DeKalb provides deed alert system

The DeKalb County superior court clerk’s real estate office records all deeds in the county. According to the real estate division’s website, they receive and process over 120,000 documents a year. Given that volume, it is understandable that sometimes the right information may not be recorded, either due to an honest mistake by the person or entity filing the document or the person processing it, or due to something more sinister.

In 2014, the superior court clerk Debra DeBerry launched a property fraud registry alert system. The clerk’s office says, “The system is designed to provide property owners with the ability to register properties and receive notice anytime something is recorded on their property.” WSB-TV reported that it was the first real estate fraud alert system in the state. WSB also reported that DeKalb County has been “at the center” of house stealing schemes in Georgia.

Late last year, The Wall Street Journal reported that deed fraud is on the rise. They reported that “Investors who own several properties are especially vulnerable, prosecutors said, as they are less likely to notice if someone moves into a home they don’t visit regularly.” A booming real estate market can also tempt fraudsters.

DeKalb’s fraud registry seems like a good system for making property owners aware of documents filed involving their property. In my role with property taxes, I have observed several instances where it would have been helpful to receive an alert about a filing on particular properties.

You can sign up for the registry here.

Fallout from the housing bubble

We seem to be hearing more lately on the enforcement side of the housing market.

Although the defendants have denied any wrongdoing, Countrywide has agreed to settle lawsuits with its shareholders for $600 million for misrepresenting the risks associated with its loose lending standards, according to the Los Angeles Times last night.

This follows last week’s announcement that Citigroup will settle with investors for $75 million over similar allegations.

California recently announced that it has revoked a record number of real estate licenses over the past year, because “The down turn in the real estate market has uncovered abusive practices which has caused the number of disciplinary actions to rise.” Mortgage loan modification fraud is being outpaced by short sale abuses according to the California Real Estate Commission.

In June, the U.S. Department of Justice announced an anti-fraud initiative called Operation Stolen Dreams to investigate and prosecute mortgage fraud.

According to the DOJ, the U.S. Attorney for the Northern District of Georgia is among the leaders of mortgage fraud prosecution.  More on DOJ’s efforts in North Georgia, including brief summaries of recent mortgage fraud cases in Atlanta, Lithonia, and Dunwoody, can be found here.

Upcoming events

I meant to post this earlier this week so I could have helped advertise a little for the City of Decatur Development Department’s homeowner night on Tuesday.  Forgive me!

Fortunately, a couple other events are coming up that would be of interest to Decatur homeowners and property taxpayers:

1. According to DecaturMetro, Decatur realtors Terry Michel and Sean Dammann will host a forum tonight on the state of Decatur’s real estate market. Read more details here.
2. Of special interest to owners of older homes, the Decatur Old House Fair will take place this Saturday. Regina Brewer, City of Decatur Preservation Planner, says “This day-long celebration will feature new ideas, practical advice, innovative materials, and quality services for owners of older homes. Homeowners can attend how-to seminars and workshops on restoring old windows, creating a maintenance plan, tax credits for rehabilitation, historic landscapes, researching an old house, and much more.” Visit http://www.decaturoldhousefair.com/ for more information.
3. A webinar tailored for businesses appealing their valuation will be conducted by Advantax on March 23. I can’t endorse Advantax or the content of the class, and it seems a little pricey for a webinar, but it may be beneficial to some commercial property owners.

Please let me know if I’ve left something relevant out!

Housing outlook for 2010

What does 2010 hold for home buyers, sellers, and people just staying put? I’d like to share some of the more informative predictions I’ve come across on the web.

The Wall Street Journal sees 2010 as a year of 1) higher mortgage rates, 2) tighter loan standards from Fannie Mae and Freddie Mac (which back 90 percent of all mortgages), 3) sluggish loan modifications, 4) more adjustable-rate mortgage (ARM) resets, and 5) uncertainties surrounding homebuyer tax credits. The link to the full article is here, but here’s what they have to say specifically about ARM resets:

More loan resets: Analysts and pundits have been warning for years about the coming wave of option adjustable-rate mortgages that will jump to sharply higher payments beginning this year. Those loan recasts are concentrated particularly in high-cost housing markets, such as coastal California and other areas where homes became increasingly unaffordable at the height of the housing boom. Meanwhile, more interest-only loans that allowed borrowers to avoid making principle payments for three, five, or seven years will reset to higher payments. Those loans became especially popular among borrowers of jumbo loans, which are too large for government backing and range from $417,000 in most parts of the country to as high as $729,750 in the most expensive housing markets. Many of these borrowers owe more than their homes are worth, leaving them particularly vulnerable to default if they can’t afford the higher payments. That could cause more pain for mid-to-upper end housing markets that began to show more signs of stress in 2009.

