Keeping you informed about Las Vegas NV. Real Estate & Mortgage industry

THE DIFFERENCE BETWEEN DELEGATED AND NON DELEGATED LOANS

Who makes the decision on a short sale and why is that vital to you?

The truth is quite shocking but about 68% of loans are owned – or at least insured – by the federal government, through Fannie Mae & Freddie Mac, all other loans are owned by Wall Street Firms, Hedge Funds, Pension Funds and other investors.

Why is that so important? Because most of the loans owned by the federal government are NON DELEGATED LOANS. What that means to you? The bank cannot make a decision on the short sale but has to submit the entire package to the government agencies for the approval and that translates to you in what?????????????? Way longer waiting period before closing, sometimes several months.

A DELEGATED LOAN, in the other end, is a loan owned by the bank that service it or by a private investor and – generally speaking – if the offer is no lower than 8% to 10% of the appraised value, the bank negotiator can make the decision and approve or deny the sale without consulting the investors or the bank assets manager.

What that means to you??????????? It means you’ll have a response on your short sale offer way, way quicker.

Here the links to find out if Fannie or Freddie they own your mortgage

https://ww3.freddiemac.com/corporate

http://www.fanniemae.com/loanlookup

Thanks for reading this, and always please contact me for all your Real Estate needs and as a token of my appreciation to you for visiting my site, please click here for your FREE, NO OBBLIGATION, NOTHING TO BUY, chance to win $ 1,000.00 certificate!

Do not forget to contact us, we will be there to answer all your questions and walk you thru, safe and sound, today’s difficult Real Estate market.

I Hope this info is of help, if so, please FOLLOW US ON TWITTER  LINKEDIN and on FACEBOOK

 

I don't have much experience with blogging, so please be kind and provide me with constructive criticism, where you can, to help me improve the form and content.

DISCLAIMER: I am not a CPA or a lawyer, so make sure to consult your professional advisors.This and all articles in this blog are intended to provide general information only, this is not intended to be a tax or legal advice and you should always consult with your own accountant, attorney and trusted advisors to discuss your specific situation, goals, rights and options.

Posted by Michelangelo Liotine on January 12th, 2012 11:39 AM

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June 16th, 2011 8:32 AM

Just peeping at your credit report is USELESS!!!!

Here the FIVE credit report errors you MUST FIX!!!!

 

In a recent study, 19 percent of American consumers who reported finding an error in their credit reports opted not to dispute the error, even when they were offered $5 to file the dispute!  Why not?  Well, some said they thought the error was too minor to impact their score, while others said the dispute process seemed too difficult to tackle.

The fact is, when you’re trying to qualify for a home loan, some of the items on your credit report that can pose a threat to your home finance plans might surprise you. Here are 5 surprising credit report entries you absolutely must fix, especially when you are in the process of buying or refinancing a home.

 

1.     Account balances you recently paid down or off.

 

 If you’ve just finished paying a bill down or off, you might not dispute the elevated balance that remains on your credit report because it’s not actually an error, per se.  But the whole point of paying the balance down was to bring down your credit utilization ratio, which is a heavily weighted factor in your overall credit score.  

Correcting the actual balances of your outstanding bills downward to account for your recent pay-down efforts poses such a large potential improvement impact for your credit score that it might even be worth paying your mortgage professional the $30 to $50 it will cost for them to initiate a Rapid Rescore, which can update your reports to reflect your slimmed-down balances in about 72 hours, compared with the 30 to 60 days you’d expect to wait to see results from a traditional dispute or update.

 

2.     Incorrect former addresses. 

 

Of the 19 percent of consumers who spotted an error on their report in the study, nearly 40 percent of those errors were in what the credit bureaus call “header data," things like the consumer's previous street address. Many elected not to dispute these sorts of line items because the error doesn't seem like it would impact their credit score.  While an inaccurate address might not have much to do with your score, it can still wave a red flag, signaling issues that can foul-up your mortgage application.

A misspelling in an otherwise correct street name should not cause you grave concern.  But if the previous addresses listed are in the wrong city or state, or otherwise come out of nowhere, they might signal that someone has used your name and/or social security number to obtain credit at a different address.  Credit card fraud and identity theft are difficult to unravel when you’re not seeking credit; they are much more complicated to resolve when the credit stakes are high and the underwriter as picky as they are in the course of applying for a mortgage.   

Also, current and previous addresses that conflict with where you’ve told the lender you live(d) can raise suspicion that you might be buying a second or rental home, rather than the owner-occupied home you say you’re trying to buy; that can provoke a lender to demand that you ante up more down payment dough, make you jump through greater hoops to prove your true address or even stop you from qualifying for the loan altogether.

