[SK in CV]

I’m not underestimating the number of distressed borrowers. That number will continue to expand for another 2 years at least. What I think the CBO overestimated is the number of those distressed borrowers that will qualify under this program. Most distressed borrowers will not. The devil is in the details.

[SK in CV]

I’m not underestimating the number of distressed borrowers. That number will continue to expand for another 2 years at least. What I think the CBO overestimated is the number of those distressed borrowers that will qualify under this program. Most distressed borrowers will not. The devil is in the details.

[SK in CV]

I’m not underestimating the number of distressed borrowers. That number will continue to expand for another 2 years at least. What I think the CBO overestimated is the number of those distressed borrowers that will qualify under this program. Most distressed borrowers will not. The devil is in the details.

[SK in CV]

I’m not underestimating the number of distressed borrowers. That number will continue to expand for another 2 years at least. What I think the CBO overestimated is the number of those distressed borrowers that will qualify under this program. Most distressed borrowers will not. The devil is in the details.

[SK in CV]

You have a few things confused here. The FHA will not be purchasing any existing loans or even making new loans, they will be insuring loans. So their exposure is limited to losses on those new loans, only to the extent of the difference between the new loan balances and the liquidation values on those new loans which end going to trustee sales. The fees, which will be paid both by the old lenders, new lenders (which may be different) and borrowers should be sufficient to cover the losses. There will be no “built in” losses to be borne by the FHA, which you seem to imply. Those losses will be borne by the original lenders.

Additionally, the biggest fallacy in this plan is the CBO’s estimate that 400,000 distressed borrowers may be able to benefit. I suspect that estimate is off by at least an order of magnitude.

[SK in CV]

You have a few things confused here. The FHA will not be purchasing any existing loans or even making new loans, they will be insuring loans. So their exposure is limited to losses on those new loans, only to the extent of the difference between the new loan balances and the liquidation values on those new loans which end going to trustee sales. The fees, which will be paid both by the old lenders, new lenders (which may be different) and borrowers should be sufficient to cover the losses. There will be no “built in” losses to be borne by the FHA, which you seem to imply. Those losses will be borne by the original lenders.

Additionally, the biggest fallacy in this plan is the CBO’s estimate that 400,000 distressed borrowers may be able to benefit. I suspect that estimate is off by at least an order of magnitude.

[SK in CV]

You have a few things confused here. The FHA will not be purchasing any existing loans or even making new loans, they will be insuring loans. So their exposure is limited to losses on those new loans, only to the extent of the difference between the new loan balances and the liquidation values on those new loans which end going to trustee sales. The fees, which will be paid both by the old lenders, new lenders (which may be different) and borrowers should be sufficient to cover the losses. There will be no “built in” losses to be borne by the FHA, which you seem to imply. Those losses will be borne by the original lenders.

Additionally, the biggest fallacy in this plan is the CBO’s estimate that 400,000 distressed borrowers may be able to benefit. I suspect that estimate is off by at least an order of magnitude.

[SK in CV]

You have a few things confused here. The FHA will not be purchasing any existing loans or even making new loans, they will be insuring loans. So their exposure is limited to losses on those new loans, only to the extent of the difference between the new loan balances and the liquidation values on those new loans which end going to trustee sales. The fees, which will be paid both by the old lenders, new lenders (which may be different) and borrowers should be sufficient to cover the losses. There will be no “built in” losses to be borne by the FHA, which you seem to imply. Those losses will be borne by the original lenders.

Additionally, the biggest fallacy in this plan is the CBO’s estimate that 400,000 distressed borrowers may be able to benefit. I suspect that estimate is off by at least an order of magnitude.

[SK in CV]

You have a few things confused here. The FHA will not be purchasing any existing loans or even making new loans, they will be insuring loans. So their exposure is limited to losses on those new loans, only to the extent of the difference between the new loan balances and the liquidation values on those new loans which end going to trustee sales. The fees, which will be paid both by the old lenders, new lenders (which may be different) and borrowers should be sufficient to cover the losses. There will be no “built in” losses to be borne by the FHA, which you seem to imply. Those losses will be borne by the original lenders.

Additionally, the biggest fallacy in this plan is the CBO’s estimate that 400,000 distressed borrowers may be able to benefit. I suspect that estimate is off by at least an order of magnitude.

