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What Can a Short Sale Do to Your Credit?

shortsaleeffectcredit

While the real estate market is rebounding from the worst housing crisis to hit the United States since the Great Depression, hitting homeowners the hardest from 2007 to 2009, many people are still struggling to stay afloat financially and pay their mortgages. As unfortunate as it is, short sales continue to account for a larger-than- desired part of the nation’s home sales.

A Short Sale is a Better Option Than a Foreclosure

For homeowners who aren’t able to make their mortgage payments, a short sale can seem like an attractive option. But there are some things to keep in mind if you’re considering to opt for a short sale instead of a foreclosure. While a short sale can have a major impact on your credit rating – even as much as a foreclosure – it only impacts it by a few points in most cases. Before short selling your property, though, you need to carefully assess your specific situation.

What to Consider When Debating Whether to Short Sell Your Property

There are a few considerations you have to take into account before finally deciding to short sell your property. For instance, how many mortgage payments have you already missed? Also, how will your lender report the short sale? If you haven’t missed any mortgage payments and have a good credit history, you might be able to negotiate to have the short sale listed as paid as opposed to settled. In this case, your credit score might not be negatively impacted at all.

If you are considering a short sale, talk to the Law Offices of Stephen K. Hachey. We examine all the details of your case and be with you every step of the way.

Stephen K. Hachey can help you wade through this difficult process to reach a positive solution. Call 866-200-4646 today!

***The opinions in this blog are those of the author whom takes full responsibility for the content. Like all other content on the site, this does not constitute legal advice and is for general information purposes only.***

Florida Tenant Rights Protected Against Landlord Retaliation Explained

Eviction-Notice

According to Florida state law, landlords are prohibited from retaliating against tenants. If you’re a tenant in a rental unit and feel your landlord is retaliating against you, read on to know your rights.

What Rights Protect Tenants From Retaliating Landlords in Florida?

In Florida, it’s illegal for landlords to retaliate against tenants who’ve exercised these legal rights:

  • Notified the landlord about the rental unit’s unsafe or illegal living conditions
  • Notified a government agency about the rental unit’s unsafe or illegal living conditions
  • Joined or organized a tenant union to express your thoughts collectively

What Types of Retaliation Are Against Florida State Law?

Florida law states that landlords cannot take part in any one of the following retaliatory acts:

  • Terminating your lease without appropriate reason
  • Refusing to renew your lease without appropriate reason
  • Filing an eviction lawsuit without appropriate reason
  • Increasing your rent without proper notification and reason
  • Decreasing the services your rent covers, like locking the laundry room, removing cable access, draining the swimming pool or getting rid of the property’s security guards

How Should a Tenant Respond to a Landlord Who Performs a Retaliatory Act?

If you’ve been a victim of your landlord’s retaliatory actions, there are two possible responses:

  • You should stay and fight if the retaliatory act involves a terminated lease or an eviction, proving to a judge in court that either the termination or the eviction was illegal.
  • You should file a lawsuit in small claims court if the retaliatory act involves a rent hike or a reduction in services, asking a judge to prohibit the increase or reinstate the services.

How Can a Tenant Prove That His or Her Landlord Performed a Retaliatory Act?

Landlords are rarely foolish enough to hand you hard evidence proving that they’ve performed a retaliatory act. In fact, many of them will try to cover it up. Here are some common examples:

  • The landlord terminates a lease following a tenant’s legitimate decision to withhold rent
  • The landlord refuses to renegotiate a lease following a tenant’s complaint to an agency
  • The landlord sends a termination notice, alleging that the tenant has misused the facilities

Stephen K. Hachey can help you wade through this difficult process to reach a positive solution. Call 866-200-4646 today!

***The opinions in this blog are those of the author whom takes full responsibility for the content. Like all other content on the site, this does not constitute legal advice and is for general information purposes only.***

What are the Florida Laws Allowing Entry by the Landlord to Rental Property?

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If you live in an apartment, you have just as much of a right to privacy as any homeowner. Here’s a brief look at Florida’s laws concerning when and how your landlord may enter your rental unit.

When Are Landlords Allowed to Enter Your Rental Property?

