Tip of the Week: Unexpected IRS refund
If you receive an unsolicited email that appears to be from the IRS requesting that you file a “tax refund request,” do not fall victim to this identity theft scheme.
Numerous people are receiving unsolicited email informing them that a $9,390.55 IRS tax refund is due to them if they complete a tax refund request form. The email code will be forged to appear as if it originated from a trusted source, usually the IRS or an IRS tax preparer, but viewing the “message header” or “message source” will reveal its origin to be something else, and the link will not lead to a trusted domain, but one controlled by identity theft criminals.
If you file a tax return and a refund is due, you will automatically receive your refund. You will never be contacted by the IRS, and there is no tax refund request form. Never disclose personal information to any unsolicited inquiry, as compelling as the story may be.
If you have questions or concerns about any IRS tax refund you may have due, you should access the official IRS “Where’s My Refund” online application at the following destination: http://www.irs.gov/individuals/article/0,,id=96596,00.html.
California home sales rose for the third consecutive month in December, marking the highest level since January 2011, according to data from C.A.R. Sales also were up from a year ago, marking the sixth consecutive annual increase.
Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 520,940 in December, according to information collected by C.A.R. from more than 90 local REALTOR® associations and MLSs statewide. December’s sales were up 3.3 percent from November’s revised pace of 504,420 and were up 0.1 percent from the revised 520,330 sales pace recorded in December 2010.
The statewide median price of an existing, single-family detached home posted its second consecutive monthly gain, increasing 1.8 percent to $285,920 in December, up from a revised $280,960 in November. However, the median price was down 6.2 percent from the revised $304,770 median price recorded in December 2010.
Homeowners who had a mortgage loan on a primary residence and who believe were financially harmed during the mortgage foreclosure process by GMAC Mortgage, HSBC Finance Corporation, SunTrust Mortgage, or EMC Mortgage in 2009 or 2010 can request an independent review and potentially receive compensation.
The review is intended to determine if borrowers suffered financial harm directly resulting from errors, misrepresentations, or other deficiencies that may have occurred during the foreclosure process. The servicers are required to compensate borrowers for financial injury resulting from deficiencies in their foreclosure processes.
A number of servicers supervised by the Office of the Comptroller of the Currency (OCC) are also required to conduct independent reviews.
Borrowers are eligible for an independent foreclosure review if
- the property securing the loan was the borrower’s primary residence;
- the mortgage was in the foreclosure process (initiated, pending, or completed) at any time between January 1, 2009, and December 31, 2010; and
- the mortgage was serviced by one of the mortgage servicers listed here.
There are no costs associated with being included in the review; the review is a free program. Borrowers should beware of anyone who wants payment to assist with the independent foreclosure review or any other foreclosure assistance program.
Requests for review by the servicers’ independent consultants must be received by April 30, 2012. Borrowers are encouraged to carefully consider the information about the review program to determine if they are eligible to participate.
By Mia Lamar
Consumer expectations for U.S. home prices perked up in December, matching a modest fourth-quarter improvement in the U.S. economy, according to a monthly survey from mortgage market firm Fannie Mae.
For its December reading, Fannie Mae said survey respondents now expect home prices to rise by 0.8% over the next year, up from the 0.2% gain predicted in November.
Views on the direction of the U.S. economy also improved: 22% of respondents indicated a belief that the U.S. economy is on the right track, marking a 6-percentage-point jump from November’s survey.
On personal finances, 40% of respondents said they anticipate their personal financial situation to strengthen over the next year. Fannie Mae noted the response marks the first time since February that a larger share of respondents indicated they expect improved personal finances rather than finances that will remain the same over the next year.
Despite the marked improvement in consumer sentiment, Fannie Mae Chief Economist Doug Duncan cautioned that consumer attitudes remain at depressed levels, with over two-thirds over respondents in December’s survey still indicating a belief that the U.S. economy is headed in the wrong direction.
The survey is based upon a monthly poll of roughly 1,000 adults and has a margin of error of plus or minus 3.1%.
