February 29, 2016
Airbnb Host Tax Break
Newsday quoted me in Tax Breaks You May Have Overlooked: Airbnb, Dental Bills. It reads,
It’s time for that dreaded annual date with Uncle Sam.
You worry about how much it’s going to cost you. He’s usually not one to settle for a movie and McDonald’s. Relax, maybe there might be tax breaks you’ve overlooked.
– Deduct advice
The IRS will let you deduct certain expenses incurred on your taxable investments over and above 2% of your adjusted gross income (AGI). This could be investment counsel and advice, including subscriptions to financial publications, software or online services used to manage your investments, says Kyle Ryan, executive vice president of Personal Capital Advisors in Redwood City, California.
– Cash in on the dentist
Many people overlook medical expenses because you can only deduct the amount that exceeds 10% (7.5% if you’re over 65) of AGI, but dental work, which, even if you have insurance, can have high out-of-pocket costs, may qualify for a medical deduction, says David Isaacs, a CPA with UHY Advisors in Manhattan.
– Home sweet home
Maybe you jumped on the Airbnb bandwagon and rented out your home. If you did for up to two weeks, David Reiss, a Brooklyn Law School professor, specializing in real estate has good news, “that income is tax free.”
February 29, 2016 | Permalink | No Comments
Monday’s Adjudication Roundup
- A suit under the Telephone Consumer Protection Act (TCPA) for unwanted text messages against VoiceShot LLC and Kale Realty LLC, a real estate agency, was dismissed when the court found that the law did not apply to their conduct. The court found that VoiceShot was a “common carrier” providing telecommunication services and thus is immune from TCPA liability.
- The Court of Appeals for the Ninth Circuit held that Fannie Mae and Freddie Mac are not considered “federal agencies” under the False Claims Act, but rather non-governmental third parties in particular circumstances, including spending money on the government’s behalf.
- The S. Securities and Exchange Commission receives $147 million in illicit profit and $1 million in civil penalties from Louis Schooler, who deceived investors to buying into a general partnership at exorbitant, undisclosed markups.
- In cases alleging failure in trustee duties on residential mortgage-backed securities, S. Bank won (partially) when the court dismissed claims from the federal credit union regulator, but allowed private investor contract breach claims to continue.
- UBS AG will pay $33 million in settlement with National Credit Union Association for claims alleging that UBS lied on offering documents to residential mortgage-backed securities.
February 29, 2016 | Permalink | No Comments
February 26, 2016
Vacant Land in NYC
NYC Comptroller Stringer has released an Audit Report on the Development of City-Owned Vacant Lots by the New York City Department of Housing Preservation and Development. Stringer has taken some cheap shots on Mayor DeBlasio’s housing plans before (here for instance). This report amounts to another one. The Audit Findings and Conclusion read,
Our audit found that the City owns over a thousand vacant lots that could be developed under existing urban renewal programs, but many of these lots have been allowed to languish and remain undeveloped for up to 50 years or longer. While HPD contends that over the years it has disposed of most of the lots it has been responsible for, we found that as of September 18, 2015, HPD listed 1,131 vacant lots under its jurisdiction. Further, we found that although HPD solicits developers to build on these properties, it has not established plans with realistic time schedules to actually transfer City-owned vacant properties to developers.
Pursuant to General Municipal Law § 502, HPD has devised urban renewal plans for areas that include its vacant properties. However, we found that the projected schedules are often pushed to a later date and sometimes no date is specified at all, notwithstanding the fact that the law requires “a proposed time schedule for the effectuation of such plan.” Accordingly, it appears that schedules with adequate procedures to enable the transfer of City-owned properties to developers in accordance with those schedules have not been consistently formulated. Finally, we identified an additional 340 City-owned vacant lots under the jurisdiction of other City agencies that could be considered to be used for residential construction. (2)
Even the language of this summary reveals the Comptroller’s spin. It is laughable to say that the City has allowed vacant land “to languish and remain undeveloped for up to 50 years or longer.” The fact is that the City took ownership of much of this land during the ’60s and ’70s because it was abandoned by the owners who did not pay their property taxes. Much of the land had absolutely no value for decades.
This has certainly changed in the last 20 years or so, so it is worth evaluating whether the City should be taking more aggressive steps to get this land developed. Certainly one would think that this Mayor would want to do just that. And indeed, the Comptroller’s report shows that the Mayor has slated over half of those parcels for development over the next few years. The City’s response to the Audit indicates that many of the remaining parcels pose development challenges for residential development.
