Foreclosure Vote Could Rock the Banks

Several major financial institutions (including Bank of America, Citygroup, and Well Fargo) are facing new scrutiny of their handling of the mortgage mess. Shareholders at the banks are likely to vote shortly to investigate mortgage and foreclosure practices.

From Fortune:

The votes will come despite much eye-rolling from the banks, which have tended to be less than forthcoming on the subject. Bank of America and Citi petitioned regulators to keep shareholders from voting on the proposal, which is sponsored by the New York City pension funds led by city comptroller John C. Liu. But the Securities and Exchange Commission ruled this month that the votes must go on.

"An independent examination of bank foreclosure practices is needed to reassure shareholders and protect pensioners and taxpayers," said Liu, a Democrat who has been pushing since last fall for bank boards to wake up and investigate. "Regrettably, the banks have failed us on this and even went so far as to try and kick us off the ballot, but the shareholders have prevailed."

The New York funds say they own $1.7 billion worth of stock in BofA, Citi, Wells and JPMorgan Chase (JPM). Its shareholders won't vote on the New York proposal but will vote on a similar one. Wells initially opposed the New York proposal as similar to one its shareholders were already voting on, but took up the New York measure after the other one was dropped.

More here…

10 Foreclosure Hotspots

Although Las Vegas wins the title for the highest foreclosure rates in the US, CNN Money.com has put together a list of cities with the fastest-growing foreclosure rates in the past year. Check out a snippet of their article below or click here for the full text. Looks like the South is having a hard time…

Spartanburg, S.C.

Population: 287,000

Foreclosure rate: One in 60 homes

Percent increase in 2010: 228%

Spartanburg is found in the upstate portion of South Carolina, the fastest-growing region in the state. But in the last year, it also had the country's fastest-growing foreclosure rate.

The 228% spike in foreclosure filings is the result of two converging trends, according to city manager Ed Memmott: Questionable mortgages used to buy homes -- especially investment homes -- during the boom; and job losses.

Albuquerque, N.M.

Population: 529,000

Foreclosure rate: One in 46 homes

Percent increase in 2010: 60.32%

One of the fastest growing metro areas in the nation, Albuquerque was one of the nation's fastest-growing metro areas over the past decade, drawing the young and retirees alike thanks to a warm climate and plethora of jobs, from tech positions in atomic energy and solar to manufacturing positions at the new Tempur-Pedic mattress plant.

The recession, however, applied the brakes to the area's economy and Albuquerque has been slow to recover. Unemployment is still on the upswing, rising to 8.6% in November from 7.8% a year earlier. Plus, the metro area lost 13% of its construction jobs last year, according to the Associated General Contractors of America.

Read more at CNNMoney.com

Questions for the Tax Lady: October 26th, 2009

Check out the following new Questions for the Tax Lady answers and feel free to ask me questions through one of the links below. You can send me an email, direct message or @ reply, and I will do my best to get an answer for you!

Question #1: Are alimony payments taxable income?

Answer: Yes, alimony payments are subject to an income tax in the year received. You will need to report this income on IRS Form 1040 when you file your return this April. For more information on alimony, child support, court awards, and damages check out this page on IRS.gov.

Question #2: If my husband and I foreclose on our home, and the bank forgives us of the negative equity, will we have to claim that as taxable income?

No, fortunately you will not. Although canceled credit card debt is considered taxable income, this is not the case with mortgage related debt. Your lender should be familiar with this exclusion, but do not freak out if you do get a 1099 Form from them in January. Just file IRS Form 982 with your tax return, and you will not need to claim the canceled mortgage dept as income.