[SK in CV]

It is actually 85%. The new loan is 90% of the current appraised value, but the original lender has to pay a 5% in fees, which nets it 85%. Those that have been in the real estate business long enough to remember when FHA insured loans were more common, can attest to what sticklers they are for dotting every i and crossing every t. Faked appraisals will not be common. It will be a small bailout for the lenders (compared to the 60-78% of FMV at foreclosure date that they’re recovering now), and a small bailout for the borrowers. But a larger bailout for the market as a whole. It will remove distressed properties from the market.

But its unlikely to actually have the effect intended. The requirements on the borrower, related to the original loan, will be difficult to qualify for where the original loans were sub-prime and/or no and low doc loans. And yes, the FHA will watch that very carefully too. The program will be a well intended dud.

[SK in CV]

It is actually 85%. The new loan is 90% of the current appraised value, but the original lender has to pay a 5% in fees, which nets it 85%. Those that have been in the real estate business long enough to remember when FHA insured loans were more common, can attest to what sticklers they are for dotting every i and crossing every t. Faked appraisals will not be common. It will be a small bailout for the lenders (compared to the 60-78% of FMV at foreclosure date that they’re recovering now), and a small bailout for the borrowers. But a larger bailout for the market as a whole. It will remove distressed properties from the market.

But its unlikely to actually have the effect intended. The requirements on the borrower, related to the original loan, will be difficult to qualify for where the original loans were sub-prime and/or no and low doc loans. And yes, the FHA will watch that very carefully too. The program will be a well intended dud.

[SK in CV]

It is actually 85%. The new loan is 90% of the current appraised value, but the original lender has to pay a 5% in fees, which nets it 85%. Those that have been in the real estate business long enough to remember when FHA insured loans were more common, can attest to what sticklers they are for dotting every i and crossing every t. Faked appraisals will not be common. It will be a small bailout for the lenders (compared to the 60-78% of FMV at foreclosure date that they’re recovering now), and a small bailout for the borrowers. But a larger bailout for the market as a whole. It will remove distressed properties from the market.

But its unlikely to actually have the effect intended. The requirements on the borrower, related to the original loan, will be difficult to qualify for where the original loans were sub-prime and/or no and low doc loans. And yes, the FHA will watch that very carefully too. The program will be a well intended dud.

[SK in CV]

It is actually 85%. The new loan is 90% of the current appraised value, but the original lender has to pay a 5% in fees, which nets it 85%. Those that have been in the real estate business long enough to remember when FHA insured loans were more common, can attest to what sticklers they are for dotting every i and crossing every t. Faked appraisals will not be common. It will be a small bailout for the lenders (compared to the 60-78% of FMV at foreclosure date that they’re recovering now), and a small bailout for the borrowers. But a larger bailout for the market as a whole. It will remove distressed properties from the market.

But its unlikely to actually have the effect intended. The requirements on the borrower, related to the original loan, will be difficult to qualify for where the original loans were sub-prime and/or no and low doc loans. And yes, the FHA will watch that very carefully too. The program will be a well intended dud.

[SK in CV]

It is actually 85%. The new loan is 90% of the current appraised value, but the original lender has to pay a 5% in fees, which nets it 85%. Those that have been in the real estate business long enough to remember when FHA insured loans were more common, can attest to what sticklers they are for dotting every i and crossing every t. Faked appraisals will not be common. It will be a small bailout for the lenders (compared to the 60-78% of FMV at foreclosure date that they’re recovering now), and a small bailout for the borrowers. But a larger bailout for the market as a whole. It will remove distressed properties from the market.

But its unlikely to actually have the effect intended. The requirements on the borrower, related to the original loan, will be difficult to qualify for where the original loans were sub-prime and/or no and low doc loans. And yes, the FHA will watch that very carefully too. The program will be a well intended dud.

[SK in CV]

Ask for amateur advice ….you get amateur advice.

Please, see an attorney and/or a CPA. Much of this advice is just plain wrong.

F’rinstance:

LLC’s and corporations are NOT the same.

Selling the stock in corporation (or LLC) who’s only asset is a piece of real property WILL trigger a reassessment for property tax purposes.

Multiple LLC’s are NOT necessary in most cases, and are simply a waste of money, for both the fees and the administrative costs. (This is certainly the case if you’re planning on buying a few SFR’s)And there are what may be significant tax implications that are different between individual ownership and LLC or corporate ownership.

And what nobody has mentioned. While the limited liablity afforded to LLC’s might be a good idea, an even better idea is to buy insurance. Umbrella policies are cheap cheap cheap. Insurance coverage is the first, and usually the ONLY thing that plaintiff attorneys look at, unless you have been grossly negligent and there are extraordinary damages.

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