Credit report error holding up your home purchase? How to fix it

If there’s a mistake on your report, whom do you tell — and how long will it be before it’s corrected?

By MSN Money partner Fri 2:53 PM

This post comes from Jeanine Skowronski at partner site MainStreet.

By far the most questions we receive from readers for our weekly credit Q&A series concern credit report disputes. And while we’ve previously covered the option of contesting information appearing on a credit report, we’ve never actually delved into what happens after a consumer has done so. That is, until now.

The infographic at the end of this post illustrates how a dispute is handled by the three major credit bureaus — Equifax, TransUnion and Experian. As previously reported, the big three furnish varying reports to a vast majority of the nation’s lenders.

Under the Fair Credit Reporting Act, both the credit reporting company and the information provider (typically the lender or collections agency) are responsible for investigating and/or correcting inaccurate or incomplete information appearing on a person’s credit report and are given 30 days to do so.

But careful observers will be quick to notice that, under current operating procedures, this investigation is handled by the lender, not the bureau who is being notified of the dispute.

“We go back on behalf of the consumer to the source to verify the records are being reported accurately,” says Rod Griffin, director of public education for Experian. “They let us know if the information should be updated or Read More of This Article…

The Don Johnson Realty Group is a resale real estate brokerage located in Murrieta, California. We specialize in short sales, rental properties, foreclosures and mortgage lending.  http://www.djrealtygroup.com

Builders highlight often-hidden costs of buying a foreclosed home

By Kenneth R. Harney
February 19, 2012
Reporting from Orlando, Fla.—

Home builders are switching tactics and confronting head-on one of their biggest nemeses: foreclosed houses that not only lure buyers away with deeply discounted prices but simultaneously depress the appraisal values of newly built homes.

At a packed session at the International Builders’ Show expo Feb. 8-11 in Orlando, consultants and builders said that with gluts of foreclosures in major markets around the country — and more forecast to arrive in the next two years — the time has come to stop being passive and to begin aggressively educating buyers about the often hidden costs of buying foreclosures… Read More of This Article

The Don Johnson Realty Group is located in the Inland Empire, California. We specialize in new and pre-owned home sales. For more information please visit www.DJRealtyGroup.com or call us at 714-856-3992

Tax Deductions When You Work from Home

http://platform.twitter.com/widgets/hub.1326407570.htmlReposted by: DonJohnson Realty Group

