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| August 2010 Real Estate Newsletter |
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In Escrow4986 Hancock St Chino Large Single Level, 4 Bd/2 Baths 2 Car Garage,Immaculate! http://www.4986hancockstreet.com |
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For Sale...Now Click Here http://www.immobel.com/personal/1_3_1/searchResults.do?per=mrmls&la=EN&xml=1&cust(agent)=IHETTPET |
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$749,900 1765 EuclidAve Upland 4 Bedrooms, 3 Baths Prestigious Upland Address Must See! http://Estate Home |
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BANK OWNED PROPERTIES FOR SALE Bank Owned Properties more Click Here http://www.imrmls.com/servlet/lDisplayListings?AGENT=I4208&LA=EN:http://www.imrmls.com/servlet/lDisplayListings?AGENT=I8101&LA=EN |
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R.E.O. HOME LIST R.E.O. HOME LIST Click Here http://www.imrmls.com/servlet/lDisplayListings?AGENT=I8101&LA=EN |
Articles and Advice |
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| Seven rules for room additions By Paul Bianchina If you're happy with your home and your neighborhood but are craving a little more space, maybe adding on is a better alternative to moving out. Room additions can be a terrific alternative for many homes, adding space for a growing family and adding resale value at the same time. But be forewarned. A good room addition involves a whole lot more than just slapping on some additional square footage. Here are some important rules to keep in mind as your planning gets under way: 1. Know why you're adding on: This is the first rule, and it happens before you lift a hammer. Why do you need to add on? And no fair cheating and saying, "I need more space!" Do you need another bathroom? Bedroom space? A laundry room or mud room? An improved kitchen flow? More space to entertain? Better accessibility due to health issues? More storage? A larger garage or hobby area? The only way the addition will meet your needs is to know what those needs are in the first place. 2. Good additions never look like additions: This is the other top rule of room-addition planning. When you're done, the addition -- no matter what its size or where it's located -- should never look like an addition. The architectural styles of new and existing need to blend. The exterior materials need to blend as well, or at least complement each other. To the extent possible, use the same type of windows, roofing, doors, siding and other materials. If the original home has wood windows, using new vinyl windows in the addition screams "add-on" and lowers the appeal and the value. Don't overlook the need to blend landscaping and hardscaping as well. 3. Out, up, down, or a combination: The how and the where of a room addition is always a fun and exciting challenge for everyone involved. Some homes are situated on larger lots and lend themselves very nicely to adding out. Others seem best suited to adding up by building on a second or even a partial third floor. Some houses are even laid out in such a way that it's possible to excavate under them and add new living space in the form of a daylight basement. Or it could be that a combination of two or even all three of these options makes the most sense for your particular home. Keep your mind open to the possibilities. Work with a good contractor and a good designer and you'll be amazed at what you can come up with. 4. Don't let the interior become an afterthought: I've seen a surprising number of additions that look great from the outside but seem to have no thought put into them on the inside. Flooring doesn't match. Trim doesn't match. Sometimes even the interior floor heights don't match. Remember that how the interior of your addition looks and flows on the inside is just as important as how it looks and flows on the outside. Use the same materials or the same style of materials. Match up ceiling, floor, and wall levels. Here again, no matter how you view the addition, inside or out, it should never look like an addition. 5. Create convenient access: This is another afterthought in a lot of additions. Let's say you have a three-bedroom, one-bathroom house, and you want to add a second bathroom. Typically, that's an addition that's going to have a good payback. But then you build the addition so that the only access to the second bathroom is through the kitchen. You now have a three-bedroom, two-bath house, but since the layout is lousy, you've actually gone backwards in terms of desirability and resale value. Are you going to create a beautiful second-floor master suite that can be accessed only by a tiny spiral staircase from the family room? Is the only way into your great new kitchen via a convoluted hallway that leads through the laundry room? When planning your addition, never lose sight of how you're going to access the new spaces, and make sure that access is both convenient and inviting. 