Meanwhile, CNN Money suggests one of the major issues of 2010 could be a decline of at least 3 percent in home prices (note: I found this piece thanks to Bubble Meter):

NEW YORK (CNNMoney.com) -- After four months of gains, home prices flattened in October. Worse yet, industry insiders think that they'll soon start to fall.

Prices have risen more than 3% since May, according to S&P/Case-Shiller.

But most forecasts predict price declines in 2010, with possible losses ranging from anywhere from 3% on up. Fiserv Lending Solutions, a financial analytics firm, forecasts that prices will fall in all but 39 of the 381 markets it covers, with an average drop of 11.3%.

"We've seen recent price stabilization because of low mortgage interest rates and the impact of the first-time homebuyers tax credit," said Pat Newport of IHS Global Research. "But there are really good reasons to think prices will now start going down."

There are three main reasons for the reversal: a coming flood of foreclosures, rising interest rates and the eventual end of the tax credits.

A few final insights: 1) although they aren’t talking about just foreclosures, the Los Angeles Times speculates that 2010 may be the “year of the real estate auction,” 2) the housing & economics blog Calculated Risk says short sales will rise in 2010 (and gives helpful supporting graphs), and 3) the Atlanta Journal-Constitution’s own forecast is mixed.

Homebuyer tax credits: two views

Looking back over 2009, the first-time homebuyer tax credit is still generating controversy in political and tax circles. TaxVox, the tax blog of the Urban Institute and Brookings Institution, called the first-time homebuyer tax credit the third worst tax idea of 2009. The Tax Policy Foundation, using the credit as an example, called the “influence of the housing lobby on the federal tax code,” one of the top ten tax stories of the decade.

Today I want to share excerpts from both sides of the argument. First, the skeptic’s view from TaxVox:

The early returns are coming in on the First-Time Homebuyer Tax Credit. And it appears to be a bigger boondoggle than even I thought it would be.

At a House Ways & Means Oversight subcommittee hearing today, the Internal Revenue Service inspector general reported that the IRS is auditing more than 100,000 of the roughly 1.4 million returns that included a claim for the credit. This is a staggering audit rate for an agency that usually reviews only about 1 percent of returns.

And what the agency has found is jaw-dropping. Almost 74,000 buyers claimed the credit even though they probably owned a house over the past three years (the credit is only available to those who did not own during that period). One dead give-away: More than 12,000 of this bunch claimed the residential energy credit sometime during the past three years. Another 19,000 filed for the homebuyer credit even though they had not actually gotten around to buying a house, a fairly spectacular exhibition of chutzpah. And 580 credits were claimed on behalf of children, including at least one four-year-old—obviously a budding real estate developer.

Some taxpayers were more confused than crooked. Almost 50,000, who didn’t realize the credit increased from $7,500 to $8,000 in 2009, may have claimed less they deserved. But there was plenty of fraud too. The agency is investigating 167 separate criminal schemes associated with the credit.

And there is more. In a separate study, the Government Accountability Office concluded that in 2008-2009 more than 25,000 credits were claimed by people who reported no income and another 165,000 by those earning $25,000 or less. Care to wager how long it will be before those houses end up in foreclosure? If they were ever actually purchased, that is.

Meanwhile, supporters of the homebuyer tax credit have argued that the homebuyer tax credit has buoyed the housing market during difficult times. Georgia’s own Sen. Johnny Isakson has been a forceful advocate for the credit, and he made the following remarks on the Senate floor in November during debates on extending the credit:

We learned about 8 months ago that a tax credit for first-time home buyers worked. It worked to bring back the entry level marketplace in housing, and it helped to begin to stabilize the housing market which led us in late 2007 into the difficulties we have experienced over the last 20 months. Extending it is important, as long as everybody still understands permanent extension would be bad. Extending it to next April, which this bill does, with a closing no later than June 30, allows the American housing market and first-time home buyers to exercise their right to take tax they pay, convert it to equity in the investment and net appreciating asset, and help stimulate what is the rock-solid base of the American economy.

We also add, in addition to the $8,000 credit extension for first-time home buyers, a move-up buyer tax credit of $6,500. This is the cornerstone of the substitute before us now. It offers to any previous homeowner who has lived in their home for at least the last 5 years the opportunity to sell that home, invest in a new home, and take up to a $6,500 tax credit…

In response to the Internal Revenue Service concerns we expressed a few months ago on fraud, we put in every single request they made for fraud to see to it the HUD-1 is attached to tax statements, to see to it there is no fraudulent claim of the money, and to see to it the IRS has every tool they can to prosecute to the fullest anybody who would abuse this credit…

I urge all Americans who have always dreamed, if they are a first-time home buyer, of having a home of their own or Americans who have been gridlocked in the failure of our move-up market to actually move up and work, you have a 7-month opportunity that is good for you, it is good for the United States of America, and it is good for this economy.