Although your landlord doesn’t always need an invitation to enter your apartment, all tenants have a right to privacy in their rental units. According to Florida law, a landlord can enter an apartment:

  • If he or she believes there is an emergency, like a fire or a water leak.
  • If he or she needs to inspect the rental unit or perform repairs in it.
  • If he or she has a reason to believe that the rental unit has been abandoned.
  • If he or she needs to show the rental unit to potential new tenants.
  • If he or she has a court order to do so.
How Much Notice Must Landlords Provide Before Entering the Rental Property?

Besides emergencies, your landlord must notify you at least 12 hours in advance before entering your apartment for the aforementioned reasons. Of course, if you agree that your landlord can enter your rental unit earlier than the 12-hour notice, he or she may do so. A landlord must also enter during a suitable timeframe, which Florida law states is between 7:30 A.M. and 8 P.M.

What Rights Do You Have as a Tenant if Your Landlord Violates?

The first thing you should do is discuss your concerns directly with your landlord, following it with a letter politely asking him or her to stop the intrusive behavior. If your landlord continues to violate your right to privacy, you could sue him or her in small claims court for infliction of emotional distress or trespassing.

Stephen K. Hachey can help you wade through this difficult process to reach a positive solution. Call 866-200-4646 today!

***The opinions in this blog are those of the author whom takes full responsibility for the content. Like all other content on the site, this does not constitute legal advice and is for general information purposes only.***

The Effects of Foreclosure on Your Taxes

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In most cases, paying more taxes means that you’re earning more income. Depending on your specific situation – perhaps you’ve received a bonus at work or even won the lottery – that can be a good thing, since you’ll still come out ahead financially even after getting taxed by Uncle Sam.

While paying more taxes after receiving a lump sum of money doesn’t sting too hard, feeling Uncle Sam’s wrath after a foreclosure can seem like you’ve been beheaded by a rusty sword. That said, if you’ve foreclosed on your home, here’s what you should expect on your taxes.

The Internal Revenue Service Equates Cancellation of Debt to Income

According to the IRS, you don’t gain anything financially if someone gives you a sum of money but says that you have to pay it back. Conversely, if the same lender calls you the next day and says never mind, then you’ve just gained that monetary amount. Using that logic, foreclosing on your home is like coming into money, since you aren’t obligated to pay the lender back.

The Mortgage Forgiveness Debt Relief Act of 2007 Helps Homeowners

Fortunately for homeowners dealing with a foreclosure, Congress enacted the MFDRA of 2007 in response to the housing crisis and has extended it numerous times since. The MFDRA lets homeowners exclude the reduction or elimination of debt because of foreclosure or mortgage modification from their incomes. Here are some things to keep in mind if you think you qualify.

  • It only applies to a primary residence
  • The balance on the loan must be $2 million or less
  • The discharge of debt has probably been excluded from your income if you foreclosed on your home while also filing for bankruptcy

Remember, your lender will give you a 1099-C cancellation of debt form that will show the amount of debt that will be forgiven. You must report this amount on your tax return.

Stephen K. Hachey can help you wade through this difficult process to reach a positive solution. Call 866-200-4646 today!

***The opinions in this blog are those of the author whom takes full responsibility for the content. Like all other content on the site, this does not constitute legal advice and is for general information purposes only.***

Tampa FL Foreclosure Rates Still Rank High Nationally

According to a report issued by the real estate data provider RealtyTrac, Tampa Bay’s November foreclosure rate in 2015 was the sixth highest among metropolitan areas across the nation – at a rate of about one in every 512 housing units.

The five metropolitan areas in the country to top Tampa on the list included Atlantic City, N.J., Trenton, N.J., Ocala, Fla., Reading, Penn., and Baltimore. In addition to Ocala, two other cities in Florida made the top 10 – Jacksonville and Daytona Beach.

The report also states that Florida’s foreclosure rate in November – one in every 662 housing units – was the third highest in the nation. What’s more, Florida’s overall foreclosure rate ranked in the top five in the nation every month in 2015.

Stephen K. Hachey, a Florida real estate attorney, can help your wade through this process and determine a positive solution. Contact him at 866-200-4646.