By Marcie Geffner
Bankrate.com, Scripps Howard News Service
Posted: 01/05/2012 05:05:42 PM PST
Updated: 01/05/2012 05:06:59 PM PST
Mortgage interest rates, near all-time lows, are likely to remain attractive throughout 2012. That means opportunities for new homebuyers and for homeowners who want to refinance.
Here are five reasons why you might want to get a new mortgage, and what you should know.
While depressed housing prices and low mortgage rates have made homes more affordable, economic uncertainty and volatile housing markets have discouraged so many homebuyers that mortgage purchase applications dropped to a 15-year low in August, the Mortgage Bankers Association reported.
In qualifying for loans, buyers face hurdles including a down payment and the ability to document at least two years of income, says Justin Lopatin, vice president of Baytree National Bank & Trust in Chicago. Income documentation can be hard for people who’ve suffered temporary unemployment, are self-employed or have irregular wages.
Many investors pay cash to purchase residential rental properties. But some take out a mortgage to increase their leverage, says Julie Miller, sales manager at Prospect Mortgage in Irvine, Calif.
Lopatin says low interest rates are an inducement for investment property buyers.
“If you can take out an investment loan at 4.5 percent and rent out (the property) and make a few dollars a month, annually, the return will be worth the loan,” he says. “Not to mention the tax write-offs and other advantages of owning real estate.”
insurance isn’t an option for investment property, so a fat down payment, typically 20 percent or more, is a must.
Investment buyers also need to show that they have enough income and reserves to afford the payments even if the tenant fails to pay the rent or moves out. Lenders typically will count 75 percent of the rent toward the borrower’s income-qualifying ratios, Lopatin says. For example, a monthly rent of $1,000 would count as $750 of income.
Low rates can make rate-and-term refinancing a smart financial move. This type of new loan is exactly what the name implies: a refinance in which the interest rate or term is changed, but the loan amount stays the same.
Another benefit might be locking in a fixed interest rate instead of an adjustable rate.
Homeowners who want to refinance must provide income documentation and have a “decent” credit score, to use Miller’s characterization.
Equity is also required for most loan refinance programs. This hurdle can be troublesome because homeowners don’t control a property’s market value, Lopatin says.
If your loan amount exceeds your home’s value, consider the Home Affordable Refinance Program, or HARP, part of the federal government’s Making Home Affordable initiative. If your loan is insured by the Federal Housing Administration, the FHA Short Refi program might enable you to refinance in a negative equity position.
A home equity loan or line of credit can be a good way to get cash for financial needs such as remodeling, major home repairs or financing a college education. The benefits, Lopatin says, include immediate cash, low-cost debt and potentially an income tax write-off.
There’s a catch: You can’t borrow against your equity if your mortgage debt exceeds your home’s value.
Taking out cash isn’t free money. In fact, a cash-out refinance increases your debt, which is “just not wise today,” says Alfred McIntosh, principal of McIntosh Capital Advisors, a financial planning firm in Los Angeles.
Co-signing a home loan for someone might sound like a feel-good proposition. But those warm fuzzies are the only benefit to co-signing.
“I see no reason why anyone should co-sign on anything for anyone, unless it’s a relative, because you’re putting yourself in a position to jeopardize your credit,” Lopatin says.
Miller sees “more negatives than positives” because the co-signer is equally responsible for the loan. If the borrower fails to make payments, the co-signer is on the hook.
Mortgage rates fell this week, reaching new record lows as investors seemed to ignore the latest signs of economic recovery.
The 30-year fixed-rate mortgage fell 3 basis points to 4.18 percent. A basis point is one-hundredth of 1 percentage point.
The 15-year fixed-rate fell 4 basis points to 3.4 percent. The average rate for 30-year jumbo mortgages, or generally for those of more than $417,000, fell 2 basis points to 4.62 percent.
The 5/1 ARM fell 1 basis point to 3.19 percent. With a 5/1 ARM, the rate is fixed for five years and adjusted annually thereafter.
(Reach Marcie Geffner at editors(at)bankrate.com. Distributed by Scripps Howard News Service)
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