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Subject Author Date
Re-financing, sold to new company, cashing in of points? Personable Tiger 04-20-2008
Posted by Personable Tiger on April 20, 2008, 4:42 pm
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 Client re-financed home in February. The mortgage company immediately
sold the paper to another company. Now, I'm aware that the
conventional answer is that this is not a new mortgage, it's just
selling the paper, BUT . . . advocating for the client, trying to find
a way. They are making the mortgage payments to a new company.

Is the IRS really this clear on this?

-Tiger

========================================= MODERATOR'S COMMENT:
- This is very common. What exactly is the concern? The bank that
wrote the mortgage sents the homeowner an alert regarding the servicing
transfer, and the new servicing company sends a hello letter.

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Posted by Alan on April 20, 2008, 6:40 pm
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 Personable Tiger wrote:
> Client re-financed home in February. The mortgage company immediately
> sold the paper to another company. Now, I'm aware that the
> conventional answer is that this is not a new mortgage, it's just
> selling the paper, BUT . . . advocating for the client, trying to find
> a way. They are making the mortgage payments to a new company.
>
> Is the IRS really this clear on this?
>
> -Tiger
>
> ========================================= MODERATOR'S COMMENT:
> - This is very common. What exactly is the concern? The bank that
> wrote the mortgage sents the homeowner an alert regarding the servicing
> transfer, and the new servicing company sends a hello letter.
>
It is not a new financing by the taxpayer and therefore there is
no "cashing in of points."

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>

Posted by joetaxpayer on April 20, 2008, 11:05 pm
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Alan wrote:
>> ========================================= MODERATOR'S COMMENT:
>> - This is very common. What exactly is the concern? The bank that
>> wrote the mortgage sends the homeowner an alert regarding the servicing
>> transfer, and the new servicing company sends a hello letter.
>>
> It is not a new financing by the taxpayer and therefore there is no
> "cashing in of points."

What does that expression mean?
A new mortgage when buying a home allows one to write off the points. A
refinance must be spread out over the life of the loan. The reassignment
of the servicing is meaningless. It has no impact to the mortgage holder
other than he send his payment to a new address.

He may not take the points at once unless he sells the home or
refinances again.

Joe
www.blog.joetaxpayer.com

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>

Posted by Alan on April 20, 2008, 11:55 pm
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joetaxpayer wrote:
>
>
> Alan wrote:
>>> ========================================= MODERATOR'S COMMENT:
>>> - This is very common. What exactly is the concern? The bank that
>>> wrote the mortgage sends the homeowner an alert regarding the servicing
>>> transfer, and the new servicing company sends a hello letter.
>>>
>> It is not a new financing by the taxpayer and therefore there is no
>> "cashing in of points."
>
> What does that expression mean?
> A new mortgage when buying a home allows one to write off the points. A
> refinance must be spread out over the life of the loan. The reassignment
> of the servicing is meaningless. It has no impact to the mortgage holder
> other than he send his payment to a new address.
>
> He may not take the points at once unless he sells the home or
> refinances again.
>
> Joe
> www.blog.joetaxpayer.com
>
I believe he was alluding to paying points on a mortgage that he
was amortizing and wanted to know if the lender sold the note,
would that be considered a refinancing so he could write off the
points.

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>

Posted by joetaxpayer on April 21, 2008, 8:19 am
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Alan wrote:
>> A new mortgage when buying a home allows one to write off the points.
>> A refinance must be spread out over the life of the loan. The
>> reassignment of the servicing is meaningless. It has no impact to the
>> mortgage holder other than he send his payment to a new address.
>>
>> He may not take the points at once unless he sells the home or
>> refinances again.
>>
>> Joe
>> www.blog.joetaxpayer.com
>>
> I believe he was alluding to paying points on a mortgage that he was
> amortizing and wanted to know if the lender sold the note, would that be
> considered a refinancing so he could write off the points.

Right, that's what I assumed you meant, and answered above. It's 'no'.
The servicing change is more than routine, most mortgages are sold into
the secondary market and/or serviced by a third party.
Joe

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>

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