 

3.     Bills that were never yours in the first place. 

 

As with completely bizarre former addresses, accounts listed on your credit report that you never opened in the first place can be a red flag that tips you to the fact that someone else might have stolen your identity and opened a credit card or account in your name.  If you find one of these items on one credit bureau report, but it’s currently closed or has a zero balance, you might be tempted to let it slide, thinking it can’t move the needle on your credit score.  In reality, though, if someone is using your identity to obtain credit and you fail to dispute that the bills belong to you, they might continue to use it, which can cause you real problems.  Of course, if the bills weren’t paid on time or have been placed in collection, disputing the accounts’ presence on your credit report is a must.  

If they were paid on time every time, though, the analysis might be different.  Unfortunately, instituting a fraud-based credit freeze or fraud alert on your credit reports at the same time as you’re applying for a mortgage can complicate your own loan qualification process significantly.  If you find yourself in this situation, carefully scrutinize the rest of your report and the credit reports you receive from the other bureaus to detect whether other fraudulent accounts exist, then consult with your mortgage professional on exactly when and how you should go about disputing the accounts which weren’t actually yours.

 

4.     Limits listed as lower than they really are.

 

As with closed accounts that were never yours in the first place, accounts that are listed on your credit report as having limits that are lower than they really are might seem like a battle not worth fighting.  But the fact is that only two inputs go into the credit utilization ratio that comprises about 30 percent of your FICO score: how much credit you have available, and how much credit you have used.  So, if you have account balances that show up on your credit reports as lower than they actually are (i.e., that you have less credit available to use), that inaccuracy can skew your credit score and screw up your mortgage qualifying efforts. Big time.

 

5.    Derogatory items that should have aged off. 

 

Very few of us are perfect, and you might have worked hard to pay your bills on time in an effort to overcome a credit ding from back in the days.  Although the impact a derogatory item has on your credit score wanes over time, it’s still your right (and your responsibility) to make sure negative items disappear from your credit report when they are supposed to – that’s 7 years for a late payment, 10 years for a bankruptcy.  If you are still seeing credit dings on your report after more than the relevant time frame has elapsed, dispute them and claim the rehabbed credit (and score) you’ve since earned.

 

It’s not very common that credit report disputes cause dramatic changes in credit score, but again, many borrowers aren’t disputing these sorts of items they don’t realize could make a difference in their homebuying or refinancing prospect.

  

Beyond that, if you’re close to a credit tier cutoff, like 620-640 or 740-760, depending on your loan type, even a few points’ difference can be the difference in qualifying for a home or not, or paying a higher mortgage interest rate for the life of your loan.  For these reasons, it behooves every potential borrower to be proactive in spotting and correcting these 5 must-dispute errors.

 

Thank you for reading my blog and as a token of my appreciation to you for visiting my site, please click here for your FREE, NO OBBLIGATION, NOTHING TO BUY, chance to win $ 1,000.00 certificate!

In addition, I strongly invite you to live comments to this or any of my past or future articles!


Do not forget to contact us, we will be there to answer all your questions and walk you thru, safe and sound, today’s difficult Real Estate market.

I Hope this info is of help, if so, please FOLLOW US ON TWITTER  LINKEDIN and on FACEBOOK

I don't have much experience with blogging, so please be kind and provide me with constructive criticism, where you can, to help me improve the form and content.

DISCLAIMER: I am not a CPA or a lawyer, so make sure to consult your professional advisors.This and all articles in this blog are intended to provide general information only, this is not intended to be a tax or legal advice and you should always consult with your own accountant, attorney and trusted advisors to discuss your specific situation, goals, rights and options.

 
Posted by Michelangelo Liotine on June 16th, 2011 8:32 AM

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"BORROWER TAX LIABILITIES REGARDING LOAN MODIFICATIONS, FORECLOSURES AND SHORT SALES."

(PART TWO)

LET'S GET TECNICAL

 

AND NOW THAT WE UNDERSTAND ABOUT DEFICIENCY JUDGEMENT,

LET'S GET TECNICAL

First thing first, AS ALWAYS, the legal stuff!

DISCLAIMER: I am not a CPA or a lawyer, so make sure to consult your professional advisors.

This article is intended to provide general information only, this is not intended to be a tax or legal advice and you should always consult with your own accountant, attorney and trusted advisors to discuss your specific situation, goals, rights and options.

That said, grab a cup of coffee, and hang on tight …

The tax consequences on a LOAN MODIFICATIO, SHORT SALE OR FORECLOSURE,arise from the fact that the IRS considers the amount of the debt that you didn't repay as income to you. For example, if you owe $100,000, and the lender accepts a payoff of $50,000 in a short sale, then the lender has canceled

$50,000 of your debt. The IRS would say that you have $50,000 in income.

(NOTE: If the lender gets a deficiency judgment against you, then they cannot also claim a tax loss for the same amount. They have to choose one or the other.)