6. Don't overwhelm your lot: Granted, room additions are expensive. So when you're doing one, and all those workers are onsite, there's a temptation to get as much square footage as you can. But don't cram your lot full of house. Remember that open space is important as well, both to you and your family, and, later on, to potential buyers. This is a good time to go back to Rule No. 1 and reconsider the "why" part of your room addition. Don't add space just to add it -- stay focused on your overall goals. 7. Understand the legalities: There are lots of rules and regulations that come into play regarding room additions. These include property line setbacks, zoning restrictions, and restrictions imposed by homeowner associations and architectural review committees. In some historic areas, your addition may have to comply with certain historic guidelines. In other areas, there may even be solar shading restrictions that limit the height or the orientation of your roof line. Be sure you check into all of this before you get too far along with your planning. |
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1377 N 3RD Avenue, UPLAND, 91786, CA North of Foothill Neighborhood By C Hettinga Charming remodeled kitchen adorns this single level pool home. 4 bedrooms and 2 bathrooms. Upgraded dual pane windows, fresh paint. RV parking. Must See! price: $480,000 |
| Water audits prepare you for the future By Michelle D. Alderson Despite a very wet season this past winter, the increase in rainfall didn’t make up for many years of below-average water levels. In 2009 California Governor Arnold Schwarzenegger declared a state of emergency in an effort to manage the drought crisis. Since then, many water companies have put into place mandatory water rationing with financial penalties for homeowners who don't comply. Before you find yourself paying more for your water, be prepared for the future by conducting a water audit (don't worry, you don't have to find all your water bills from the past two years). A water audit analyzes a home's water use and identifies ways to make it more efficient. A water audit's primary focus is to check for leaks in plumbing fixtures, appliances, toilets, faucets, hoses, and sprinklers (as well as ponds, fountains, and pools, where applicable). A water audit also can determine if older appliances and faucets need to be replaced with newer energy-efficient products, which can save both water and money on your monthly utility bills; Simply installing a low-flow showerhead you can save 8,000 gallons of water a year per person. Beyond doing a physical check for water leaks, a water audit also looks at how much water you can save in daily tasks. Do you take long showers? Do you use the dishwasher and clothes washer only when they are full? Do you turn off the water when you are brushing your teeth? According to the American Water Works Association (AWWA), the average indoor water use per person is 94 gallons of water per day. Simply adjusting everyday habits can cut back on water usage by as much as 30 percent. That’s more than 30 gallons a day per person. With global warming and droughts plaguing the West, water rationing will become mandatory by most utility companies. California's state water department forecasts that the Sierras, which are one of California’s main water sources, will have 25 to 40 percent less snow by 2050. A water audit saves money, saves water, and prepares you for an inevitable future. To find out how your household's water use compares to the rest of the country, go to H2O Conserve's website (www.h2oconserve.org) or the Water Use It Wisely site (http://www.wateruseitwisely.com/100-ways-to-conserve/home-water-audit.phptry) for their user-friendly H2O calculators. They will show how much water you use and give tips on ways to conserve. For more information on water audits, visit the AWWA website (www.awwa.org). |
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| Sell Your Home With Us! Website for your: www.YourAddress.com!! By YOUR REALTORS, PETE & CINDY HETTINGA Internet Marketing Takes Your Home World-Wide!! We'll provide you with your own Website for your home: http://YourAddress.com see our example at : http://5488HowardStreet.com ! We Give Great Service, Reliable and Get The Job Done. Referrals Are Our Business. *********************** Let us know you've refered a friend, family member or business associate we'd love to "Thank You" with a gift upon closing.We Serve The Inland Empire, Los Angeles and Orange Counties. Yes, we handle residential, commercial /industrial, vacant land, agricultural properties in the State of California and Out of State. Finding a home or helping people get to where they want to be in the Real Estate Market is what we do and we have capabilities to help you with a "5star" referral in all of the U.S., Canada, Mexico, Europe, all over the world! Thank You For Your Business! |
