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Screening Contractors and 5M Land Trusts 101

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Fannie Mae Offers Incentives to Real Estate Investor Buyers and REO Buyers’ agents can earn $1,000 bonuses on HomePath sales in 2 states

Fannie Mae is once again offering closing-cost assistance for buyers who close on a home in the mortgage giant’s real-estate owned (REO) inventory, but in most states will not bring back cash bonuses it previously paid to buyers’ agents.

Buyers who put in initial offers on or after April 11, and close on the sale of a Fannie Mae HomePath property by June 30, will be eligible to receive up to Click Here for Full Video/Article (Members Only)

Wells Fargo, one of the nation’s biggest banks and the largest consumer lender, said Wednesday that its fourth-quarter earnings rose 21 percent, helped by an improving loan portfolio and withdrawals from its capital reserves.

The bank, which is based in San Francisco, earned $3.4 billion, or 61 cents a share, in the fourth quarter, up from $2.8 billion, or 8 cents a share, in the year-earlier period, matching analysts’ forecasts. For the year, Wells Fargo reported net income of $12.36 billion in 2010, compared with $12.28 billion in 2009.
The bank’s full-year revenue fell to $85 billion, however, from $88.7 billion in 2009, as new federal regulations limited the overdraft fees that banks can charge on checking accounts.
Still, compared with the third quarter, the bank generated revenue growth in roughly two-thirds of its businesses.
“As the U.S. economy showed continued signs of improvement, our diversified model continued to perform for our stakeholders, as demonstrated by growth in loans and deposits, solid capital levels and improving credit quality,” John G. Stumpf, the bank’s chairman and chief executive, said in a statement.
Despite its heavy hand in the lending industry, which has been hit by losses for three years,

Wells Fargo has quietly emerged from the financial crisis as one of the nation’s strongest banks.
The report from Wells is an important step for the bank as it looks to increase its dividend, which has been stuck at 5 cents for nearly two years.
Wells Fargo Press Release
When the financial crisis struck, Wells, JPMorgan Chase and other industry giants cut dividends as they moved to bolster their capital. Now, two years later, banks are eager to give money back to shareholders — if the government will let them. The Federal Reserve must first complete a second round of bank stress tests, whose results are expected in March.
JPMorgan, which last week reported a $17 billion profit for 2010, has said it hopes to raise its dividend as much as a dollar in the coming months.
Wells Fargo has been more coy about its plans. Mr. Stumpf, in a conference call with investors, said he was eager to raise the dividend.
But Brian Foran, a senior bank analyst with Nomura Securities International, noted, “They historically have been cagey about saying anything before they know it.”
The bank’s dividend outlook has improved on the back of its lending operation.
Wells Fargo picked up new borrowers in the fourth quarter, particularly businesses, and it released $850 million from its reserves, thanks to the improving loan portfolio.
The bank’s provision for credit losses was cut nearly in half, to $2.99 billion in the fourth quarter from $5.91 billion a year earlier.
Shares of Wells Fargo fell 68 cents, or 2.1 percent, on Wednesday, closing at $31.81.
Although the bank’s mortgage shop reported a 19 percent drop in income from 2009, it originated $128 billion in home mortgages in the fourth quarter, up from $94 billion in the fourth quarter of 2009.
“You can see the momentum building as economic activity is returning,” said Marty Mosby, a managing director at Guggenheim Partners.
Yet Wells Fargo still faces problems surrounding its mortgage portfolio.
On Jan. 7, the highest state court in Massachusetts ruled that Wells Fargo and US Bancorp had wrongly foreclosed on two homes, because they could not prove they owned the mortgages.
Regulators in all 50 states have begun investigations into whether hundreds of thousands of foreclosures made in recent years were invalid.
Some banks temporarily suspended foreclosures last year during the controversy.
Wells Fargo officials say they have largely avoided the documentation problems and have decided not to halt foreclosures.
“At the end of the day, the litigation will be less of an impact on Wells Fargo than people fear,” said Lawrence Remmel, a partner at the law firm Pryor Cashman, where he leads the firm’s banking and financial institutions group.
Wells Fargo has also moved to distance itself from litigation over soured loans that banks securitized and sold to investors.
Fannie Mae and Freddie Mac, the government-controlled mortgage finance companies, are demanding that Wells Fargo and other big banks buy back loans sold at the height of the mortgage bubble.
In the fourth quarter, the bank recorded a $464 million provision for future mortgage repurchases, up from $370 million in third quarter.
But the bank’s chief financial officer, Howard I. Atkins, said Wednesday that Wells Fargo did not plan to settle its dispute with Fannie and Freddie. Mr. Atkins said the bank’s mortgage securities were of higher quality than those generated by its competitors.
“This is a diminishing issue, not an increasing issue,” Mr. Atkins said in an interview.
Eric Dash contributed reporting.
By Ben Protess
For more: http://nyti.ms/eP7Rd8
This is NOT New for those who attended the Great Investor Cruise or attend our POWER LUNCH Series.
My CPA, Mike Grinnan shared this troublesome news several months ago.  (another reason to stay tuned to AskMikeButler.com) The most disappointing aspect of this new tax law is the “targeting” of landlords and real estate investors.
The rest of the world has an effective date of Jan 1, 2012; however, real estate investors and rental property owners effective date is Jan 1, 2011. NOW!
Every “anything or anybody” that gets paid more than $600 by you in the calendar or tax year, you must now send them a 1099.
But hold on, this includes utility companies, Home Depot,… Click Here for Full Video/Article (Members Only)