It’s important for you to know that the lender cannot pursue a deficiency judgment and issue a 1099. They can only do one or the other, not both. In other words – you either have to worry about a deficiency judgment or taxable cancellation of debt income, but not both. If it turns out that your worry is a deficiency judgment, bankruptcy may be an option to explore with your attorney,to discharge the judgment. And there are certainly other options to consider including negotiating payments, a reduced amount or some other arrangement.

If the sale was of your primary residence, then you may be exempt from paying taxes

on the gain thanks to President Bush and the Mortgage Debt Relief Act of 2007. From

the IRS website: "The Mortgage Debt Relief Act of 2007 generally allows taxpayers to

exclude income from the discharge of debt on their principal residence. Debt reduced

through mortgage restructuring, as well as mortgage debt forgiven in connection with

a foreclosure, qualifies for the relief. This provision applies to debt forgiven in calendar

years 2007 through 2012."

However, if you are not able to exclude the income through the Mortgage Debt Relief

Act (for example if the property was not your principal residence), then you may have

to pay taxes on the gain, even though you did not receive any money. That is why it is

referred to as a "phantom gain".

If your home was worth over $100,000, then the $50,000 income would be

considered "capital gains". If the home was worth less than $50,000, then the income

would be considered "cancellation of debt" income (COD Income). If your home was

worth between $50,000 and $100,000, then part of the income would be considered

capital gains, and part of the income would be considered COD Income. For example,

if the fair market value of the home was $80,000, then you would have $30,000 in

capital gains and $20,000 in COD Income.

The IRS knows about your phantom gain because the lender sends them a form called

a 1099-C, which shows the amount of canceled debt income. On that form, the lender

states what they think the fair market value of the home is. That number is not set in

stone. You can use a different value when filing your taxes. But you need to justify the

value that you select, for example by including comparable sales from the area. Include

a note explaining what you did and why.

In many cases, the lender will fail to send out the 1099-C. In that case, you still have to

report the income, but you have more discretion in determining the fair market value.

Of course you still need to justify the value that you select.

In most cases, it is to your advantage to treat the income as COD Income, because you

can often qualify to get the tax on the COD Income waived. However, if you do not

qualify to get the COD Income waived, then you will probably pay less in taxes if the

income is treated as capital gains (assuming you owned the property for more than

365 days, which makes it "long term" capital gains).

HOW DO I GET CANCELLATION OF DEBT INCOME WAIVED?

If you are not able to exclude the COD income through the Mortgage Debt Relief Act,

then there are 3 primary ways or "exceptions" that allow you to get COD Income

waived.

1 - Insolvency Exception

If you are insolvent, then you do not have to pay taxes on the COD Income.

Insolvency means that your debts are greater than your assets, or in other words, you

have a negative net worth. When using the Insolvency exception, you can only get COD

Income waived "to the extent that your liabilities exceeded the fair market value of

your assets immediately before the cancellation." For example, if you had $50,000 in

COD Income, and your net worth was zero before the COD Income, then you would get

100% of the COD Income waived, but if your net worth was $20,000, then you could

only get $30,000 of the COD Income waived.

To claim insolvency, include IRS Form 982 when filing your taxes.

2 - Qualified Real Property Debt Exception

To qualify for the Qualified Real Property Debt Exception, you have to meet all of the

following:

1. The property must have been used in a trade or business (not a primary

residence or passive "investment"). This is a pretty gray issue, but if you have

Important Real Estate Info: Tax Consequences of a Short Sale, Foreclosure, or Deed in Li... Page 3 of 5

http://importantrealestateinfo.blogspot.com/2009/04/tax-consequences-of-short-sale.html 10/17/2009

some activity relating to the property then it can probably be considered a trade

or business. It doesn't have to be a real estate trade or business. As a landlord

you can be considered to be in a trade or business if you were actively involved

in the management of the property.

2. The debt must be secured by real property, and the debt has to be recorded

("perfected").

3. You must make the proper election on IRS Form 982 when filing your taxes,

and it must be filed with the original income tax return relating to the COD

Income.

4. You must have used the debt to acquire, construct, or improve the property. If

you refinanced and pulled out money for something besides the property, then

you can't use this exception.

5. The maximum amount you can exclude is equal to the LESSER of either:

1. Your tax basis in the property (So if you've been depreciating the

property for many years, then you might not be able to exclude much of

your COD Income through this exception.)

2. The balance of the debt less the fair market value of the property secured

by the debt. (For example if you owe $100,000, and the fair market value

of the property is $80,000, then you could only exclude $20,000 of COD

Income.)

If this exception gives you a partial reduction in tax liability, you can still use other

exclusions to further reduce your liability.

To claim the Qualified Real Property Debt Exception, include IRS Form 982 when

filing your taxes.

3 - Bankruptcy Exception

If you get debt discharged as part of a Bankruptcy, you do not owe taxes on that debt.