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SOLD 1303 CLOVER LANE ONTARIO By Cynthia Hettinga JUST SOLD $335,000, built 1997, 3 bedroom, 2 1/2 baths, Large Bonus Room Upstairs, 2272 Sqft. of living space, Lot Size 8510 Sqft., 3 car garage! |
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JUST SOLD, 2738 S. Del Norte Ave. Ontario By Cynthia Hettinga $319,000 JUST SOLD, 4 Bedrooms, 3 Baths, built 1980, 2,455 Sqft. of living space, Lot size: 7,300 Sqft. |
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SOLD 28350 Arborglenn Dr Moreno Valley CA By Cindy Hettinga SOLD For $220,000 Short Sale Listed $210,000, 4 bedrooms, 3 full baths, 2,947 Sqft., 3 car garage, Lot size: 9580 sqft. Built 2006! $210,000 |
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Why Short Sale Your Home? Visit www.ShortSaleDay.com By by Cindy Hettinga April 5, 2010... To help homeowners who are unable to keep their homes under the Home Affordable Modification Program, the HAFA program may make a short sale or a deed-in-lieu of foreclosure a viable option to help them avoid foreclosure. The HAFA Program, which will take effect on April 5, 2010, provides servicer, seller and junior lien holder incentives for these transactions and is designed to simplify and streamline use of short sales and deeds-in-lieu of foreclosure. |
| Sellers face new dilemma in timing the market By Dian Hymer Some sellers have been biding their time for three years and now wonder if they should continue to wait or bite the bullet and sell now. Karl Case, co-creator of the widely followed S&P/Case-Shiller Home Price index, thinks there's a 50-50 chance that we're at the bottom of the market and that we'll see improvements in the months ahead. Unemployment remains a concern. An increase in the number of new households is predicated on an increase in jobs. Even if we have seen the worst of the recession, most analysts believe the housing recovery could be rocky for years. A quick turnaround is probably not on the horizon. The home-sale market is generally better this year than it was last year at this time. Interest rates are lower by about 1 percent. Mortgages are much more readily available. Home prices have dropped significantly, making it possible for buyers to afford to buy a long-term home. An increasing number of fence-sitters have turned into motivated buyers. However, they are focused on value, condition and location; they aren't overpaying, as they did in 2006. It's still a buyer's market and could remain so for some time to come. Sellers who purchased within the last five years might need to sell for less than they paid. One couple bought a home in Crocker Highlands, a coveted Oakland, Calif., neighborhood. They paid just over $1.1 million in 2005 and made improvements to the property. They sold in 2009, after investing more to prepare the property for sale. They received multiple offers, over the list price. The home sold for $905,000. These sellers weren't happy about the loss. But, their goal was to own only one home. They bought a retirement home near Sacramento and were spending most of their time there. Holding onto the Oakland home was a financial drain, particularly since they were there only part time. They couldn't rent the property out for enough to cover the ownership costs. Another homeowner realized before the recent economic downturn that she couldn't afford to continue to make hefty mortgage payments due to a drop in her income. Emotionally attached to her home that she'd improved over time, she decided not to sell then, which would have resulted in a profit. Instead, she rented the property for a few years and moved in with a friend to lower her overhead. Although the rent reduced her monthly debt load, it didn't cover the carrying costs. When she finally sold in January 2010, prices had dropped to a point that the property sold for less than the amounts of the mortgages secured against the property. To get lender approval on a short sale, the seller had to contribute cash at closing. Clearly, she would have been better off financially if she had sold years earlier. HOUSE HUNTING TIP: Deciding whether to sell now and take advantage of an improved home-sale market or wait for a better time is complicated. First, you need to know the approximate selling price of your home in this market. How much work needs to be done to get the property ready to sell? Does the house have any defects or deferred maintenance that will impact the sale price or make the property harder to sell? If so, this would negatively impact the price. This information can be obtained through your real estate agent. THE CLOSING: Low inventories of good homes in some niche market gives sellers an edge. Even so, you'll be successful in today's market only if you are realistic about the current market value of your home. Dian Hymer, a real estate broker with more than 30 years' experience, is a nationally syndicated real estate columnist and author. |
