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California Senate Leadership seeks to punish homeowners and REALTORS® for opposing $75 recording tax

LOS ANGELES (May 23) – This morning the Senate Appropriations Committee approved Senate Bill 30 (R. Calderon), which would extend existing provisions of state law protecting homeowners from having to pay income tax on a "short sale."  SB 30 is sponsored by the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.).
However, in a surprise amendment, SB 30 was linked by the committee to another bill that REALTORS®, as well the county recorders, assessors and title industry, oppose.  That measure, Senate Bill 391 (DeSaulnier), would establish a $75 per document recording tax to fund an affordable housing trust fund.  C.A.R. is opposing SB 391 because it unfairly adds to the cost of recording real estate documents.  The amendment holds SB 30 hostage to the passage of SB 391.
"Families that are forced to make the difficult decision to sell their home as a short sale are already in financial trouble.  And, that financial trouble may be due to a serious illness and/or loss of employment.  They simply can’t afford to pay an additional tax on money they’ve never actually received," stated C.A.R. President Don Faught.  "I'm outraged -- as should the voters of California -- that the Senate leadership would approve linking the fate of SB 30 to that of SB 391, effectively holding California property owners hostage."
Short sales have become an increasingly important alternative to foreclosure for homeowners "underwater" on their mortgage.  Without special protection, federal and state law would view the debt forgiven by a lender in a short sale as income and, as a result, that “income” would be taxed.  In recent years, state and federal law has been amended to keep this “phantom” income from being taxed, but California protections have not been extended.  Consequently, C.A.R. is sponsoring SB 30.
While SB 391 does not apply to sale transactions, the measure applies anytime a home/property owner records a document (e.g., refinancing, transferring into or out of a trust, liens, quit claim deeds, etc.).  C.A.R. is an aggressive advocate for affordable housing, but believes it is bad policy to fund affordable housing at the expense of home/property owners who need to record real estate documents.  The amendment to SB 30 attempts to extort support for the new tax on homeowners in SB 391.

Realtors Help Keep Your Property Taxes Down.

Coalition of Los Angeles REALTOR^® Associations Keeps Transfer Tax Increase Off the Ballot — February 2013
Last spring, when the City of Los Angeles proposed solving its $230 million fiscal year budget deficit by doubling the documentary transfer tax rate to $9 per $1,000 of assessed value, REALTORS® took action – fast. Eleven REALTOR associations covering the Los Angeles metropolitan area put together a coalition – 25,000 REALTORS® in all – to mount a successful campaign against the proposed transfer tax increase. And, by the way, they offered a viable alternative for raising the needed government funds. Using their own resources, along with funding from the California Association and NAR’s Issues Mobilization program, the coalition conducted polls, drafted alternative policy language and distributed effective mailers, which helped to get the transfer tax proposal off the March ballot.

Los Angeles Homes Prices On The Rise

Zillow predicts that home prices in the Los Angeles area are set to rise moderately over the next year. A report released by the website Tuesday found that home prices have risen 2.7% over the last year in the Los Angeles metro area -- which consists of Los Angeles and Orange counties -- to hit $397,000 by the end of the third quarter.
The website called a bottom for the Los Angeles area in the first quarter of 2012 and expects home prices to increase 3.5% throughout the region over the next year, according to its report.   If you have been thinking of owning your own home now is the time to jump off the fence. Interest rates are still low but prices are going up.

Foreclosure and Short Sale Update

                                      Foreclosure Sales

– properties foreclosed on in the past 12 months – accounted for 16.3% of the Los Angeles area resale market last month. Down from 16.6% the month before and 32.8% a year earlier. Last month’s level was the lowest since October 2007 when it was 16.0%. In the current cycle, the foreclosure resales hit a high of 56.7% in February 2009.

                                            Short sales

- transactions where the sale price was less than was owed on the property – made up an estimated 26.0% of Southland resales last month. That was down from 27.6% the month before and up from 25.4% a year earlier.

Prices In Los Angeles Are On The Rise!

Zillow.com predicts that homes prices in  Los Angeles and San Fernando Valley area are on the rise.
Zillow reported that home prices have risen almost 3% in the past year and expects prices to increase 3.5% over the next year.

Freddie Mac says that  interest rates moved  lower this week with lenders offering 30-year fixed-rate home loans 3.39%.

Me thinks NOW might be the time to buy!!!!!