Claw Back

In each of these three exceptions, the IRS wants to be paid back for the amount of the

"discharge of indebtedness" (the amount that you didn't have to pay taxes on). They

call this "claw back". It means that the IRS requires you to look for a way to reduce

your other tax deductions to make up for not paying taxes on the COD Income. Some

examples of "claw back" would be reducing the tax basis on the property, reducing the

tax basis on another property, taking away passive losses, or taking away other losses

on your return. If none of these options are available, then the IRS may not be able to

get any "claw back".

You can see more details in IRS Publication 4681.

Hopefully this helps clear things up somewhat, but obviously the tax consequences of a

short sale, foreclosure, deed in lieu of foreclosure, or even a loan modification are

fairly complex. As always, make sure to consult your tax professional.

 

 

 

I don't have much experience with blogging, so please be kind and provide me with constructive criticism where you can to help me improve the form and content.

The best compliments I can receive are your referrals! Please feel free, you and anyone you know, to contact me 24/7 for all your Real Estate and Mortgage need!!!!!!!!!

If you need help or assistance email me at Info@LasVegas2Sell.com  or call me direct at (702) 528-6422,  I will be more than glad to help and advise you.

DISCLAIMER: I am not a CPA or a lawyer, so make sure to consult your professional advisors. This article is intended to provide general information only, this is not intended to be a tax or legal advice and you should always consult with your own accountant, attorney and trusted advisors to discuss your specific situation, goals, rights and options.

 

Posted by Michelangelo Liotine on May 15th, 2011 9:03 AM

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Bankruptcy, foreclosure, short sale, and loan modification. Pros, Cons & Tax liabilities.

PART ONE...... THE DEFICIENCY JUDGMENT

IT IS A JUNGLE OUT THERE! Let me bring some light into the short sale, foreclosure, bankruptcy, and loan modification deep-dark night, and how each one of them will benefit or hurt you. All of the above will affect your credit score and/or have tax consequences.

DISCLAIMER: I am not a CPA or a lawyer, so make sure to consult your professional advisors.

This article is intended to provide general information only, this is not intended to be a tax or legal advice and you should always consult with your own accountant, attorney and trusted advisors to discuss your specific situation, goals, rights and options.

That said, grab a cup of coffee, and hang on tight …

First, let me state something: NOTHING AND NOBODY CAN STOP FORECLOSURE. IT CAN ONLY BE DELAYED!

Let us understand clearly, what a foreclosure is and the timing of it, this will make easier to understand all the rest of this very complicated subject.

Lenders will file, usually after the 2nd. or 3rd. late, (may be more in today’s market) a Notice of Default and Election to Sell (N.O.D.) to protect their interests. From the moment the N.O.D. is recorded the borrower will have 35 days to reinstate the loan and after that the loan will be due and payable in full till the Trustee Sale. That usually will occur within four/five months from recording. (Please contact me if you wish to receive a detailed chat explaining in detail the process).

And here the fun really begins!!!!!!

If, at the trustee’s sale, the trustee is not able to sell the house for the outstanding debt/loan on the house, then the beneficiary has the option of seeking a deficiency judgment against the borrower. That means that the lender could sue you for their losses, and get a judgment against you for that amount. Then they could pursue the judgment through standard collection procedures such as attempting to garnish your wages.

Notice, I said, “could” a deficiency judgment.

A deficiency judgment is not automatic and bank are very reluctant to pursue that route since is a very expensive one. The beneficiary must file a complaint in a Nevada district court within 6 months of the trustee’s sale asking the court for a deficiency judgment for the balance remaining due. In this lawsuit, the trustee must serve a summons on the borrower (now defendant) just like any other lawsuit. The defendant must file an answer disputing the fair market value of the property sold.

Before awarding a deficiency judgment, the court shall hold a hearing and shall take evidence presented by either party concerning the fair market value of the property sold as of the date of the foreclosure sale or trustee’s sale. If the court finds the debt is more than the fair market value of the property, it may enter a judgment of deficiency against the borrower/defendant. That is the so called “deficiency judgment.”

A new law regarding deficiency judgments (that will make lenders even more reluctant to follow that route), has taken effect for deeds of trust on owner-occupied houses financed after October 1, 2009. This law will help eliminate deficiency judgments under specific circumstances. I will write more about that in a future article.

Posted by Michelangelo Liotine on March 8th, 2011 10:05 AM

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February 23rd, 2011 10:36 AM

Strategic Default- When Homeowners Run Away From Their House

Marathon Use
Why Some Homeowners Choose to Abandon

While the Obama administration’s housing policy has been largely influenced by a study of the Boston housing market during the 1990-91 recession in which homes devalued by approximately 20 percent, new research suggests that a novel phenomenon is at hand in the fallout of today’s more severe housing crisis – strategic default on mortgage loans. Given that homes in numerous parts of the country have lost more than 30 to 40 and someplaces 50 or more percent of their value, many homeowners say they would simply walk away from their loans – without fear of repercussion.