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| Seller financing without hiccups By Benny Kass DEAR BENNY: We are in our late 70s and have moved out of our house. We are selling the house to our daughter for approximately $338,000 and we are taking back the mortgage. We have been told the minimal interest rate we can charge her is 1.61 percent without getting in trouble with the IRS. And, it must be renewed each year. Is this correct? Please advise. –Louise DEAR LOUISE: You are referring to what the IRS calls the "applicable federal rate" (AFR). This is the rate that is a safe-harbor. If you go below the stated rate, you will be hit with imputed interest. The IRS breaks this down into three categories: (1) short-term -- loans no longer than three years; (2) mid-term -- loans over three years but not over nine, and (3) long-term -- loans over nine years. Let me provide you with an example. The long-term rate for February 2009 was 2.96 percent. If this will be the term of your daughter's loan, you can safely lend the money to her at 2.96 percent annual interest. (Of course, she can always pay it off sooner, and you have the right to gift her a portion of the loan on an annual basis). If you were to lend at 2 percent, the IRS will require you to declare -- and pay -- as if you actually received the full 2.96 percent of interest. This is known as an "imputed interest." You can find the applicable AFR on the IRS Web site (www.irs.gov) for the month in which you will be making the loan. DEAR BENNY: In a Bob Bruss article years ago, he stated that if you have an undated IRS Form 4506 in the file with no lender's name on it, that is a virtual invitation to the eventual loan owner to pry into your private tax returns. I called my loan company and they sent back this response: "As for the 4506 form, I have spoken with our legal department. The reason the 4506 form remains blank is if we sell your loan. If the page is not signed, we would not be able to provide the loan to you. They have told me that the privacy statement (opt-out document) you signed does not extend to providing information to our investors, and the privacy statement explains if and when we will disclose nonpublic personal information. We can disclose information to an investor at any time because it is part of providing the loan for which you applied.” My question: We did sign and date the Form 4506, but they left the lender name off. Is this a normal practice? –Dean DEAR DEAN: In my opinion, there are just too many legal forms that potential homebuyers (and refinancers) have to sign in order to get a mortgage loan. And, in my opinion, the most objectionable is IRS Form 4506, entitled "Request for Copy of Tax Return." You -- and Bob Bruss, my predecessor -- are correct. By signing this form, you have given a blank check to the holder of the document to have complete access to your federal income tax return(s). Which year? Well, paragraph 7 of the form specifically asks the signer to list the tax years. But most mortgage lenders want you to leave this blank so that they can fill in the years if they ever want -- or need -- to have access to your tax returns. In fact, the IRS specifically states on the form that "if you are requesting more than eight years or periods, you must attach another Form 4506." The IRS makes it clear on the top of the form that you must "not sign this form unless all applicable lines have been completed." Once again, lenders want you to leave this form blank and just write your Social Security number and sign your name. I understand the reason why lenders insist that you sign the form. There are fraud cases, and lenders want to be able to investigate your situation if they feel that you have misled them about your income, assets and expenses. When I conduct real estate closings, I generally fill in the year that settlement takes place in paragraph 7. Thus far, no lender has ever challenged this. But the bottom line is that if you want that mortgage loan, you have to comply with all of the lender's requirements, be they reasonable or not. DEAR BENNY: Your most recent article on creating LLCs for rental properties raised a number of questions. You stated "do not commingle your own funds." What if I set up checking accounts for each of my LLCs, but want to transfer the monthly "leftover" into my personal investments or into my personal checking account where I can use as I please? I have a bank debit card in which I extract funds from for my personal use. They are my investments and I need to have access to the LLC bank accounts to live and enjoy life. That's the dream. Further on you stated that as sole member, I should sign papers as "member." Why not