Top 10 Best Rural Counties to Live

Where’s the best rural place to live?
Progressive Farmer magazine, in partnership with the real estate research firm OnBoard, has compiled a top-10 list of desirable rural counties. The list takes into account several criteria, including home and land prices, crime rates, air quality, education, access to health care, and average household income.

Before making these picks, the magazine’s editors traveled to the top contenders and interviewed the residents and get the lay of the land. Here are their final selections:

• Barren County, Ky.
• Warren County, Pa.
• Randolph County, Ill.
• Gillespie County, Texas
• Union County, S.D.
• St. Lawrence County, N.Y.
• Sac County, Iowa
• Garfield County, Okla.
• Amador County, Calif.
• Polk County, N.C.

Source: Progressive Farmer (October 2007)

Forclosures Drop in September, Still up 99% for Year

Foreclosures were down 8 percent in September compared with August when they hit a 32-month peak. However, foreclosures are still up 99 percent compared to September a year ago.

There were 223,538 foreclosures in September — or one in every 557 households. California, Florida, and Nevada led the nation, according to RealtyTrac, an online market for foreclosure properties. Other states with foreclosure rates ranking among the nation’s 10 highest were Michigan, Arizona, Georgia, Ohio, Colorado, Texas, and Indiana.

In 39 states, foreclosures fell in September. “It’s too early to tell if September’s numbers represent a one-month lull or if they could signify that more buyers and investors are getting back in the market and snatching up discounted foreclosure properties,” says James Saccacio, RealtyTrac’s chief executive officer, in a statement.

Foreclosure rates fell in Texas and Michigan, but both states still reported more than 14,000 foreclosure filings for the month. Georgia reported 11,926 foreclosure filings, down 14 percent from the previous month, but still the sixth highest state total.

Illinois, which was No. 11 in total filings, was the only state to see an increase in foreclosures in September versus August.

Source: Reuters News, Al Yoon, and RealTrac (10/11/07)

Mortgages for Illegal Immigrants Grow in Popularity

While the subprime market has taken a hit in recent months, lenders continue to report success with ITIN mortgages, or home loans given to illegal immigrants who use individual taxpayer identification numbers instead of Social Security numbers.

Lenders say these borrowers are evaluated using different criteria than traditional borrowers — such as whether they have paid taxes for at least two years and made timely utility, rent, and cell phone bill payments. The amount of money sent to relatives in their homeland and their running tabs at local grocery stores also are assessed.

The number of banks writing such loans has expanded since the Hispanic National Mortgage Association began purchasing the loans and bundling them into securities for sale to investors. Banks report a less than 1 percent delinquency rate for ITIN mortgages, but there are concerns that rising borrowing costs and a possible crackdown on illegal workers by the federal government will make it difficult for them to keep up with their monthly payments.

Source: The Wall Street Journal, Miriam Jordan (10/09/07)

House Votes to Eliminate ‘Phantom Tax’

The U.S. House of Representatives voted on Thursday to get rid of a tax burden for home owners who have had a loan forgiven or foreclosed on their home because they were unable to make their mortgage payments. The Mortgage Cancellation Tax Relief Act, H.R. 3648, passed by a vote of 386 to 27. Similar legislation is making its way through the Senate.

Since the early 1990s, NAR has supported such measures to eliminate the “phantom tax” on financially-strapped home owners.

“Congress made a good decision that will affect many Americans who find themselves in a truly bad situation,” says NAR President Pat V. Combs. “Changing the IRS code is an issue of fundamental fairness. It would relieve a tax burden at a time when an individual or family has experienced a true economic loss arising from the sale or loss of their home. These families are already in financial distress and are most likely unable to pay additional taxes.”

The current tax code requires a lender who forgives debt to provide a Form 1099 to the IRS stating the amount the borrower has been forgiven. This disclosure applies whether it is a short sale, foreclosure, deed in lieu of foreclosure or any similar arrangement that relieves the borrower of the obligation to pay some portion of their debt. If the property is sold at foreclosure or is sold for less than was borrowed, that difference is considered income and is subject to the tax.

H.R. 3648 would ensure that any amount forgiven on mortgage debt secured by a principal residence will not be taxed. The legislation has a provision to safeguard against abuses. That provision is similar to one that already exists for commercial real estate owners and would treat commercial and residential property equally.

“This is not only about the subprime turmoil we are currently experiencing,” Combs says. “This is also about families who have lost their home or a need to sell that home for less than the amount owed on their home mortgage because of job loss, divorce, health issues, a decrease in the value of the home or other unfortunate circumstances. Clearly it is unfair to tax people on phantom income when they most likely have no cash with which to pay the tax.”

In other news, another bill has been sent to the House Judiciary Committee that would revise the bankruptcy code to allow judges to order mortgage lenders to ease terms for home owners in bankruptcy proceedings. Currently, mortgage lenders can foreclose against a home owner in default 90 days after the filing of bankruptcy.

— REALTOR® Magazine Online