A new paper, entitled ‘Moral and Social Restraints to Strategic Default on Mortgages,’ looks at American homeowners’ propensity to default when the value of a mortgage exceeds the value of their house, even if they can afford to pay their mortgage. By using new survey data, the paper estimates that more than a quarter of defaults on mortgage loans are strategic, especially when home values have fallen by more than 15 percent.

The new research was led by Paola Sapienza (Kellogg School of Management at Northwestern University) and Luigi Zingales (University of Chicago Booth School of Business) – co-authors of the quarterly Chicago Booth/Kellogg School Financial Trust Index – as well as Luigi Guiso (European University Institute). With data collected from surveys conducted within the last six months as part of the Financial Trust Index, this paper is the first to examine the economic and moral implications of strategic default in the current recession.

Negative Equity

The study of the Massachusetts housing market during the 1990-91 recession found that very few people who could afford their mortgage chose to walk away from their homes. Consistent with the earlier paper, this new research shows that homeowners refrain from defaulting as long as negative equity does not exceed 10 percent of the value of the home.

After that level, however, the researchers found that homeowners start to default at an increasing pace, and walk away massively after decreases of 15 percent and more. In fact, 17 percent of households would default, even if they can afford to pay their mortgage, when the equity shortfall reaches 50 percent of the value of the house.

‘Housing policy under the current administration has focused on reducing households’ cash flow problems in response to the housing crisis, but no one has addressed the negative equity issue as part of public policy regarding housing,’ said Sapienza ‘We’re in a completely different economic environment today, where for the first time since the Great Depression millions of Americans have mortgage loans that exceed the value of their home.’

Moral and Social Factors in Strategic Default

According to the researchers, moral and social variables play a significant role in predicting strategic default. People surveyed who said it was immoral to default were 77 percent less likely to declare their intention to do so, while people who know someone who defaulted were 82 percent more likely to say they would default themselves.

‘The most important barriers to strategic default seem to be both moral and social,’ said Zingales. ‘Our research showed there is a ‘multiplication effect,’ where the social pressure not to default is weakened when homeowners live in areas of high frequency of foreclosures or know others who defaulted strategically. In fact, the predisposition to default increases with the number of foreclosures in the same ZIP code.’

‘Factors such as age, location, political affiliation and attitudes toward government intervention also impacted respondents’ responses to the morality of strategic default,’ he added.

Specifically, the researchers highlighted the following data:

– People under the age of 35 and over the age of 65 were less likely to say it was morally wrong to default compared to middle-aged respondents.
– People with a higher education (eight percentage points) and African-Americans (14 percentage points) are less likely to think it
is morally wrong to default, whereas respondents with a higher income are more likely to think it is morally wrong.
– Default is considered less morally wrong in the U.S. Northeast (six percentage points) and West (8 1/2 percentage points).
– There was little difference in the moral view of strategic default among Republicans and Democrats, but Independents were less likely to say defaulting is immoral.
– Respondents who supported government intervention to help homeowners were 12 percentage points less likely to say strategic default is immoral.

Posted by Michelangelo Liotine on February 23rd, 2011 10:36 AM

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Can you risk jail by doing a short sale? The answer is

 

YES!

 

BEWARE MY FRIENDS, F.B.I. and BANKS are going after short sales ARM LENGH TRANSACTIONS!

Do not play with the fire!

 

 

I had few friends and clients that asked me, in the past few days, about arm length transaction in a short sale, what they are, and how they can be affected.

What is an Arm’s Length Transaction?

By definition is a transaction in which the buyers and sellers of a product (Real Estate in our case) act independently and have no relationship to each other. The concept of an arm's length transaction is to ensure that both parties in the deal are acting in their own self-interest and are not subject to any pressure or duress from the other party.

 

 

So what that exactly means for buyers, sellers and brokers as well, involved in at short sale transaction? It means that HUD/FHA/VA, Fannie Mae, Freddie Mac & FDIC do not want to see anyone obviously taking advantage of their financial disadvantage.

Lenders and investors will not tolerate a “Bail-Out” situation that allows the distressed homeowner to benefit from their loss.

People do not sell to Uncle Joe or your best friend in order to stay in the house or buy it back at a later time! YOU ARE LOOKING FOR TROUBLES!

 

BANKS ARE MAKING YOU SIGN THE  "ARMS LENGTH TRANSACTION" AFFIDAVIT, and are now carefully auditing short-sale transactions going forward and are also looking at previous closed short-sale settlements that may have been considered non-arm's length transactions.