owner, president, chairman, janitor, et al., as I am the only person who is named in the LLC? If I am the only member, my signature should be all that is needed. The problem that I find cumbersome in LLCs is that I have to set up bank accounts for every one of them and thus, I run around with three to four checkbooks. In one LLC, I have several duplexes and triplexes because of the bookkeeping excesses and I would hope that my insurance umbrella of $2 million would cover any law suit. –Bill DEAR BILL: Your "dream" may also be the dream of a creditor who wants to get at all of your assets. If you commingle funds -- i.e. use the funds from one or more of your LLCs as your personal funds -- you open yourself up to creditors who will argue that your LLC is only a sham -- a paper tiger. Furthermore, in your single-member LLC, you are the sole member. You are not the janitor, chairman of the board or anyone else. If you do not add the word "member" after your name, once again, a creditor could argue that you did not sign in your capacity as a member of the LLC but in your personal capacity, and thus you subject yourself to potential liability. A limited liability company (LLC) is a creature of state statute, and all technicalities must be followed very carefully. Yes, it is a pain to have to carry three to four checkbooks around, but it would be more of a pain should you lose all of your investments. Your $2 million umbrella insurance coverage may -- I repeat may -- be adequate protection, but if someone gets seriously injured or killed in one of your properties, it may not be enough. For maximum protection, set up a separate LLC for each of your properties and follow the rules. Ask your attorney for assistance. Benny L. Kass is a practicing attorney in Washington, D.C., and Maryland. No legal relationship is created by this column. |
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SOLD 7640 Live Oak Dr, Indian Hills Golf Course , By Cindy Hettinga $270,000 SOLD ALL CASH, Custom 4 bedroom, 2 1/2 bathrooms, 2073 Sqft. of living space, Lot: 20,908 sqft, built 1986! It's A Beauty, flat lot, RV potential |
| Share your love of California at www.yourpieceofcalifornia.com There’s no doubt about it. California is a great place to live. Eternal sunshine, miles of gorgeous beaches, majestic mountains, and beautiful stretches of desert – this state has something for everyone. With so much to offer, it’s no wonder everyone would like to own their own piece of California. Tell the world how special your piece of California is! Leave a short comment at www.yourpieceofcalifornia.com via your Facebook or Twitter account and join others in sharing the love for California neighborhoods, beaches, and mountains. Looking for a home - the right home - is a big task. To help your property search become a little easier, visit www.yourpieceofcalifornia.com. Not only will you find many great tools – from homes for sale to neighborhood information – you’ll be able to share your thoughts about your piece of California, and see what others have said about our state. |
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| Good Faith Estimate contains some 'quirks' By Dian Hymer As of Jan. 1, 2010, the Department of Housing and Urban Development (HUD) required lenders to provide mortgage borrowers with a new three-page Good Faith Estimate (GFE) to protect consumers who are applying for a mortgage. The intent of the GFE is to educate consumers about the key terms and costs of a mortgage, both at origination and ongoing. A loan originator completes the form, giving the borrower a summary of the loan particulars and information necessary to shop rates and to be sure they're comparing like-type mortgages. Although there's grumbling, mostly from mortgage brokers, lenders and closing/escrow agents, the format and information included in the new GFE is a step in the right direction. There are, however, some quirks. For example, the GFE doesn't provide a complete and accurate account of the borrower's costs. Page two provides an itemization of loan origination and settlement costs. The origination charge is itemized as one lump sum; it's not broken down. So, you don't know how much you're paying the appraiser for the appraisal, the loan originator for the origination fee, or other miscellaneous fees. Another shortcoming is in the way transfer taxes are disclosed. The entire amount of any transfer taxes is entered on the GFE, even if the sellers pay part or all of it. This could inflate the buyer's estimated settlement costs. To get around having to generate a GFE for buyers before they have committed to a given loan originator, some mortgage originators have developed worksheet quotes for buyers to use if they want to shop rates. HUD is adamant that these worksheets can't be used instead of a GFE. Furthermore, they provide the borrower no protection. HOUSE HUNTING TIP: