Why Is the Money Lost?
When individuals move and forget to change their address, companies or banking institutions cannot contact them. So any property left behind is turned over to the state as "unclaimed property." The state then acts as a custodian of the property until the rightful owner claims it.
Where Does the Money Come From?
The most common types of unclaimed property include bank accounts and safe deposit box contents; stocks, mutual funds, bonds, and dividends; un-cashed checks and wages; insurance policies, CDs, trust funds; utility deposits and refunds; and escrow accounts on home loans.
Is Some of This Money Yours?
To determine if you have any unclaimed property with the state, jump on the web and visit www.unclaimed.org. Click on the state that you live in, and you will be directed to the appropriate website. You will either be able to perform a quick immediate search online, or a few states give you the information on how to just contact them directly to inquire. If you have lived in several states, do a quick search for each, since the funds will be held in the state they originated.
But Be Careful...
Be cautious of solicitations by mail or email that require you to pay a fee to obtain information about unclaimed property. You may end up paying a fee and receiving no information about unclaimed property, just the contact information for the state. Any unclaimed property information can be obtained free of charge by visiting the above listed website.
What about money in Canada, or Federal money such as IRS returns, Savings Bonds, or Federally insured Credit Union accounts? While you're on www.unclaimed.org, just hit "links" at the top of the page to search these resources as well.
By taking a minute to do a quick search, you may find out you're a bit richer than you think. Pass this article on to your friends, family members, or colleagues...but be sure to remind them to include you in their celebration if they find their missing stash of cash!
Source: https://www.patreasury.org/unclaimed/SearchResults.asp & KWY3 News
With just days left in this year's legislative session, PAR is working to encourage legislators to support Senate Bill 1945, the Mechanics' Lien bill.
PAR supports this legislation because it protects homeowners from subcontractors and suppliers from unfairly filing mechanics' liens against their homes, even though the general contractor has been paid in full. "These unfair mechanics' liens prohibit homeowners from being able to sell their homes and make them ineligible to refinance or to qualify for other loans," said PAR President Frank Jacovini. "It also makes it difficult for the homeowners to receive services for any work still under warranty."
Realtors notified their local Senator Representative to VOTE YES for SB 1495 and protect consumers from unfair mechanics' liens. Their support will protect consumers and provide additional security to new homeowners as the housing market continues to recover.
*PAR = Pennsylvania Association of Realtors
Source: Suburban West REALTORS Association
Habitat for Humanity operates a ReStore in Media at the Granite Run Mall (Wednesday-Saturday; 10:00am-6:00pm) that accepts donations of gently used furniture, appliances, cabinets, building materials and more for sale to the public at bargain prices. Proceeds provide funds for building homes for families whose lives are dramatically changed forever in our community.
Got extra stuff at home or your business? Donate now - the Habitat for Humanity offers free pick-up arranged at your convenience. For more information call 610-466-1890 (Chester County) or 484-401-1650 (Delaware County) for more information.
How Existing and Emerging Policies can Help Older Adults Continue to Live in Their Homes as They Age?
Housing an Aging Population – Are We Prepared? explores the effects of this coming demographic change on the demand for housing, the challenge of providing housing choices for older adults of all incomes, and the policies that could help communities respond to the challenges of providing older adults with affordable housing.
These include policies to: assist with home modification using deferred loans or grants from Community Development Block Grant (CDBG), HOME or housing trust funds; connect residents to social services through the expansion of the HOME and Community-Based Services Medicaid waiver program, volunteer efforts, and other mechanisms; help residents afford high housing costs through housing vouchers and property tax abatement programs; and expand public transit and volunteer driver programs to help residents get around without driving.
Source: Diana Dietz is the Multimedia Journalist at the PA Association of Realtors
The real estate industry is facing a crucial moment. Over the next 18 months Congress will begin considering measures that could significantly impact the ability of Americans to achieve the dream of owning a home. In response to this challenge, the National Association of REALTORS® is organizing a “Rally to Protect the American Dream” at the U.S. Capitol. This rally on Capitol Hill will show our elected officials that no one cares more about revitalizing the economy and real estate market than REALTORS!
In response to the challenge, the National Association of REALTORS is organizing a "Rally To Protect The American Dream" at the U.S. Capitol on Thursday, May 17, 2012. This rally on Capitol Hill will show our elected officials that no one cares more about revitalizing the economy and real estate market than REALTORS!
Congress and the President should see their job as bolstering the housing economy and strengthening our commitment to the country's health. If the housing market continues to falter, the economy cannot fully recover.
Source: Surburban West Realtors Association (SWRA),
Aging baby boomers and their echo boomer children will transform home sales over the next 20 years, a report by NAR and other key organizations say.
