely up to the task. But it is surely a better solution than bailing out the predators while they continue to feast on the corpse of a broken economy, eventually giving them the power to recover and come back to haunt us with another bubble of a new kind and invention.

A Federal Trust would try to put some order in the massive amount of borrowers' failures, organize and streamline some restructuring of these loans, decide on eventual foreclosures, short sales, and perhaps even the renting of troubled properties to their present bankrupt owners, avoiding unnecessary foreclosures and evictions.

A few months ago, I wrote about an obnoxious case of aborted short sale. I couldn't understand the outcome, and I thought of stupidity, or fraud. I have read an article today that might clarify this case. It might not be fraud or stupidity. It might just be another case of greed.

Let me tell the story one more time:

I had sent an offer to a listing real estate broker, regarding a property that was offered at $ 239,000. My offer was $ 199,000. The broker indicated that the lending bank had previously refused much larger offers. The last one refused was $ 239,000. But that was months ago, and he thought that, in view of the continuous market deterioration, the bank would probably accept it. I so informed my customer and here started the long wait. After a few months of periodically contacting the listing broker who didn't manage to get a response from the Bank, one day something happened. I called the broker and he was very upset. He told me that the bank has canceled his listing, foreclosed on the property, put it up for sale with another broker, and sold it in a couple of days for $ 155,000, a lot less that what my client had offered. The broker was on the brink of crying in desperation and swore not to get involved in any more short sales.

You can imagine my indignation. That's how I started suspecting fraud or plain stupidity.
I even thought of writing to newspapers and agencies. I informed my Realtor association and they told me to write to my congressmen, which I did. There was, of course, no further news, and it was another buried case.

I am reading now in an article from The Bradenton Herald, on February 2nd, 2009, an article, written by a Florida West Coast attorney, that had enlightened me, or at least provoked some thoughts. Here it is:

Why the lender may not OK your short sale

By Cynthia Ridell

At Riddell Law Group, we focus on real estate matters primarily. Thus most of my time is spent negotiating workouts, shorts sales and defending foreclosures. In the course of my practice we have had many success stories. Many short sale transactions are being approved and closed these days in Sarasota and Manatee counties. In fact NAR (the National Association of Realtors) stated that “Pending home sales activity surged as buyers took advantage of low home prices and affordable interest rates.”

Much of these sales are short sales. But what about the short sale offers presented to lenders that do not get approved. Many of these offers are substantially more than what the lender may see a year from now when they receive a property back in foreclosure.

Thus when a short sale approval does not occur, the question posed by many borrowers, real estate agents and the like is: “Are the lenders just crazy?”

Well, it may not be the soundest fiscal response when a lender rejects a short sale offer at first glance. Or it may just be that the offer is an insufficient offer. But what about the offers that are substantial and can be corroborated through comparables? One must look further for the answer to this question; one must look to the Pooling and Servicing Agreement (PSA) that a particular loan is part of.

As many of us know, most mortgages were sold on the secondary market the “day after” closing and pooled with a group of mortgages held in trust as collateral for the issuance of a mortgage-backed security. Some mortgage-backed securities issued by Fannie Mae, Freddie Mac and Ginnie Mae are known as “pools” themselves. These are the simplest form of mortgage-backed security. These assets were pooled together so that Wall Street could package them as Mortgage Backed Securities. Each of the pools of mortgages are governed by this pooling and servicing agreement.

Most of the agreements have provisions for when an asset goes into default. The servicier, must elect to identify the asset as non performing and place it into the foreclosure process. Once this is done the servicer is now entitled to receive two times its servicing fees. It also opens up a multimillion dollar escrow fund that the servicer can reach to for payment of foreclosure attorney fees upfront. This may very well be the reason that borrowers that attempt a workout via short sale or a deed in lieu of foreclosure never get anywhere but foreclosure.

Another reason that the short sale process for approval stagnates is because of competing interests and private mortgage insurance at the investor level. Many of the securities sold have different terms for different beneficial interests or Tranche as they are known. Some are high risk with possible great returns and others are low risk conservative returns.

Investopedia defines a certain type of Tranche by writing: “A special type of bond class in a sequential pay collateralized mortgage obligation. This class of bond does not receive any interest or principal payments until all other Tranches have been completely paid off. In a Z-tranche, the interest that is not paid is accrued and added to the principal for future interest calculation purposes.”

Moreover, many of the more senior beneficial interests, or Tranches, may have mortgage insurance to look to for payment in the event of foreclosure. Thus for them a workout seems a moot point if they can look to insurance to make them whole. Whereas the lesser beneficial interests may not be able to look to insurance but rather a pro rata share of the proceeds from a sale. Thus within the pool there is conflict among the beneficial interests as to how to proceed: workout or foreclosure?

Cynthia A. Riddell, an attorney whose practice primarily focuses on real estate foreclosure, short sale and bankruptcy issues. is a member of the Florida bar and admitted to practice in the U.S. District Court for the Middle District of Florida. She practices in Sarasota, Manatee, Pinellas and Lee counties.

This clarifies somehow my confusion and perplexity. There might be an explanation for my aborted short sale, other than fraud or stupidity. It's all too familar:

GREED

It also make me start to believe that the way it's being done, this mess will be absolutely impossible to untangle. Can you imagine the thousands of package loans sold to foreign or American investors, hedge funds, and banks, serviced by multiple affiliated or non affiliated businesses, swapped, fractured and resold ad nauseam? Can anything but a centralized organization try to unravel and disentangle this disaster? And can we qualify the late and present actions of the creators of this catastrophe, other than plain, good-old, cold-blooded GREED?