The opinions in this post are solely those of the author. The author takes full responsibility for the content. Like all blog posts, this is offered for general information purposes and does not constitute legal advice.

Mortgage Forgiveness Debt Relief Act Extended to Cover 2015 and 2016

Thanks to a spending bill signed by President Obama on Dec. 18, 2015, the Mortgage Forgiveness Debt Relief Act has been extended to Dec. 31, 2016. The extension will also retroactively cover mortgage debt that homeowners canceled in 2015.

The Mortgage Forgiveness Debt Relief Act helps homeowners avoid paying taxes on home mortgage debt that has been forgiven. In normal circumstances, any mortgage debt that has been forgiven by a lender is considered taxable income.

Initially passed in 2007, the Mortgage Forgiveness Debt Relief Act states that up to $2 million can be forgiven and not taxed if: the house has been the primary place of residence for at least two out of the last five years; or the homeowner has used the debt to add improvements and make upgrades to the home.

Unfortunately for anxious homeowners, this is not the first time that an extension of the MFDRA has come down to the wire and left them holding their breath. In 2014, President Obama didn’t sign an extension until December 29.

The good news is that this year’s extension will not only apply to short sales that took place in 2015 but also the ones that will take place in 2016. Previous extensions of the MFDRA only covered short sales from the preceding year.

There is no doubt this extension is a huge relief to homeowners who have faced financial burdens in the past few years, easing concerns that they might have had to move forward with a short sale.

Stephen K. Hachey, a Florida real estate attorney, can help your wade through this process and determine a positive solution. Contact him at 866-200-4646.

The opinions in this post are solely those of the author. The author takes full responsibility for the content. Like all blog posts, this is offered for general information purposes and does not constitute legal advice.

Does the Hardest Hit Fund Help Floridians?

The housing market crash of 2007 caused millions of American homeowners to face the risk of foreclosure because of declining property values and staggeringly high unemployment rates. In 2010, a year after the worst part the crisis, the Obama administration initiated the ‘Hardest Hit Fund’ in an attempt to help homeowners who were affected the most. Today, 18 states and the District of Columbia are taking part in the program. But not all of the states are benefiting, especially Florida.

Florida Has the Lowest Rate of Approval For HHF Assistance

Unfortunately for Floridian homeowners, the state has the lowest rate of approval for assistance, one of the highest rates for denying it and a general slowness in processing the thousands of applications it receives. Of the 109,775 homeowners who applied for assistance – second only to California – only 22,400 have received it. This equates to a 20 percent rate of approval, the lowest of all the states.

When the Obama administration implemented the ‘Hardest Hit Fund’ program, it estimated that 106,000 Floridian homeowners would receive help from it. With the program scheduled to end in December of 2017 that number has plunged to just 39,000. According to a detailed report, there are several factors contributing to this.

  • Florida’s government officials failed to persuade banks and loan servicing companies to participate in the program, which the treasury relied on.
  • Florida’s government officials cut the number of months unemployed homeowners could receive help from 18 to 6 months, even though 43 percent of unemployed workers were jobless for more than six months.
  • The Treasury Department failed in pressuring the state to act accordingly.

For more information about the Hardest Hit Fund and how it might possibly help you, contact a real estate attorney today.

Stephen K. Hachey, a Florida real estate attorney, can help your wade through this process and determine a positive solution. Contact him at 866-200-4646.

The opinions in this post are solely those of the author. The author takes full responsibility for the content. Like all blog posts, this is offered for general information purposes and does not constitute legal advice.

Does Discharge in Bankruptcy Prevent Borrowers From Defending a Foreclosure?

If your home is in foreclosure and you are thinking about filing for bankruptcy, you are likely wondering if doing so will help you keep your home. The following are a few other questions to consider, as well: Will you still have to make mortgage payments after you file? Will your mortgage lender be able to foreclose on your home after your file?

Although filing for bankruptcy might be a worthwhile option to buy some more time, it likely won’t be a permanent fix to your foreclosure, unless you continue making mortgage payments. Before making a final decision to declare bankruptcy, understand what will happen to your home after filing under Chapter 7 or Chapter 13 .