The new federally mandated GFE provides protection for borrowers against being charged extra fees at closing that weren't disclosed on the GFE. An informal worksheet provides no such protection. Origination and settlement fees are grouped into three different categories. The first category is fees that can't increase between the time the GFE is issued and closing. Included in this category are the lender or mortgage broker's origination fee, transfer taxes and adjustments to loan origination charges after the borrower locks in an interest rate. Loan originators who miscalculate, causing fees to run higher at closing, have to make up the difference out of pocket. To cover themselves, some loan originators pad the Category one figure. The second category of fees can increase up to 10 percent at closing and includes such things as government recording charges and title insurance -- if the title insurer is identified by the lender, not by the borrower. This is done to encourage lenders to shop for the most cost-effective coverage for the consumer. The third category of fees can change at settlement and includes homeowners insurance and title insurance coverage if the borrower, not the lender, identifies the title insurer. The new GFE also includes a tradeoff table that shows what the interest rate would be if you paid a higher origination fee vs. a lower origination fee: the higher the fee, the lower the rate; the lower the fee, the higher the rate. Finally, there's a loan-shopping chart to use the mortgage information provided by one lender to compare with other lenders. There is no obligation to use a loan originator who completes a GFE for you. A loan originator can't refuse to provide a GFE to a prospective borrower who asks for one. As soon as a prospective borrower provides essential application information, such as Social Security number, property address, etc., the originator is to provide a GFE. THE CLOSING: Lenders are required to provide a GFE within three days of receiving the borrower's application. Dian Hymer, a real estate broker with more than 30 years' experience, is a nationally syndicated real estate columnist and author. |
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Sold 2349 S Greenwood Pl Ontario 91761 Sold $125,000 By C Hettinga Sold CASH $125,000 Real Fixer, Two-story condominium, private court yard. Attached 2 car garage. Near Grove/Philadelphia. 2 bedrooms, 2 1/2 bathrooms. Community pool and spa...Price $131,000 |
| Who THE ADDRESS BOOK By Realtor, Cindy Hettinga (909) 240-9394 HOW DOES IT ALL GET DONE... THE "WE KNOW THEM LIST" HERE IS A REFERRAL LIST OF SERVICES Our NEIGHBORHOOD REFI OR LOAN AGENT Loan Officer: Mr.Terry Fitch Preferred Mortgage Group Inc. Office: 866-603-4800 E-Mail: Terry@pmgloan.net AUTOMOBILE PROBLEMS: CALL AL & LEE'S UPLAND 909.946.5887 LEAKING ROOF? SMART ROOF, ASK FOR DON RESIDENTIAL 909-986-8770 COMMERCIAL/INDUSTRIAL ROOF LEAK? ROOF ENGINEERING: JOE 909.278.9164 MERCEDES BENZ ON THE FRITZ: CALL GREG, GS AUTOMOTIVE 909.923.3041 Bed & Breakfast: FourSisters.com On -Site Drapery Carpet & Upholstery Cleaning 909-980-7553 or 800-936-6748 Ask for Tim or Kathi Ring HOMEWORK: A+ Tutor 909.576.3216 PIANO TUNER: JOHN PAUL JACKSON 909.898.8786...ASK HIM TO PLAY BODY WORK..FOR VEHICLES: CALL MIKE MIKES AUTOMOTIVE 909.983.1210 MUSICIANS: HOLIDAY SINGERS CALL NORCO HIGH MUSIC DIRECTOR GEORGE GIORGETTI 909.736.3398 HEATING/AIR CONDITIONING NEED IT FIXED FOLKERT VANDER GAAST 909.923.3465 GARDENER/PROFESSIONAL LANDSCAPING FRANK VANDER VEEN 909.393.6244 HOME CLEANING BIZ 909.548.7901 DEB MULDER,"SHE MAKES A HOME SPARKLE" Re-finance your home, check on home loans, contact Tyler Jorgenson 909)910-1437 , Email:Tyler@TylerJorgenson.com GOT CHURCH? A MODERN WORSHIP SERVICE STOP BY FOR A CUP OF "SEATTLES BEST" COFFEE... THE BRIDGE, CHINO 9am or 10:30 WWW.TheBridge.Tv or (909) 627-5500 www.iNeedTheBridge.com ACCOUNTANT: GARY GENSKE 949.650.9580 HAIR-CUTS&STYLES... MIRA LOMA...SHARON 951.681.8877// "STRANDZ" CHINO...HILLARY 909.548.0300 JEWELRY..CALL PETE TO GET THE PHONE NO. "OSCARS" IS THE BEST IN LOS ANGELES WEB-SITE BUILDING: DAVE 909.982.2458 IT'S ALL ABOUT REFERRALS...THANKS. MAKE SURE YOU TELL HER WE "SENT YOU" REAL ESTATE: IDAHO CALL SUE RADFORD http://www.susanradford.mywindermere.com/ or call 208-721-1346 MAKE SURE YOU TELL HIM WE "SENT YOU" REAL ESTATE:COLORADO CALL JIM VAN HATTEM 970.290.9393 **DO YOU KNOW OF SOME ONE(YOU)RELIABLE AND WHO DOES A GOOD JOB..EMAIL ME AND I'LL ADD THEM TO THE LIST! THANKS. |
