This month's report is late since it takes a long time to slog through a 680 page Act of Congress--the Housing Bill. Although there are several provisions that will hopefully soften the effect of foreclosures and late payments, there some goodies for all.

TAX CREDIT-- There is a tax credit for anyone who has not owned a property in 3 years. Per couple this is a $7,500 credit/loan for anyone purchasing from April 9,2008 to July 1, 2009. When you file in 2009 for 2008, you subtract $7500 from the tax due, or add to the refund do you!!!!!!!If a couple earns over 150,000 or an individual earns over 75,000 there is a slight reduction in the credit. Starting with 2009 return due in 2010 you give back 1/15 of the credit each year until you sell when it is all due, except it cannot exceed your actual gain on the house.

NEWS YOU CAN USE RE: THE CREDIT

1 If you already closed, after April 9, Happy Birthday. You just won the lottery, or an interest free loan.

2 If 2 or more unmarried people buy a house, they split the credit.

3 It only applies to principal residences.

4 No one knows the exact answers because it just passed so the IRS hasn't seen any returns claiming it,

but the following seem to make sense:

(a) Keep your closing statement and all subsequent improvement bills as that MAY add to the "cost' of your house and limit or eliminate the "give back" when you sell; and

(b) If your income is near the limit above stated and you can defer some into January to prevent you from going over, it may help; and

(c) If one of a married couple has owned a house within 3 years and the other hasn't, you might want the house to be in just one name, if that one person can qualify for the loan, which we can help you discern; and

(d) Check your closing date if you are currently renting, but used to own--you don't want to close inside the 3 yr window if possible; and

(e) If you are a potential home buyer, just do it. This is as good as it gets.

THE DARK SIDE-SHORT SALE V FORECLOSURE--If the purchase price is less than the debt and the individuals are still in title, we have a short sale, i.e.

the sale is short of the debt. Structurally these transactions are no different a normal deal, except the seller is going to lose money and thus may be reluctant to fix the roof or toilet, etc. Further it is important that the attorneys work the numbers in advance of closing so that the seller doesn't find he needs thousands more than he anticipated and walk from the deal at the last minute.

If the lender, or their agent, owns the house subsequent to an order of court, it is a foreclose. The contract must list whomever is currently in title as the seller; you must have an experienced real estate attorney, not someone from your softball team who handles felony drug cases, as the issues of title can get strange.

Most importantly, steer clear of the "middle men" who wheedle their way into the deal and "buy" the property from a distressed seller, negotiate a discount from the lender, and then try to sell to you at a quick profit.

These short sale queens are actually acting as real estate broker without a license. Be afraid, very afraid.

THE DARK SIDE FOR REAL PEOPLE--The sellers of the above are real people who are losing their homes. Although some slicked-down TV pundit may say "they shouldn't've bought a house anyhow...", some of us want to reach out to those in need. If you know any one having a problem, have them call us.

Perhaps we can refinance them. If not we may be able to guide them through the lender thicket, AT NO CHARGE, so they don't make things worse, or go to someone who will.

This too will pass, but in the meantime there are legitimate opportunities, and scary stuff.