By: Donna Fuscaldo

Published: January 3, 2012

Working from home can offer many advantages including tax deductions. Just take care what you try to write off for your home office on your return. Passing the IRS litmus test To meet IRS guidelines, your home office must be your principal place of business, or the place you see clients in the normal course of business. Parts of your home you use to store products or equipment for your business also count. That doesn’t mean that all your work has to be done from home. If you’re an outside salesperson, you probably spend most of your work time elsewhere. But if you do you billing and return customer calls primarily from your home, your home office should qualify. You can also qualify for the deduction if your employer requires you to work from home, as long as you don’t charge your employer rent. One big catch is that you must maintain the at-home office for your employer’s convenience, not your own, such as to complete reports at night or on weekends. Self-employed workers use IRS Form 8829 to calculate the deduction, which they list on Schedule C. Measuring your home office The amount you can deduct for your home office depends on the percentage of your home used for business. Your work space doesn’t need to be a separate room—a table in a corner qualifies. But it has to be an area that’s used solely for business. The tax break also covers separate structures on your property, like a detached garage you’ve converted to an office. Unlike an office inside your home, a separate structure doesn’t have to be your main place of business to qualify for a deduction. That’s because the IRS believes your family is less likely to use a separate structure as a part-time play area or den, says Mark Luscombe, principal analyst for tax and consulting at CCH. To calculate what percentage of your house the home office occupies, divide your home office’s square footage by the total square footage of your home. If your home is 3,000 square feet and your office is 150 square feet, for example, you’d use 5% to calculate your deductions. Not sure how big your house is? Check the documents you received when you bought your home—there’s probably a detailed rendering—or measure the outside of your home and multiply length times width. What can you deduct?Once you’ve figured out what percentage of your home you use for business, you can apply that percentage to different home expenses. These include:
  • Mortgage interest
  • Real estate taxes
  • Utilities (heating, cooling, lights)
  • Home repairs and maintenance (painting, cleaning service)
  • Home owners insurance premiums
Just take each expense and multiply it by your home office percentage (the 5% mentioned above). That’s the amount you can deduct as a business expense. So if you spend $150 a month on electricity, you can deduct $7.50 as a business expense. That adds up to a $90 deduction per tax year. Save bills or cancelled checks to prove what you spent in case of an IRS audit. Take an hour a week to file them away. Also, only repairs can be expensed; improvements must be depreciated. Don’t forget depreciation Depreciation is based on the idea that everything—even something like a home—wears out eventually. To figure home office depreciation, start by calculating the tax basis of your home: generally the purchase price plus the cost of improvements, minus the value of the land it sits on. Next, multiply the tax basis by the percentage of your home used for work. This gives you the tax basis for your home office. Usually, depreciation deductions for a home office are figured over a 39-year period. There are caveats. For a crash course, read IRS Publication 946 or talk to a tax pro. Keep in mind that depreciation deductions on your home office increase the amount of profit on a home sale that is subject to taxes. There’s an exclusion of $250,000 of profit if you’re a single filer, $500,000 for joint filers. Consult with a qualified tax professional on how depreciation deductions affect your tax liability when you sell. __________________________________________________________________________________ For questions, homebuying needs, mortgage questions, and general real este inquiries, email us at findyouahome@msn.com www.DJRealtyGroup.com
This article provides general information about tax laws and consequences, but shouldn’t be relied upon as tax or legal advice applicable to particular transactions or circumstances. Consult a tax professional for such advice; tax laws may vary by jurisdiction.

Protecting Your Credit During Divorce

By Don Johnson, Owner/CEO
Don Johnson Realty Group

When a marriage ends in divorce, the lives of those involved are changed forever. During this time of upheaval, one thing that shouldn’t have to change is the credit status you’ve worked so hard to achieve.

Unfortunately, for many, the experience is the exact opposite. Unfulfilled promises to pay bills, the maxing out of credit cards, and a total breakdown in communication frequently lead to the annihilation of at least one spouse’s credit. Depending upon how finances are structured, it can sometimes have a negative impact on both parties.

The good news is it doesn’t have to be this way. By taking a proactive approach and creating a specific plan to maintain one’s credit status, anyone can ensure that “starting over” doesn’t have to mean rebuilding credit.

The first step for anyone going through a divorce is to obtain copies of your credit report from the 3 major agencies: Equifax, Experian®, and TransUnion®. It’s impossible to formulate a plan without having a complete understanding of the situation. (Once a year, you may obtain a free credit report by visiting www.AnnualCreditReport.com.)

Once you’ve gathered the facts, you can begin to address what’s most important. Create a spreadsheet, and list all of the accounts that are currently open. For each entry, fill in columns with the following information: creditor name, contact number, the account number, type of account (e.g. credit card, car loan, etc.), account status (e.g. current, past due), account balance, minimum monthly payment amount, and who is vested in the account (joint/individual/authorized signer).

Now that you have this information at your fingertips, it’s time to make a plan.

There are two types of credit accounts, and each is handled differently during a divorce. The first type is a secured account, meaning it’s attached to an asset. The most common secured
accounts are car loans and home mortgages. The second type is an unsecured account. These accounts are typically credit cards and charge cards, and they have no assets attached.

When it comes to a secured account, your best option is to sell the asset. This way the loan is paid off and your name is no longer attached. The next best option is to refinance the loan. In other words, one spouse buys out the other. This only works, however, if the purchasing spouse can qualify for a loan by themselves and can assume payments on their own. Your last option is to keep your name on the loan. This is the most risky option because if you’re not the one making the payment, your credit is truly vulnerable. If you decide to keep your name on the loan, make sure your name is also kept on the title. The worst case scenario is being stuck paying for something that you do not legally own.