Baby boomers will swell the seniors population by 30 million, increasing the supply of housing as these households downsize. This increased supply could mean big buying opportunities for the 65 million echo boomers (people born between 1981-1995), which are expected to absorb three quarters of the inventory by 2020. For more information click here to read the full National Association of Realtors (NAR) article or access the "Demographic Challenges and Opportunities for U.S. Housing Markets" Report prepared by the Bipartisan Policy. Center.
Source: Suburban West Realtors Assocations, National Association of Realtors
May your neighbors respect you,
Troubles neglect you,
The angels protect you,
And Heaven accept you.
A lender will, on occasion, forgive some portion of a borrower's debt. The general tax rule that applies to any debt forgiveness is that the amount forgiven is treated as taxable income to the borrower. Some exceptions to this rule are available, but, until recently, when a lender forgave some portion of a mortgage debt (such as in so-called "short sales," foreclosures and "workouts"), the borrower was required to pay tax on the debt forgiven.
A law enacted in December 2007 provides relief to troubled borrowers when some portion of mortgage debt is forgiven. That relief expires on Dec. 31, 2012. Use this information to better understand mortgage debt cancellation:
If a lender forgives some or all of an individual’s debts, the general rule is that the forgiven amount is treated as ordinary income and the borrower must pay tax on the forgiven amount. Exceptions apply for bankruptcy, insolvency and certain other situations, including mortgage debt. (See below)
A borrower can be excused from paying tax on forgiven mortgage debt. The debt must be secured by a principal residence and the total amount of the outstanding obligation may not exceed the original mortgage amount plus the cost of any improvements. The objective of the legislation was to assure fairness: Homeowners should not be required to pay income tax where there is no cash realized in a transaction.
Example: The provision is best understood with an example.
Assume a family purchased their home for $175,000, with a mortgage of $150,000. In 2012, they need to sell the home. They find that the value of homes in their area has declined, so they can sell for only $120,000. At the time of the sale, the outstanding balance on their mortgage is $132,000. Thus, there will not be enough cash at settlement to repay the lender the full balance of the mortgage. If the lender forgives the entire difference between the amount owed ($132,000) and the sales price ($120,000), the debt forgiven will be $12,000. The relief provision assures that the homeowner will not pay tax on the $12,000 forgiven.
No. The provision has broader application. Lenders might forgive some portion of mortgage debt in a sale known as a “short sale” (as above, when value at sale is less than the amount owed) or in a foreclosure when the debt is wiped out. In addition, if a borrower still living in the home is able to make an arrangement with a lender that reduces the principal balance of a mortgage, the amount forgiven in that workout will not be taxed.
No. The loss is considered a personal loss and is therefore ineligible for either capital loss or ordinary loss treatment.
Until January 1, 2013, the homeowner will pay no tax on any forgiven amount. Under pre-2007 law, the amount of forgiven mortgage debt (the $12,000 in the example above), would have been treated as income, and taxed at ordinary income rates.
Only in limited circumstances. The relief provision can apply to either an original or a refinanced mortgage. If the mortgage has been refinanced at any time, the relief is available only up to the amount of the original debt (plus the cost of any improvements). Thus, if the original mortgage was $125,000 and later refinanced in a cash-out arrangement for a debt totaling $140,000, the $15,000 cash-out is not eligible for relief if a lender later forgives some amount related to the cash-out. Tax relief is generally not available for second mortgages or home-equity lines of credit where the funds are not used for home improvement. Any amount that is not eligible for the relief provision will be taxed as ordinary income.
The lender is required to provide the homeowner and the IRS with a Form 1099 reflecting the amount of the forgiven debt. The borrower/homeowner must file a Form 982 to reflect the amount forgiven and to show the reason why the forgiven amount is not taxable. Any taxable portion of forgiven debt will then be reported on the homeowner’s Form 1040 for the tax year in which the debt was forgiven. For example, a lender that forgave mortgage debt in March 2012 would provide the 1099 information to the IRS and the homeowner as required. The forgiven amount would then be reflected as appropriate on the 2012 Forms 982 and 1040 that will be due April 15, 2013.
Yes. Up to $2 million of mortgage debt on a principal residence may be forgiven tax-free. Any amount of forgiven debt above $2 million is taxable as ordinary income.
Permanent rules enacted in 1993 provide relief to debt-burdened commercial real estate and rental properties. The 2007 provision puts commercial/investment property and residential owner-occupied property on similar footing.
The provision would not apply. The provision applies only at the time of sale or other disposition or when there is a workout (reduction of existing debt) with the lender. No mechanism exists to reflect a loss of value while the property is still being used as a residence. (See the question on capital losses, above.)
No. Some states have laws that allow a lender to require a repayment arrangement, particularly if the borrower has other assets. Forgiveness of debt is always at the lender's discretion.
