Just another WordPress site

Written by: Chawonza Nash, February 10, 2012

President Obama announces mortgage settlement

President Obama announced on Thursday that a settlement of $26 billion, agreed upon and signed by his administration, 49 of 50 state attorneys general (excluding Oklahoma), the Justice Department and the U.S. Department of Housing Development from the nation’s banks alleged involvement in foreclosure fraud as win a for struggling Americans homeowners.

This settlement comes on the heels of years-long investigations of banks improperly foreclosing on homes based on robosigning (seizing properties without proper paperwork) and state attorneys general careful apprehension not to sign off on a quick settlement with big banks until accountability measures were in place hindering banks from re-victimizing American taxpayers.

On February 9 CNN Money quoted U.S. Attorney General Eric Holder having said, “We are using this opportunity to fix a broken system.”

The settlement received accolades from members of Mortgage Bankers Association, an industry trade group for lenders and the Center for Responsible Lending, a public advocacy group for borrowers. However, critics on both sides of the settlement spectrum are lining up to spout their disdain or support as the actual implementation and outcome of the settlement.
The settlement for many distressed American homeowners a horizon of relief.

How the settlement will help homeowners:

• Principal Reduction: $17 billion will be earmarked to reduce the principal of homeowners both underwater and behind on their mortgages

• Refinancing: $3 billion will be earmarked for current on mortgages homeowner, but still underwater. Reduction of principal will not be included.

• Robosigning Payments: Approximately $1.5 billion will be given to homeowners who lost their homes due to foreclosures between Jan. 1, 2008 and Dec. 31, 2011, and meet other criteria. They will receive up to $2,000 each.

This settlement does not prevent homeowners from suing the bank to recover damages if they lost their homes due to improper foreclosure.

Banks participating in the settlement include Bank of America, JPMorgan Chase, Citigroup, Wells Fargo and Ally Financial. The Feds are looking to expand the settlement to nine other mortgage servicers which could raise the settlement value to $30 billion. This settlement does not prevent pending or future legal actions from being taken against these banks.

To those critics eager to point out the implications of this settlement, just a reminder that under the previous presidential administration Wall Street walked away with $1.2 Trillion in secret loans of which the aforementioned banks distributed within their coffers. These were monies given to banks in return that they would help boost the economy and assist struggling Americans keep their homes. Yes $26 billion may seem like a drop in the bucket it is however the sweetest one handed clap American homeowners can give the nation’s banks.

Tax refund

Insiders look at tax trends and abuses of the system

Written By: Amy Pritchard

Tax preparers, Enrolled agents, CPAs, and accountants all have something in common. Beyond the obvious, yes they handle our bookkeeping, taxes, accounts, i.e. money; they also have a first-hand look at how some Americans try to work the tax system. It has become a catch phrase, it’s even been glorified by those who feel entitled, but in the end, the people who work to protect the system, are often times the ones who see the abuse and are unable to do anything about it.

In an effort to shed some light on some of the abuses of our system, I asked some Enrolled Agents and CPAs to complete the following statement:

“It pisses me off when…

1) Retired annuitants take jobs from under-employed or unemployed people. Also known as double-dipping, some states are trying to crack down on the practice, which also affects the unemployment job pool. Employers are opting to decrease pay for the retired annuitant in exchange for a more experienced and efficient worker.

2) May/December couples who marry this year and by next tax season the wife (May) is collecting disability and the husband (December) is filing for retirement. General abuses of the disability system are rampant, however, those with significantly older spouses are seeing this as an avenue to pseudo-retire with their much older spouse.

3) Self-employed individuals earning $60,000 per year and expecting to not pay a cent in income taxes. Hiding, lying, covering up, or otherwise being deceitful with the actual annual earnings puts more money in the hands of those earning and less in the government for spending that helps serve and protect such people.

4) Couples who attempt to file single if they get married halfway through the year. If you marry at any point during the year, your tax filing must reflect that marriage. There’s no such thing as a partial single filing. And no, married couples cannot opt to file single for the individual tax break.

5) An individual attempts to claim a brother, sister, etc., since the parent does not work or file taxes. In an effort to claim a dependent for tax credit when the individual does not even support the dependant under the guise that if my parent isn’t going to claim him/her, can’t I get the tax benefit? As if it goes to waste.

6) People think they shouldn’t pay any taxes at all. Many people fail to realize that the roads they drive on, light signals that maintain traffic flow, having the security of knowing the police or fireman will show up when called, are all due to tax dollar contributions.

7) Trying to write-off wedding expenses for a son/daughter as gift expenditure.

Yes, weddings are expensive; however, there aren’t any tax write-offs to help offset the wedding of your child’s dream.

When people expect to not have to pay or assume all of their money will be returned at the end of the year just because they have children. If everyone who had children didn’t pay taxes, how could we fund our schools, roads, emergency personnel, etc.? All of the services a parent expects available to their child, without actually have to pay for them.

9) Tax evasion and tax fraud through the abuse of charities Donors to eligible charities generally will be able to reduce their own federal income taxes (and usually State income taxes as well) by a percentage of the amount of their donation (as much as 40%).

10) International tax avoidance or evasion The federal government loses both individual and corporate income tax revenue from the shifting of profits and income into low-tax countries, often referred to as tax havens.