Henry B. Nathan is a Florida Real Estate Professional. Please visit my website: http://www.condo-southflorida.com to search for

Florida Condos, Hallandale Condos, Aventura Condos, Hollywood Condos, Sunny Isles Condos

More on Davie and creativity in taxation

October 2, 2008,

I got the news that Davie’s Town Council has postponed a proposed ordinance on billing drivers involved in accidents, to cover the cost of police and fire-rescue.

The proposed fee is of about $ 940 per incident, including the cost of an independent contractor acting as the collection agency.

A decision on the subject is expected in two weeks.

The general outrage might have caused the delay.

I take it as a sign of our cities’ rebellion against their citizens’ decision to limit their unbridled spending. The modest reductions in property taxes gained so far by legislature rulings and constitutional amendments are gradually being upset by new charges and fees for services that are included in the normal function of our government and have always been covered by the taxes collected.

This kind of sneaky double-taxation has been going on for a while. But this new one is just too much.

Congratulation to Michael Mayo, whose article I just read in today’s Sun Sentinel.

For cash-strapped cities, crash fees could be just the start.

Michael Mayo - News Columnist - October 2, 2008

Accident response fees?

Brilliant. That's the proposal being kicked around in Davie.

Can't wait to see what cash-strapped local governments think of next.

In beachfront cities, how about lifeguard fees? Kayak rescue: $50. CPR: $500. Getting to swim another day: Priceless.

Or how about expedited fire response fees? A cool grand if you want a pumper truck to douse those flames within 10 minutes. Water, of course, would be extra.

Or how about public-meeting speaking fees? Something like $20 a minute. Hey, free speech is still free, but those microphones and cameras for your town's webcasts cost money.

Pardon my dripping sarcasm, but I'm ticked about this Davie plan, which got a thumbs-up on first reading last month and will be back on the Council agenda Oct. 15 after being tabled on Wednesday.

It's basically a city money grab on insurance companies by a third-party vendor, the Cost Recovery Corporation of Dayton, Ohio. According to CRC president Regina Moore, the company would get roughly 10 percent of the amount billed. The city would get the rest.

The proposed contract calls for at-fault drivers in accidents to pay for everything from the number of cops to the type of fire-rescue equipment called out to the scene.

It would even bill for the amount of time a police officer had to spend in court testifying as a witness ($80 an hour, according to the company's fee schedule).

According to the proposed ordinance, when "a no-fault declaration is made, the fee imposed may be proportionately charged to all drivers involved."

Ouch.

The fees would be billed to nonresidents and residents alike. Call me naive and hopelessly old-fashioned, but I always thought some municipal services were part of the civic compact, paid by tax dollars. Things like emergency rescue and police response to wrecks.

Welcome to government as user-fee capitalism, where a price will be put on everything.

"Where does it end?" Davie Mayor Tom Truex said Wednesday. At first, Truex supported a limited recovery fee plan for major accidents on major highways that run through Davie, like Interstate 595. But he opposes the broader plan.

"It's not a crash recovery fee," he said. "It's an accident tax."

Moore said the concept has been successful in many cities, encouraging safer driving and leading to a reduction in accidents.

Or maybe it just leads to an increase in unreported minor accidents.

She insisted that wasn't the case. She also insisted it wouldn't lead to hit-and-runs. She must not know South Florida very well.

A 2006 policy brief by the National Association of Mutual Insurance Companies called the fee "a form of double taxation" and criticized CRC for "employing aggressive and threatening tactics" to collect fees.

"Simply untrue," Moore said.

Moore said those responsible for accidents should pay for costly services they require. So why not charge swimmers who get caught in riptides for lifeguards?

"You're taking it to a complete extreme," she said.

No, that's taking this to its logical conclusion.

Don't like the direction things are headed? Write your local elected officials.

But if you want them to read your thoughts, that might be a $10 bifocal maintenance fee, please.

Henry B. Nathan is a Florida Real Estate Professional. Please visit my website to search for

Florida Condos, Hallandale Condos, Aventura Condos, Hollywood Condos, Sunny Isles Condos

The "Save -Our-Homes" unexpected effect

It was designed in 1992 to protect homeowners against excessive property taxes resulting of high increases in their market values.

In essence, if you are qualified and register your home as your “homestead”, the assessment value of your home cannot be raised more than 3% per year.

Let’s take an example:

You bought your home in 1999 and the Taxman appraised it at $ 200,000.

In 2006, its real assessed value is $ 400,000.

Meanwhile the property’s real taxable value went up at the maximum allowed rate of 3% per year.

Your tax notice indicates in 2006 $ 245,947.77 as the base taxable value. Your “Save our Home” protection has therefore saved you a lot of money.

In 2007 however, your property value went down it is now assessed at $375,000 instead of $400,000. You would of course expect a drop in your property taxes, right? Wrong.

Your 2007 tax notice will indicate a 3% increase in the taxable value, which becomes now $253,354.02. Consequently, you will pay more taxes in 2007 than in 2006, even though your home is worth less money.

Weird? Not if you are aware of the “recapture” rule adopted in 1995. The 3% increase will continue to apply every year, regardless of your property ‘s real value, until the taxable value and the real appraised value are equalized.

It means that, after a period of high raises in property values, a decade or more of flat values would progressively eat up most or all the savings that you had made through the “save our homes” protection. Eventually, you will end up losing it completely. Of course this is theoretical. But it is starting to happen and Florida homeowners are not happy.

The bizarre situation doesn’t affect the non-residents and all those who cannot take advantage of the “save-our-homes”.

Henry B. Nathan is a Florida Realtor at United Realty Group Inc.Visit my website: http://www.condo-southflorida.com/where you can search for Aventura Condos, Florida Condos,