A version of the mortgage relief provision passed the House in 1999 and 2000, but was not enacted. The rules of current law were enacted in 2007 as part of H.R. 3648, a bill focused solely on housing issues. The original rules were effective from January 1, 2007 through December 31, 2009. The provision was extended through December 31, 2012 in 2008 as part of the stimulus legislation enacted in 2008. (HR 1424, PL 110-343).
No current score exists for an extension of this provision beyond 2012. When originally enacted in 2007, the score was a loss of $1.4 Billion over 10 years. The 2008 extension added $362 Million to this score.
Source: National Association of Realtors
For home sellers, buyers and real estate brokers hoping for breakthroughs on simplifying short-sale transaction and timelines, this may not be the proverbial silver bullet, but it's definitely positive news: The agency that controls Fannie Mae and Freddie Mac has a serious effort under way to remove or minimize some of the major hurdles and to put those changes in the field as soon as this fall.
Officials at the Federal Housing Finance Agency -- the folks who now make the rules governing millions of mortgage transactions at both companies -- told me last week that they are actively seeking input from lenders, servicers, REALTORS®, investors and housing counselors about how to speed up short sales on loans connected with Fannie and Freddie.
National Association of REALTORS® officials, who have already met with the agency's special short-sale task force, confirm that the effort is for real and promise potentially significant reforms. FHFA officials say their deadline to wrap up their review of short-sale obstacles is June 30, 2012 and they plan to announce detailed improvements to the process no later than Sept. 30, 2012.
Given the sheer size of the companies' portfolios -- plus the estimated 1.7 million additional loans expected on the foreclosure conveyor belt at Fannie and Freddie in the coming several years -- any substantive improvements could have wide-ranging benefits for everybody involved.
High on the list:
1. Second liens
2. Mortgage insurers
3. Mandatory timelines.
4. Valuation issues.
Legislation pending in Congress and supported by NAR (House bill H.R. 1498) would nail down one key time segment -- it would require servicers to respond within 45 days to any fully executed short-sale offer. Remember these deadline dates -- June 30 and Sept. 30. We'll check back and see how much actual streamlining comes out of the FHFA's latest high-priority project.
Source: Inman News, Daily Real Estate News, Ken Harney
Here are 10 things the Internal Revenue Service says you should know about mortgage debt forgiveness:
1. Normally, when a lender forgives a debt -- that is, relieves the borrower from having to pay it back -- the amount of the debt is taxable income to the borrower. Thus, a homeowner who had $100,000 in mortgage debt forgiven through a short sale would have to pay income tax on that $100,000, as an example.
Fortunately, under the Mortgage Forgiveness Debt Relief Act of 2007, you may be able to exclude from your taxable income up to $2 million of debt forgiven on your principal residence from 2007 through 2012. This means you don't have to pay income tax on the forgiven debt.
2. The limit is $1 million for a married person filing a separate return.
3. You may exclude from your taxable income debt reduced through mortgage restructuring, as well as mortgage debt forgiven in a foreclosure.
4. To qualify, the debt must have been used to buy, build or substantially improve your principal residence and be secured by that residence.
5. The Mortgage Forgiveness Debt Relief Act applies to home improvement mortgages you take out to substantially improve your principal residence -- that is, they also qualify for the exclusion.
6. Second or third mortgages you used for purposes other than home improvement -- for example, to pay off credit card debt -- do not qualify for the exclusion.
7. If you qualify, claim the special exclusion by filling out Form 982: Reduction of Tax Attributes Due to Discharge of Indebtedness , and attach it to your federal income tax return for the tax year in which the debt was forgiven.
8. Debt forgiven on second homes, rental property, business property, credit cards or car loans does not qualify for the tax-relief provision. In some cases, however, other tax-relief provisions -- such as bankruptcy -- may be applicable. IRS Form 982 provides more details about these provisions.
9. If your debt is reduced or eliminated, you normally will receive a year-end statement, Form 1099-C: Cancellation of Debt, from your lender. By law, this form must show the amount of debt forgiven and the fair market value of any property foreclosed.
10. Examine the Form 1099-C carefully. Notify the lender immediately if any of the information shown is incorrect. You should pay particular attention to the amount of debt forgiven in Box 2 as well as the value listed for your home in Box 7.
The IRS has created a highly useful Interactive Tax Assistant on its website that you can use to determine if your canceled debt is taxable. The tax assistant tool takes you through a series of questions and provides you with responses to tax law questions.
For more information about the Mortgage Forgiveness Debt Relief Act of 2007, see IRS Publication 4681: Canceled Debts, Foreclosures, Repossessions and Abandonments. You can get it from the IRS website at irs.gov.
Source: Daily Real Estate News, Stephen Fishman is a tax expert, attorney