American Home Shield was gracious enough, for the fourth year in a row, to sponsor a legal update with Gov Hutchinson, Assistant General Counsel and Staff Vice President of the CALIFORNIA ASSOCIATION OF REALTORS®.

All staff and agents from PMZ attended to hear about the latest laws and form updates.

Here is some interesting information:

Three year moratorium on Short Sale income tax reporting
The President has signed legislation implementing a law that eases the tax burden for homeowners who have had debt forgiven on a mortgage due to a foreclosure or short sale.

Previously, the tax code required a lender who forgives debt to provide a Form 1099 to the IRS stating the amount the borrower had been forgiven. Then, if the property was sold at foreclosure or was sold for less than what was borrowed, the difference was considered income and subject to be taxed. The new legislation provides a temporary, three-year change to the tax code to eliminate taxes homeowners might face when banks renegotiate the terms of a home loan and forgive a portion of the outstanding mortgage balance. The change in the tax law will cap untaxable forgiven debt at $2 million and apply only to principal residences.

Gov mentioned that similar legislation should pass through California State law.

For more information, view the White House fact sheet: Mortgage Forgiveness Debt Relief Act of 2007.

California’s anti-deficiency law saves short sale sellers
When you short sale a home in California, seller’s may be protected from paying the deficiency of the sale to the bank. California’s Code of Civil Procedure, Section 580(b) in plain English states that the bank cannot seek a deficiency judgment against the borrower if the loan was for purchase money on a residential one-four owner-occupied property. These loans are commonly referred to in the lending industry as “non-recourse” loans. The borrower has to live there—if it is an investment property or vacation home, then 580(b) may not save the borrower.

Full details of California CCP 580(b)

Laws regarding rentals
Immigration status - When screening tenants for rental eligibility, property owners can no longer ask the prospective tenant their immigration status. They will need to focus on other eligibility requirements such as income, employment, etc. More info on California Civil Code § 1940.3

Firearms - Similar to no tolerance procedures for drugs, property owners can evict tenants who own illegal firearms, un-permitted firearms, etc.

DRE Licensing Laws
The DRE can revoke or suspend a real estate license if an agent is convicted of a misdemeanor or felony, but only if it is Real Estate related.

There is a good chance that it will be required next year to include your DRE license number on your business cards, so consider jumping on board the bandwagon early or just ordering seven months worth of business cards if you are close to running out.

Those are just a few interesting facts I picked up today from the meeting. Thanks a lot for coming Gov!

Note: This article is not to be used or construed as tax or legal advice.  Please consult with a tax professional for tax related inquiries or a lawyer for legal counsel.

In today’s staff meeting we covered some very interesting topics. So for those of you who weren’t able to make it or for others who are just interested, here is a recap.

PMZ Home Loans market update:

• Interest rates below 6% are still available including for FHA and VA loans.
• Banks are tightening down restrictions on underwriting new loans. Contact a PMZ Home Loans agent so that they can step you successfully through the process.

Floyd Wickman Training update:
PMZ Real Estate agents are well into their 5th week of the 7 week training program. We heard from several agents that have found great benefit from the program. The program has helped one agent overcome her shyness, allowing her to do some phone prospecting without even breaking a sweat. Another agent learned how to consolidate all his contacts into one location and to contact at least 100 of them a month for referrals.

2008 Year to date transaction stats:

May 29th, 2008 - Mandatory Meeting at the State Theatre
May 29th, 2008, Gov Hutchinson from CAR will be joining us after our regular staff meeting to discuss some issues. The State Theatre is located at 1307 J Street, Modesto, CA.

Proposition 98 and 99
Make sure you are informed regarding these propositions when voting time comes in June. To read California Association of Realtor’s position and more about the propositions, visit their website.