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Bank executives who were hoping for a quiet end to this fall’s controversy over irregularities in the foreclosure process are facing a new threat: state judges. 
 
The chief justice of New Jersey’s Supreme Court, Stuart Rabner, announced Monday that the state’s courts would stop foreclosures by big banks if they cannot show they’re following state law when foreclosing. 
 
Rabner made the announcement after assigning a judge to oversee foreclosure matters. That judge, Mary C. Jacobson, issued an order Monday requiring six banks – Ally Financial, Bank of America, J.P. Morgan Chase, Wells Fargo, OneWest Bank and Citigroup – to appear in court and explain why she shouldn’t suspend foreclosures. 
 
The New Jersey action stems from the controversy over questions surfaced over the legality of documents submitted to courts in foreclosure proceedings. 
 
"Today’s actions are intended to provide greater confidence that the tens of thousands of residential foreclosure proceedings underway in New Jersey are based on reliable information," Rabner said in a statement. "Nearly 95 percent of those cases are uncontested, despite evidence of flaws in the foreclosure process." 
 
The six banks must by Jan. 19 show the court why it should not suspend foreclosures. The order said the banks were chosen "based on a public record of questionable practice." 
 
Only one bank would comment on Monday. Mark Rodgers of Citigroup said the bank would review the judge’s order and ensure that it is in compliance. 
 
Banks are expected to argue that problems in the foreclosure process have been minor and the vast majority of those facing foreclosure lost their homes because they didn’t pay their mortgages for many months. 
 
They’re also likely to say that a protracted freeze in foreclosures could have a negative effect since it would keep those vacant homes out of the market. 
 
But homeowner advocates and others will likely argue that banks’ problems with following the letter of the law in foreclosure proceedings reflect a range of harmful practices that have hurt borrowers trying to avoid foreclosures. 
 
 
By Zachary A. Goldfarb 
For more: http://wapo.st/gxhd7G

STRUGGLING homeowners can sometimes benefit from hiring a lawyer to try to modify a mortgage or avert foreclosure, but avoiding scam artists and sketchy practices requires vigilance.

 
Carefully vetting lawyers to weed out the good from the bad can mean the difference between saving tens of thousands of dollars in fees and actually having a loan modified — and being out the cash, with your home in foreclosure and a radioactive credit score.
 
“It’s difficult for consumers to differentiate between the bad actors and the ones who can help, because they’re so inundated with scams these days,” said William Mackin, a bankruptcy lawyer in Woodbury, N.J.
 
So what are some of the potential red flags?
 
According to PreventLoanScams.org, a new online site operated by the nonprofit Lawyers’ Committee for Civil Rights Under Law, homeowners should be cautious about: any guarantees that a loan will be modified, since not all can be; requests for an upfront fee or that the property title be signed over to a third party; and offers to redirect the monthly mortgage payments to a third party who will forward them to the lender or mortgage servicer.
 