The specific language could be included in the short-sale approval letter itself or may be a totally separate agreement all together (such as in the form of an Affidavit) and can read something to the following effect:

“Whereas, all parties relevant to this transaction are hereby indicating to XYZ Mortgage Corporation that no party to this contract is a family member or business associate or shares a business interest with the mortgagor(s) or mortgagee. It is further stipulated there are no “hidden terms” or “special understandings” between the seller(s), buyer(s) or their agent(s) in order to entice, induce or otherwise defraud the seller’s mortgagee in this transaction. This purchase contract is not assignable. If the purchaser intends on performing a simultaneous closing (aka flip) such a transaction can take place only if the re-conveyance is of equal or lesser value as to the current sales price indicated in this transaction. The Buyer(s) & Seller(s) nor their Agent(s) listed below have any agreements (written or implied) that will allow the Seller(s) to remain in their property as renters or to regain ownership of said property after the successful execution of this short sale transaction.”

 

 

The above verbiage is pretty self explanatory and if these stipulations are non-issues for your particular deal than you should be fine. However (if you have to think twice about this) you need to be very careful and think twice before you sign such a document and go on with the sale!

I do not want to sound like the devil, but......... is it worth to take the chance?

In simple words.... Sell, Move out and go on with your life!

 

Thank you for reading my blog and as a token of my appreciation to you for visiting my site, please click here for your FREE, NO OBBLIGATION, NOTHING TO BUY, chance to win $ 1,000.00 certificate!

In addition, I strongly invite you to live comments to this or any of my past or future articles!


Do not forget to contact us, we will be there to answer all your questions and walk you thru, safe and sound, today’s difficult Real Estate market.

I Hope this info is of help, if so, please FOLLOW US ON TWITTER  LINKEDIN and on FACEBOOK

I don't have much experience with blogging, so please be kind and provide me with constructive criticism, where you can, to help me improve the form and content.

DISCLAIMER: I am not a CPA or a lawyer, so make sure to consult your professional advisors.This and all articles in this blog are intended to provide general information only, this is not intended to be a tax or legal advice and you should always consult with your own accountant, attorney and trusted advisors to discuss your specific situation, goals, rights and options.

 

 

 

Posted by Michelangelo Liotine on January 31st, 2011 9:02 AM

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Hello to all,

I got many of my clients and friend asking many questions about  my last article regarding Nevada Domestic Assets Protection Trusts (D.A.P.T.)

One of the most frequent was... Do I need to be a Nevada resident in order to set up a DAPT? The answer is yes and no. Why? According to N.R.S. 166 , at least one of the trustees must be a Nevada resident, so if you are not ....... we have a problem!  Here the solution.... We can legally have two type of trustee

1) You (the non resident) can be the managing trustee, because you want to stay in control of the assets that are bought and sold by the trust.

2) The "blocker" distribution trustee (I will talk about more in a different article) must be a Nevada resident, (it can be a friend or relative) a Nevada trust company or bank. Trust companies and banks can be expensive and charge annual fees. If you don't want to hire a trust company or bank, and you don't know anyone that is a Nevada resident that could serve as the blocker trustee, well .......... Sayonara, Au revoir, Arrivederci and Hasta la Vista..... you are out of luck!

Now, as I stated in my previous article regarding the Assets Protection Trust, I strive to provide the best possible service to my client and friends and, to keep up with my strive, I recently met with a very well known lawyer here in Vegas and learn from him all I am posting.

Please do your own research, Google Nevada or Las Vegas assets protection attorneys or any other search words you feel comfortable and consult with one of the attorneys or expert you Googled.

Thank you for reading my blog and as a token of my appreciation to you for visiting my site, please click here for your FREE, NO OBBLIGATION, NOTHING TO BUY, chance to win $ 1,000.00 certificate!

In addition, I strongly invite you to live comments to this or any of my past or future articles!


Do not forget to contact us, we will be there to answer all your questions and walk you thru, safe and sound, today’s difficult Real Estate market.

I Hope this info is of help, if so, please FOLLOW US ON TWITTER  LINKEDIN and on FACEBOOK

I don't have much experience with blogging, so please be kind and provide me with constructive criticism, where you can, to help me improve the form and content.

DISCLAIMER: I am not a CPA or a lawyer, so make sure to consult your professional advisors.This and all articles in this blog are intended to provide general information only, this is not intended to be a tax or legal advice and you should always consult with your own accountant, attorney and trusted advisors to discuss your specific situation, goals, rights and options.

Posted by Michelangelo Liotine on January 26th, 2011 12:14 PM

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 Don't get busted! You have rights

 

As you all know, I strive to provide the best possible service to my client and friends and, to do so, I have to keep myself informed, adjourned and be knowledgeable in many fields connected to the real estate and law, by all means, is one of them.

So..... to keep up with my strive, I recently met with a very well known lawyer here in Vegas and learn from him something that I was totally unaware of, like most of us.