In the case of a mortgage, enlisting the aid of a qualified mortgage professional is extremely important. This individual will review your existing home loan along with the equity you’ve built up and help you to determine the best course of action.

When it comes to unsecured accounts, you will need to act quickly. It’s important to know which spouse (if not both) is vested. If you are merely a signer on the account, have your name removed immediately. If you are the vested party and your spouse is a signer, have their name removed. Any joint accounts (both parties vested) that do not carry a balance should be closed immediately.

If there are jointly vested accounts which carry a balance, your best option is to have them frozen. This will ensure that no future charges can be made to the accounts. When an account is frozen, however, it is frozen for both parties. If you do not have any credit cards in your name, it is recommended you obtain one before freezing all of your jointly vested accounts. By having a card in your own name, you now have the option of transferring any joint balances into your account, guaranteeing they’ll get paid.

Ensuring payment on a debt which carries your name is paramount when it comes to preserving credit. Keep in mind that one 30-day late payment can drop your credit score as much as 75 points. It is also important to know that a divorce decree does not override any agreement you have with a creditor. So, regardless of which spouse is ordered to pay by the judge, not doing so will affect the credit score of both parties. The message here is to not only eliminate all joint accounts, but to do it quickly.

Divorce is difficult for everyone involved. By taking these steps, you can ensure that your credit remains intact.


Don Johnson is the owner of Don Johnson Realty Group, and a Licensed Broker with the California Department of Real Estate. If you would like to obtain more information regarding this article, please contact Don at findyouahome@msn.com or call 714-856-3992.

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Fannie Mae Rolls Out Online-only REO Offers

On February 7, 2012, in Breaking News, Mortgage Financing, Selling, by Robert Freedman

If you’re working with a buyer who’s interested in submitting an offer for a Fannie Mae REO, you’ll have to do it online. The secondary mortgage market company last week launched an all-online system for submitting offers on its inventory of foreclosed homes.

Here’s how Fannie describes it on its HomePath website:

“Making an offer to purchase a HomePath property is now quick, easy and entirely online! Beginning February 2, all offers on HomePath properties must be made using the HomePath Online Offer system. If you’re ready to make an offer, just have your real estate professional click the “Make an Offer” button on the property information and follow the instructions.”

Only licensed agents can make offers, so any consumers shopping for a home on Fannie’s HomePath site have to contact an agent first.

If you’re not already registered as an agent with the site, you’ll need to do that, then click the “Make an Offer” button and follow the instructions. You’ll have to be able to scan documents and otherwise be prepared to input information digitally.

Registering with the site so you can submit offers as a selling agent is not the same thing as registering with Fannie Mae as an approved listing agent. That seems obvious, but sometimes it helps to state the obvious to avoid confusion. To become a listing agent for Fannie Mae in your market, you have to submit an application (also an online process) and then go through its proprietary selection process, which requires you to submit information about your practice. Every market is different, but generally the company works with a handful of brokers or agents that it has selected to list its REO properties.

The company says it pays a commission of 2.5 percent to the listing broker, with a $1,000 minimum, and a commission of 3 percent to the selling broker, also with a $1,000 minimum. It says it has some additional selling incentives in some markets.

Fannie gives owner-occupant buyers a 15-day window after a property comes on the market to make an offer without competition from investors. Offers made by investors during that “first-look” period are rejected from the system with instructions to resubmit after the 15-day period ends, if the property isn’t under contract by that time. The offers are not kept in the system and queued up.

Buyers can use any financing they want, including Fannie Mae financing through its two HomePath mortgage programs, one for purchases and one for purchases with renovation. If the buyer is using HomePath financing, Fannie only requires a downpayment of 3 percent, waives the appraisal and also doesn’t require mortgage insurance. Investors can get up to 90 percent financing.