“My best advice is, be wary of the too-good-to-be-true remedies,” Mr. Mackin said.
 
Brian E. Sullivan, a spokesman for the Department of Housing and Urban Development, says homeowners may want to contact a HUD-approved housing counseling agency before hiring a lawyer. A list of nonprofit counselors — some of which offer free loan-modification services, and others that refer clients to outside loan-modification lawyers — can be found on HUD’s Web site.
 
One benefit of using lawyers is that they typically know the ins and outs of the welter of government homeowner-assistance programs. Those homeowners who decide to hire one should contact their local bar association to ensure they find “an ethical law firm” that does loan modifications, said Thomas Martin, president of America’s Watchdog, a nonprofit consumer advocacy group.
 
Lawyers typically charge $1,500 to $2,000, and up, for a loan modification. But they might be reluctant to accept clients who have lost their jobs and have no other outside income, as arguing with the bank or servicer in that situation can be pointless.
 
A lawyer will typically ask for
– your last two federal income tax returns,
– two most recent W-2 forms,
– six months’ worth of pay stubs,
– evidence of other income

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 The decline in home prices is accelerating across the nation, according to a new report, and a record number of foreclosures is expected to push prices down further through next year.

 
 
But a second report released on Tuesday indicated that consumer confidence in the economy rose in November to the highest level in five months amid some more hopeful signs.
 
The Standard & Poor’s Case-Shiller 20-city home price index released Tuesday fell 0.7 percent in September from August. Eighteen of the 20 cities recorded price declines.
 
Cleveland recorded the biggest drop, 3 percent from a month earlier. Prices in San Francisco, Los Angeles and San Diego, which had been showing strength this year, also dropped in September from August.
 
Washington and Las Vegas were the only metro areas to post gains in monthly prices.
 
The 20-city index has risen 5.9 percent from its April 2009 bottom. But it remains nearly 28.6 percent below the peak, in July 2006. And home prices have fallen in 15 of the 20 cities in the last year.
 
Prices rose in many cities from April through July, mostly helped by government tax credits that have since expired.
 
The national quarterly index, which measures home prices in nine regions of the country, dropped 2 percent in the third quarter from the previous quarter.
 
In the other report, the Conference Board said that its Consumer Confidence Index for November rose to 54.1 points, up from a revised 49.9 in October. Analysts were expecting 52.0. November’s reading is the highest since June’s 54.3.
 
The November reading is the highest since June, when the index stood at 54.3 just as the economy’s recovery started to lose momentum. Economists surveyed by Thomson Reuters had expected 52.0.
 
It takes a level of 90 to indicate a healthy economy, which has not been approached since the recession began in December 2007.
 
One component of the index, how Americans feel now about the economy, rose to 24, up from 23.5. The other gauge, which measures how American feel about the economy over the next six months, rose to 74.2, up from 67.5 last month.
 
“Consumer confidence is now at its highest level in five months, a welcome sign as we enter the holiday season,” Lynn Franco, director of the Conference Board Consumer Research Center, said in a statement. “Consumers’ assessment of the current state of the economy and job market, while only slightly better than last month, suggests the economy is still expanding, albeit slowly. Hopefully, the improvement in consumers’ mood will continue in the months ahead.”
 
Others were less optimistic.
 
“The rise in consumer confidence in November is not consistent with a sustained acceleration in consumption growth at a time when income growth is weak, the unemployment rate is high and a double dip in house prices is under way,” said Paul Dales, United States economist at Capital Economics.
 
The consumer confidence index, which measures how respondents feel about business conditions, the job market and the economy over the next six months, has recovered fitfully since hitting a record low of 25.3 in February 2009. Economists watch confidence closely because consumer spending accounts for about 70 percent of economic activity and is crucial to a strong rebound. The improved confidence mirrors an increase in spending in November, fueled by early discounting on holiday goods that lured shoppers into stores.
 
The Conference Board’s index, based on a random survey mailed to 5,000 households from Nov. 1 to Nov. 19, showed that worries about jobs eased, but that concern remained high.
 
By THE ASSOCIATED PRESS
 
For more: http://nyti.ms/eoUCAk
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