What that is? Is how to protect our naked assets from our creditors!

What that means? What is NEKED ASSETS?

NEKED ASSETS is our hard-earned CASH, CARS, REAL ESTATES and so on and so forth… and what that means is, how to protect them, NOW AND IN THE FUTURE, from our creditors!

Now, we all know, or at list most of us do, about Homestead our home against unsecured debt and that I.R.A.’s, 401 K’s, pensions etc. etc, are exempt from execution, in addition to all items listed in the N.R.S.21.090 but very few knows about the N.R.S. 166 also known as Spendthrift Trust or (DAPT)

Let’s step back one second here. Because of the real estate turmoil and the properties value going down the drain we all are, (or at list know someone that is) facing what I call “THE DILEMMA”…… What should I do with my underwater property? Well, I am not going to answer that question in this article.

What I will talk about is what to do with the necked assets you may have and that the banks, creditors or collection agencies can go after in case you decide to foreclose or short sale. You may think to create an L.L.C. or to give your assets as a donation to someone you are related to or friend with. Wrong, totally wrong, your creditor can still come after you (even if your L.L.C. is set in the Cayman Island L.O.L.) and you most likely will stand the chance to spend a nice chunk of time in a colorful State Facility! (If you know what I mean!)

Here where the self settled spendthrift trust, or domestic asset protection trust (DAPT) comes in place.

This particular trust has nothing to do with a probate trust, but actually can work in conjunction with it if you so wish and Nevada was one of the first states to pass legislation regarding it.

In general, NRS 166 permits individuals to protect assets from the reach of their personal creditors and still derive personal benefit from such assets by transferring them into a trust where at least one of the trustees is a Nevada resident, Nevada bank or Nevada trust company, and where the settlors are not authorized to make distributions back to themselves. Assets are then shielded from the reach of the settlor’s personal creditors once a specific seasoning period has run.

Here the basics on how all works directly from N.R.S.166:

· There is a two-year statutory seasoning period, once the two-year period has passed, the assets held in trust are protected from creditor reach. Creditors also have six months from the time of discovery or reasonable discovery to bring legal action against a transfer into trust; however, NRS 166 provides that creditors shall be deemed to have discovered the transfer once the transferor publicly records the transfer with the county recorder or files a financing statement with the Secretary of State.

· Settlor can serve as trustee: the law makes clear that not only can a settlor of a self-settled spendthrift trust serve as a trustee, but it also explicitly provides that a settlor-trustee can hold and exercise any other power under the trust, including the power to remove and replace a trustee, direct trust investments and execute other management powers. Moreover, the language in the statute allows a settlor-trustee to even make a distribution to himself, provided another person consents to such distribution. (Mom, dad, ….)

· Fraudulent transfer requirement: Under NRS 166, for a creditor to bring an action against a transfer of property to a Nevada self-settled spendthrift trust, the creditor must prove (good luck trying to do that), the transfer was either Fraudulent Transfer or “otherwise wrongful as to the creditor.” Furthermore, if a creditor proves the transfer of a certain asset to be fraudulent (again, good luck trying to do that), that proof does not provide blanket evidence as to all other transfers or for all other creditors. Each creditor must make his own case for each asset.

In simple words, no one can touch your assets after two years the same are under the trust, and even in the improbable case a creditor comes after you the day after you move your assets under the trust, chances are that your lawyer can stretch the case passed the two-year mark. You can put your cash under the trust and distribute the money to yourself as long a third party under the trust consents to it in writing. (Your relative or a friend writes a yearly letter to be kept on file, authorizing the distribution).

Now don’t waist any time, Google Nevada or Las Vegas assets protection attorneys and start your trust NOW even if you don't think you need one! (Consider it like your best insurance plan for the future!) or, at list, consult with one of the attorneys you Googled. I wish I knew about this law years and years ago!!!!!!!

As always.....

Professionally Yours, Michelangelo

 

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In addition, I strongly invite you to live comments to this or any of my past or future articles!


Do not forget to contact us, we will be there to answer all your questions and walk you thru, safe and sound, today’s difficult Real Estate market.

I Hope this info is of help, if so, please FOLLOW US ON TWITTER  LINKEDIN and on FACEBOOK

I don't have much experience with blogging, so please be kind and provide me with constructive criticism, where you can, to help me improve the form and content.

DISCLAIMER: I am not a CPA or a lawyer, so make sure to consult your professional advisors.This and all articles in this blog are intended to provide general information only, this is not intended to be a tax or legal advice and you should always consult with your own accountant, attorney and trusted advisors to discuss your specific situation, goals, rights and options.

 

Posted by Michelangelo Liotine on January 23rd, 2011 3:36 PM

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According to CNN staff writer Les Christie article posted few days ago, Vegas home prices will be on the skid until 2032.