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| Protect real estate from Medicaid By Benny Kass DEAR BENNY: Seven years ago, when my mother was 80, my husband and I purchased cooperative apartment shares in a senior complex for her to live in. Since at least one of the tenants had to be over 55, we put her name on the shares, as well as my name. The actual paperwork reads: " 'My Mother's Name' or 'My Name' as joint tenants with right of survivorship and not as tenants in common." If my mother needs to move to assisted living or a nursing home, will Medicaid try to get possession of this apartment? I've called the co-op's attorney, senior law offices here in Reno, Nev., and I've called private attorneys. No one can give me an answer. One office suggested I call the Medicaid office. As much as I would like to, I think that might give Medicaid an opportunity to take what isn't hers. We used equity in our home to purchase this apartment. My mom lives on Social Security and could never afford this apartment. One lawyer suggested the co-op "reconvey" the share back to my name, but their bylaws require that whoever is on the deed live there. Any ideas? Are we safe in keeping this, selling it and keeping the monies, or will Medicaid take it? --Penny DEAR PENNY: This is a complicated question and I am surprised that the senior law offices were unable to assist. There are a number of "elder lawyers" throughout the country, and you can locate them on the Web. I searched "elder lawyers" and found a number of Web sites that should be of assistance to you. Generally, however, Medicaid (which is administered by the state, with each state having its own rules) does not "get possession" of property. But if your mother applies for Medicaid, I assume she will need to disclose her interest in the co-op as an asset. It is possible that the state will take into account the fact that she is not an "equitable" owner of the property (as she did not contribute to the purchase price of the property) and simply disregard the asset. But even if she is considered to be an owner for Medicaid purposes, the state may impose only a lien on the property rather than require it be sold. In fact, if the state considers the co-op interest an asset of your mother, it wouldn't require her to sell it, but could deny her benefits until her assets, including her interest in the house, were spent down to whatever the threshold is in Nevada. Many states allow a number of exceptions. For example, if a disabled family member (or a spouse, which I assume there is none) is living in the property, the Medicaid applicant would qualify for benefits and a lien would be imposed on the applicant's share of the property in the amount of any benefits paid -- but the benefits would need to be reimbursed when the property is sold or the disabled person or spouse dies. This is a highly specialized area of law, and not all attorneys understand the rules or the law. DEAR BENNY: I have a question about escrows for taxes and insurance. Let's say I am buying a home and last year's tax bill was $1,200 (or $100 per month). Can the lender set up escrow collecting $150 per month for taxes? --Nate DEAR NATE: My mathematical skills are limited, but the answer to your question is no. According to the federal Real Estate Settlement Procedures Act (commonly known as RESPA), a lender who collects money in escrow for real estate taxes and insurance can have only a two months' cushion on an annual basis. So, if the bank is collecting $150 per month, annually that comes to $1,800. A two-month cushion allows you to collect only $1,400, or $116.66 per month. But depending on when settlement takes place, the lender does have the right to collect sufficient funds (plus two months extra) to make sure that it can pay the taxes and insurance when they become due. Let's take this example: You settle (go to escrow) on May 15. The tax bill in your jurisdiction must be paid by Sept. 30, 2010, but is applied from January 2010 through December 2010. Because mortgage interest is calculated in arrears, your first payment will due in July. (Note: The lender will charge you interest at closing from May 15 to the end of that month.) By the time the real estate tax bill has to be paid, you will have made three payments in escrow (July, August and September). But the lender needs a full 12-month payment. Accordingly, the lender has the right to charge you -- at closing -- nine months' escrow to collect all the money needed, plus two months' cushion; in other words, the lender can charge you at closing for 11 months' escrow. Here's a consumer protection suggestion: Because too many lenders often do not make the tax or insurance payments on a timely basis -- or in some cases do not make the payments at all -- homeowners should send their lender a demand letter, once a year right after the taxes or insurance payments are due, requesting proof that those payments have, in fact, been made. For those jurisdictions where this information can be found online, you should learn how to access this from your local government's Web site. Benny L. Kass is a practicing attorney in Washington, D.C., and Maryland. No legal relationship is created by this column. |
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