You can learn more about online submissions on the Real Estate Professionals’ page on the HomePath website and click on “HomePath Online Offers Support page.”

For more real estate questions and resources: visit us at www.djrealtygroup.com

Tax Deductions When You Work from Home

http://platform.twitter.com/widgets/hub.1326407570.htmlReposted by: DonJohnson Realty Group

By: Donna Fuscaldo

Published: January 3, 2012

Working from home can offer many advantages including tax deductions. Just take care what you try to write off for your home office on your return. Passing the IRS litmus test To meet IRS guidelines, your home office must be your principal place of business, or the place you see clients in the normal course of business. Parts of your home you use to store products or equipment for your business also count. That doesn’t mean that all your work has to be done from home. If you’re an outside salesperson, you probably spend most of your work time elsewhere. But if you do you billing and return customer calls primarily from your home, your home office should qualify. You can also qualify for the deduction if your employer requires you to work from home, as long as you don’t charge your employer rent. One big catch is that you must maintain the at-home office for your employer’s convenience, not your own, such as to complete reports at night or on weekends. Self-employed workers use IRS Form 8829 to calculate the deduction, which they list on Schedule C. Measuring your home office The amount you can deduct for your home office depends on the percentage of your home used for business. Your work space doesn’t need to be a separate room—a table in a corner qualifies. But it has to be an area that’s used solely for business. The tax break also covers separate structures on your property, like a detached garage you’ve converted to an office. Unlike an office inside your home, a separate structure doesn’t have to be your main place of business to qualify for a deduction. That’s because the IRS believes your family is less likely to use a separate structure as a part-time play area or den, says Mark Luscombe, principal analyst for tax and consulting at CCH. To calculate what percentage of your house the home office occupies, divide your home office’s square footage by the total square footage of your home. If your home is 3,000 square feet and your office is 150 square feet, for example, you’d use 5% to calculate your deductions. Not sure how big your house is? Check the documents you received when you bought your home—there’s probably a detailed rendering—or measure the outside of your home and multiply length times width. What can you deduct?Once you’ve figured out what percentage of your home you use for business, you can apply that percentage to different home expenses. These include:
  • Mortgage interest
  • Real estate taxes
  • Utilities (heating, cooling, lights)
  • Home repairs and maintenance (painting, cleaning service)
  • Home owners insurance premiums
Just take each expense and multiply it by your home office percentage (the 5% mentioned above). That’s the amount you can deduct as a business expense. So if you spend $150 a month on electricity, you can deduct $7.50 as a business expense. That adds up to a $90 deduction per tax year. Save bills or cancelled checks to prove what you spent in case of an IRS audit. Take an hour a week to file them away. Also, only repairs can be expensed; improvements must be depreciated. Don’t forget depreciation Depreciation is based on the idea that everything—even something like a home—wears out eventually. To figure home office depreciation, start by calculating the tax basis of your home: generally the purchase price plus the cost of improvements, minus the value of the land it sits on. Next, multiply the tax basis by the percentage of your home used for work. This gives you the tax basis for your home office. Usually, depreciation deductions for a home office are figured over a 39-year period. There are caveats. For a crash course, read IRS Publication 946 or talk to a tax pro. Keep in mind that depreciation deductions on your home office increase the amount of profit on a home sale that is subject to taxes. There’s an exclusion of $250,000 of profit if you’re a single filer, $500,000 for joint filers. Consult with a qualified tax professional on how depreciation deductions affect your tax liability when you sell. __________________________________________________________________________________ For questions, homebuying needs, mortgage questions, and general real este inquiries, email us at findyouahome@msn.com www.DJRealtyGroup.com
This article provides general information about tax laws and consequences, but shouldn’t be relied upon as tax or legal advice applicable to particular transactions or circumstances. Consult a tax professional for such advice; tax laws may vary by jurisdiction.