According to the article......

"The bubble caused a lot of over-investment in these markets," said Celia Chen, a housing market analyst for Moody's Analytics.. "It's all collapsing because of the recession and over-valuation." So, bring on the contenders.  Chen estimates that Las Vegas home prices won't return to their pre-recession peak until after 2032; in Phoenix, the rebound will take until 2034; and Salinas, Calif., and Naples, Fla., won't come back until sometime around 2038." Read the full article.... 

I honestly do not see our future that dark..... deep gray, may be, but not totally black.

We can see many savvy, cash buyers investors, coming to town from everywhere, not only from other U.S.A. states, but from other countries such Italy, England, Brazil (one of the highest growing economy right now) and Asian nations as well.

They come attracted by the very high return of investment (cash flow) that our market offer right now and they do understand that Vegas is a fast moving town and will react strongly to the down of our Nation economy, (according to the latest from the Mc Carran) we already had (again), an increase in passanger in the past months.

CNN NEWS latest article...

Foreclosures at a record high in 2010, and more than 1 million people lost their homes....

SHOULD NOT SCARE YOU AND STOP YOU FROM BUYING!

Now is the time, price are low and, even more important, interest rates are at the lowest!!!

 

Thank you for reading my blog and as a token of my appreciation to you for visiting my site, please click here for your FREE, NO OBBLIGATION, NOTHING TO BUY, chance to win $ 1,000.00 certificate!

Do not forget to contact us, we will be there to answer all your questions and walk you thru, safe and sound, today’s difficult Real Estate market.

I Hope this info is of help, if so, please FOLLOW US ON TWITTER  LINKEDIN and on FACEBOOK

I don't have much experience with blogging, so please be kind and provide me with constructive criticism, where you can, to help me improve the form and content.

DISCLAIMER: I am not a CPA or a lawyer, so make sure to consult your professional advisors.This and all articles in this blog are intended to provide general information only, this is not intended to be a tax or legal advice and you should always consult with your own accountant, attorney and trusted advisors to discuss your specific situation, goals, rights and options.

 

Posted by Michelangelo Liotine on January 15th, 2011 11:17 AM

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Is going to be a 

HAPPY NEW YEAR

for Las Vegas or another 

I AM BROKE YEAR?

According to the Year-End report released today by RealtyTrac®, the leading online marketplace for foreclosure properties,we has in December 2010 a national decrease of nearly 2 percent in filings from the previous month and down 26 percent from  December 2009. 

Unfortunately for us, Nevada, did not follow the national trend!

According to today's report....

"More than 9 percent of Nevada housing  units (one in 11) received at least one foreclosure filing in 2010, giving it  the nation’s highest state foreclosure rate for the fourth consecutive year  despite a 5 percent decrease in foreclosure activity from 2009. Nevada foreclosure  activity in December increased 18 percent from the previous month and was up 14  percent from December 2009. Fourth quarter foreclosure activity in Nevada decreased nearly  7 percent from the previous quarter but increased 19 percent from the fourth  quarter of 2009"

Arizona registered the nation’s second highest state foreclosure rate for the second  year in a row, with 5.73 percent of its housing units (one in 17) receiving at  least one foreclosure filing in 2010, and Florida was in third position with 5.51 percent of its housing  units (one in 18) receiving at least one foreclosure filing during the year.

Six states represented  more than 50 percent of all bank repossessions, Nevada, California, Florida, Arizona, Illinois  and Michigan. This is a very sad record that does not make me feel good for sure. Read the full article......

These are really sad news for Nevada  and for the future of us all and,

like most of us ............

 

I really feel against the wall

With a lot of questions about the future

 

And don't know what to do next 

 

So..... what should we do? I think tight our belt, be patient and hold tight.

More tourist are coming according to the latest reports from the Mc Carran airport, there are few new project (including the new City Hall) that should create more job opportunity and more than anything i really believe in America and our ability to overcome adversities.

Thank you for reading my blog and as a token of my appreciation to you for visiting my site, please click here for your FREE, NO OBBLIGATION, NOTHING TO BUY, chance to win $ 1,000.00 certificate!

Do not forget to contact us, we will be there to answer all your questions and walk you thru, safe and sound, today’s difficult Real Estate market.

I Hope this info is of help, if so, please FOLLOW US ON TWITTER  LINKEDIN and on FACEBOOK

I don't have much experience with blogging, so please be kind and provide me with constructive criticism, where you can, to help me improve the form and content.

DISCLAIMER: I am not a CPA or a lawyer, so make sure to consult your professional advisors.This and all articles in this blog are intended to provide general information only, this is not intended to be a tax or legal advice and you should always consult with your own accountant, attorney and trusted advisors to discuss your specific situation, goals, rights and options.

 

Posted by Michelangelo Liotine on January 13th, 2011 10:53 AM

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