Michael Petruccelli asks; What is a notice of default?

Michael Petruccelli says; A formal written notice to a borrower that a default has occurred and that legal action may be taken.

Michael Petruccelli asks; What is an original principal balance?

Michael Petruccelli says; The total amount of principal owed on a mortgage before any payments are made.

Michael Petruccelli asks; What is an origination fee?

Michael Petruccelli says; On a government loan the loan origination fee is one percent of the loan amount, but additional points may be charged which are called "discount points." One point equals one percent of the loan amount. On a conventional loan, the loan origination fee refers to the total number of points a borrower pays.

Michael Petruccelli asks; Are more states going to provide this information to the IRS?

Michael Petruccelli says; You can expect more states to jump on the band wagon as this program expands.

Michael Petruccelli asks; Where is the IRS searching transfer records to catch these offenders?

Michael Petruccelli says; For starters IRS is checking the transfer records from 15 states: Conn., Fla., Hawaii, Neb., N.H., N.J., N.C., Ohio, PA.,Tenn., Texas, Va., Wash. and Wis. So far, over 500 people have been audited or are under examination, and many more are in the pipe line. IRS is serious about this. When Calif. Board of Equalization refused to voluntarily disclose the data, the Service went to court to force it to comply. Even if gift tax isn't due on a transfer, a return still has to be filed with the IRS if the amount of the gift exceeds the gift tax annual exclusion...currently $13,000.

Michael Petruccelli asks; Is IRS working on a major compliance initiative to sniff out gift tax cheats?

Michael Petruccelli says; It is estimated that between 60% and 90% of taxpayers who transfer real estate for little or no consideration to family members fail to file Form 709 to report the gift.

Michael Petruccelli asks; If you sell your primary home at a substantial gain after 2012 will you trigger the special 3.8% Medicare surtax?

Michael Petruccelli says; Starting in 2013, the new health care law imposes a 3.8% levy on investment income of singles with adjusted gross incomes over $200,000 and marrieds above $250,000. The surtax is levied on the smaller of the filer's net investment incomes or the excess of AGI over the thresholds. Capital gains are treated as investment income. Thus, if you expect the surtax will hit you after 2012 and the gain on the sale of your home will exceed $250,000 if you re single or $500,000 if married, gain over these amounts will bear an extra 3.85 tax. So it may pay handsomely to sell before the end of 2012.

Michael Petruccelli asks; Will the surtax bite harder on the sales of second homes?

Michael Petruccelli says; On the sales of second homes after 2012. The home sale exclusion doesn't apply to them, so the surtax can hit the entire gain.

Michael Petruccelli asks; Despite all the talk, are the chances of a major overhaul slim?

Michael Petruccelli says; Support of the public is crucial, and the commission's idea didn't get such acclaim. Remember that the 1986 tax reform law imposed a $120 billion tax hike on business to fund a similarly sized tax cut fr individuals as the price to get the public's backing. It's hard to imagine business groups swallowing he same deal today. If anything, the current overhaul efforts may result in some tinkering around the tax code's edges.

Michael Petruccelli asks; Is the overlook for the overhaul similar on the individual income tax side?

Michael Petruccelli says: The Obama commission reform proposal illustrates the difficult choices: The current six brackets would be collapsed into three....12%, 22% and 28%. The minimum tax and the phaseouts of itemized deductions and personal exemptions for high incomers would be permanently repealed, too. But the price would be steep: Itemized deductions would be nixed, other than mortgage interest and donations.

Michael Petruccelli asks; We hear a lot of talk about tax reform, is action far off?

Michael Petruccelli says; Although the consensus is that the income tax code is complex and provides large subsidies for activities that lawmakers want to favor, much more ground work needs to be done. The House Ways & Means Com. and the Senate Finance Com. have begun the process holding the first rounds of hearings on tax overhaul. This comes on the heels of a report issued last Dec. by President Obama's commission on tax reform that listed a variety of policy options for lawmakers.

Michael Petruccelli asks; What kind of car fuel economy standards do you see in the near future?

Michael Petruccelli says; A fleet average of 60 miles per gallon by model year 2025, up from 35.5 mpg set to take effect in 2016. Right now, no car sold in the U.S. approaches 60 mpg.

Michael Petruccelli asks; Is the goal of cars achieving a 60 mpg attainable?

Michael Petruccelli says; It is attainable, but it will require a heavy lift by automakers.

Michael Petruccelli asks; Can today's cutting edge efficiency technologies help make this possible?

Michael Petruccelli says; Small engines with direct injection and turbo chargers, lighter chassis and transmissions with more gears, for example,will need to become standard features. New lean-burn engines and small diesels, which sip less fuel than conventional models, will become more widespread as well.

Michael Petruccelli asks; Is the American dream of owning a home dead?

Michael Petruccelli says; No, but it's trickier. Houses are more affordable, due to lower prices and mortgage rates. Median home prices are now a smaller multiple of median incomes in most areas.

Michael Petruccelli asks; What about the Mortgage companies?

Michael Petruccelli says; Lending standards are tighter, often requiring a 20% down payment. And even qualified buyers are wary, not sure when home prices will bottom or whether Congress will trim mortgage interest deductions or kill 30-year loans. So homeownership will keep declining, from a peak of 69% to about 64%.

MIchael Petruccelli asks; What is owner financing?