My take (having written extensively about abandoned land in NYC, here for instance) is that Stringer is making a mountain out a molehill. Every mayor from Koch through De Blasio has attempted to develop or sell much of the vacant land owned by the City. This audit fails to demonstrate that the City has a serious problem on this count.
February 26, 2016 | Permalink | No Comments
Friday’s Government Reports Roundup
- The New York Federal Reserve Bank released its Household Debt and Credit quarterly report, stating that total household indebtedness is about $12.1 trillion, which increased in Q4 2015, while repayment rates have improved.
- HUD released its grant allocations to support affordable housing for Native Americans. It will give $660 million to 587 Native American tribes under the Indian Housing Block Grant allocations.
February 26, 2016 | Permalink | No Comments
February 25, 2016
Docs You Need for A Mortgage
HSH.com quoted me in The Documents You Need To Apply for a Mortgage. It opens,
When it comes time to apply for a mortgage in 2016, you might be surprised at how much documentation you’ll need when applying for a home loan.
J.D. Crowe, president of Southeast Mortgage in Lawrenceville, Georgia, says most of the documentation should be familiar to you if you have applied for a mortgage loan in the last five years. If you’re new to the mortgage market this year, he says, this is all new.
The new Qualified Mortgage rules that took effect on January 10, 2014 make this paperwork even more important. To meet the new Qualified Mortgage rules, lenders will be even more diligent in collecting the paperwork that proves that you can afford your monthly mortgage payments.
David Reiss, professor of law at Brooklyn Law School in Brooklyn, N.Y., says that while the documentation requirements under the new Qualified Mortgage rules might come as a shock to those who haven’t applied for a mortgage since 2008, they are common-sense requirements for the most part.
“These are really common-sense rules,” Reiss says. “The new rules say that mortgage lenders are no longer allowed to throw out the common-sense standards of lending money during boom times, when they might be tempted to overlook long-term financial goals for quick profits. If the rules help that happen, they’ll be a good thing.”
February 25, 2016 | Permalink | No Comments
Thursday’s Advocacy & Think Tank Roundup
- The Economic Policy Institute found that unemployment rates varied considerably by state and race in Q4 2015.
- The Housing Partnership Network released report on comparisons between affordable housing in the United Kingdom versus the United States.
- The National Housing Conference released its Housing Landscape 2016 Report, finding that in general housing costs are continually increasing, growing about six percent from 2011 to 2014.
February 25, 2016 | Permalink | No Comments
February 24, 2016
Challenging Wrongful Foreclosures
The California Supreme Court issued an opinion a few days ago that has been getting a lot of attention, Yvanova v. New Century Mortgage Corp., S218973 (Feb. 18, 2016). The opinion opens by noting that
The collapse in 2008 of the housing bubble and its accompanying system of home loan securitization led, among other consequences, to a great national wave of loan defaults and foreclosures. One key legal issue arising out of the collapse was whether and how defaulting homeowners could challenge the validity of the chain of assignments involved in securitization of their loans. (1)
The Court concludes that
a home loan borrower has standing to claim a nonjudicial foreclosure was wrongful because an assignment by which the foreclosing party purportedly took a beneficial interest in the deed of trust was not merely voidable but void, depriving the foreclosing party of any legitimate authority to order a trustee’s sale. (30)
First, let us be clear what it is NOT saying: “We do not hold or suggest that a borrower may attempt to preempt a threatened nonjudicial foreclosure by a suit questioning the foreclosing party’s right to proceed.” (2) This is an important distinction between challenging a nonjudicial foreclosure and having standing to bring a wrongful foreclosure tort action.
And let us be clear as to what it is saying: if a homeowner argues that that an assignment of a deed of trust is void, that can provide the basis for a wrongful foreclosure action because it “is no mere ‘procedural nicety,’ from a contractual point of view, to insist that only those with authority to foreclose on a borrower be permitted to do so.” (22) Quoting Adam Levitin, the Court finds that
“Such a view fundamentally misunderstands the mortgage contract. The mortgage contract is not simply an agreement that the home may be sold upon a default on the loan. Instead, it is an agreement that if the homeowner defaults on the loan, the mortgagee may sell the property pursuant to the requisite legal procedure.” (23, italics changed)
Sounds like common sense to me.
February 24, 2016 | Permalink | No Comments