Michael Petruccelli says; A property purchase transaction in which the property seller provides all or part of the financing.

Michael Petruccelli asks; Are they doing away with the Small Business Admin?

Michael Petruccelli says; It's being debated as part of an Obama administration plan to streamline government. Up first: An examination of federal trade and export programs that span the SBA, the Commerce Dept. and the U.S. Trade and Development Agency, to name a few.

Michael Petruccelli asks; What is one way to accomplish this?

Michael Petruccelli says; Make SBA part of the Commerce Dept. and combine agencies with in Commerce to focus on trade and business issues important to smalls. The administration will get an earful about keeping SBA independent.

Michael Petruccelli asks; What is a partial payment?

Michael Petruccelli says; A payment that is not sufficient to cover the scheduled monthly payment on a mortgage loan. Normally, a lender will not accept a partial payment, but in times of hardship you can make this request of the loan servicing collection department.

Michael Petruccelli asks; Is the IRS giving small business a break?

Michael Petruccelli says; The IRS is giving smalls a break that won't be extended to larger firms. It's exempting businesses that file fewer than 250 W-2s from reporting the value of health coverage on W-2s next year as well as on their 2011 forms... a break that firms of all sizes share. The change will save small businesses some big bucks.

Michael Petruccelli asks; What are online sellers doing to help keep growing?

Michael Petruccelli says; They are adding original content to their websites, figuring that shoppers who spend more time in the virtual store will buy more goods. Ralph Lauren, for example, offers videos of trendsetters who personify the brand.J. Crew posts videos of its photo shoots in exotic locales. And Pottery Barn is among those providing short clips demonstrating decor ideas for its merchandise.

Michael Petruccelli asks; Who are these companies hiring?

Michael Petruccelli says; Web designers and interactive marketing agencies to make online visits as much like trips to the brick-and-motor shops as possible.

Michael Petruccelli asks; Will there will be a boost from trade for the Northeast?

Michael Petruccelli says; Debit crises and sluggish economic growth in Europe mean little benefit from global growth for the area from Boston to Washington, D.C.

Michael Petruccelli asks; How surprising are some of the metro areas at the head of the pack?

Michael Petruccelli says; With job growth of 4% or more this year: Texas oil cities and Midland and Odessa, McAllen, Texas, a hub of U.S.-Mexican trade. Southern ports Brownsville, Texas, and Gulfport, Miss. Aviation, aerospace and defense center Panama City, Fla. And the South's Silicon Valley, Huntsville, Ala. But also Los Cruces, N.M., investing in commercial space flights, and cedar Rapids, Iowa, rebuilding after the 2008 flood.

Michael Petruccelli asks; Will online sales grow more than four times as fast as overall retail in 2011?

Michael Petruccelli says; E-commerce purchases will be up more than 13%, compared with 3% overall. That follows a 12% rise in Internet sales in 2010. Growth will slow over five years, but just a bit. Expect a 10% jump in online purchases for each year in that period.

Michael Petruccelli asks; Is the job growth at last picking up?

Michael Petruccelli says; The 216,000-job increase in employers' March payrolls is good news indeed. It is the second month of gains to exceed the pace of new arrivals to the labor force.

Michael Petruccelli asks; What will be the approximate total by years end?

Michael Petruccelli says; Nearly all states are now out of recession.Only two; Miss. and Nev. are continuing to shrink. Ten others; Hawaii, Mont., Idaho, Utah, N.M., Ariz., Fla., Ga., and the Carolinas are on the bubble, vulnerable to the latest round of home price declines and the meager demand for construction work.

Michael Petruccelli asks; Will there be a global boon in most areas?

Michael Petruccelli says; Increased commercial airplane orders, for example, will bring business to Seattle and to Charleston, S.C., plus Hartford, Conn., and Wichita, Kan. More trade with Asia will help the Pacific Northwest and parts to Calif., and a bump in business with Latin America will do the same for the Gulf Coast and Southeast. Robust commodities demand is good Farm Belt news.

Michael Petruccelli asks; Will considering having a rental apartment in my home be accepted by my neighborhood?

Michael Pertuccelli says; Communities can continue to thrive by drawing on a diverse, vibrant population. This is a way to take neighborhoods and help keep them viable.
Unfortunately, not all communities are as open-minded about rentals. Still, most people today probably live in neighborhoods that do allow them. But the tensions make it more important to add one of these rental units properly.

Michael Petruccelli asks; What is the first step toward creating, converting or building a rental unit in your home?

Michael Petruccelli says; First, make it legal! Installing a rental apartment involves a bit more than punching out a basement door and buying a stove top. One recommendation: Hire a design contractor who can check the city codes and provide a cost estimate for a legal renovation to fit your needs. Using a licensed contractor is the best way to assure that any installations will meet code and receive a certificate of occupancy.

Michael Petruccelli asks; If I build it, will they pay?

Michael Petruccelli says; If income is the only reason for a rental, this is obviously crucial. Check the apartment listings, visit units and see what they are getting for the money. Some areas, such as high-rent cities or college towns, will keep a strong rental market for attached units. Others, such as those with heavy job losses, could experience high vacancy rates. Compare prices to other attached apartments, which tend to be discounted 10% or more below the rent for traditional apartments. Keep in mind, too, that homeowners typically don't raise the rent for good tenants in these types of close living situations.