What You Need to Know About a Bankruptcy Discharge

When you file for bankruptcy, you do so to obtain a discharge or relief from certain debts. With a Chapter 7, this discharge is usually granted once the time for creditors to object the filing has expired. The average time in this case is four months from the filing date. With a Chapter 13, the discharge is granted after a payment plan has been completed. The average time for Chapter 13 is three to five years. But what about liability for a mortgage debt?

Although a bankruptcy discharge of a mortgage debt eliminates your personal liability to it, a mortgage lender can still foreclose on your home if you fail to make mortgage payments. As a result, a mortgage lender can’t hold you responsible for repaying the deficiency–the difference between the unpaid mortgage debt and the foreclosure selling price) following a foreclosure.

In some states, mortgage lenders have the ability to sue homeowners for this difference and receive a deficiency judgment. However, mortgage lenders can’t receive this judgment if your mortgage debt was discharged in bankruptcy court.

Stephen K. Hachey, a Florida real estate attorney, can help your wade through this process and determine a positive solution. Contact him at 866-200-4646.

The opinions in this post are solely those of the author. The author takes full responsibility for the content. Like all blog posts, this is offered for general information purposes and does not constitute legal advice.

The Mortgage Forgiveness Debt Relief Act and Cancellation of Debt

If you owe a debt to someone and he or she forgives it, that amount could be taxable.

The Mortgage Debt Relief Act of 2007 lets taxpayers exclude income from the discharge of debt on their primary residence. Forgiven mortgage debt from a foreclosure and reduced debt through mortgage restriction both qualify for relief.

If your debt was forgiven between 2007 and 2014, up to $2 million of it is eligible for this exclusion. If the discharge of debt is not directly associated with the home’s declining value or the taxpayers financial situation, the exclusion does not apply.

That said, here are a few key points regarding the cancellation of debt.

Cancellation of Debt: What is it?

When you borrow money from a lender, you are not required to include the income from that loan for tax purposes because you are obligated to repay it. But if a lender forgives or cancels that debt, you could be responsible for reporting it. The lender will use a 1099-C form to report the amount of canceled debt to you and the IRS.

Example: If you borrow $20,000 and default on the loan after paying the lender back $5,000 of it, there will be a cancelation debt of $15,000 that could be taxable.

Cancellation of Debt Income: Is it always taxable?

In some circumstances, cancellation of debt income is not taxable. This happens if:

  • The debt is discharged through bankruptcy
  • The debt is canceled when you are insolvent
  • The debt is incurred while you are operating a farm
  • The debt is associated with a non-recourse loan

For more information about where you stand, contact a real estate attorney today.

Stephen K. Hachey, a Florida real estate attorney, can help your wade through this process and determine a positive solution. Contact him at 866-200-4646.

The opinions in this post are solely those of the author. The author takes full responsibility for the content. Like all blog posts, this is offered for general information purposes and does not constitute legal advice.

The US Treasury Department’s ‘Hardest Hit Fund’ Explained

When the housing market crashed in 2007, millions of homeowners faced the risk of foreclosure as a result of declined property values and high unemployment rates. The worst part of the crisis lasted until 2009, and a year later the Obama administration launched the ‘Hardest Hit Fund’ to help those impacted the most.

The housing finance agencies that participate in the program have implemented a number of initiatives that help struggling homeowners recover from the crash. As of today, 18 states and the District of Columbia are taking advantage of the program.

What Kind of Help is Offered Through the ‘Hardest Hit Fund’?

Since each state’s Housing Finance Agency designs and administers its own HHF programs, all of them vary and are specifically tailored to the region they’re meant to help. No matter the variations in the programs by state, the purpose of each is to aid two types of people: unemployed homeowners who hope to remain in their home while searching for work; and homeowners who owe more to their mortgage lender than what their home is worth. The HHF has provided $7.6 billion in relief.

The most common programs associated with the HHF include:

  • Mortgage payment assistance
  • Principal debt reduction
  • Second lien loan elimination
  • Transition assistance

How Long Will the ‘Hardest Hit Fund’ Offer Help to Homeowners?

Each state’s participating Housing Finance Agency has until the end of 2017 to use the funds that were allocated by the government. According to the Department of the Treasury’s second quarter performance summary in 2015, there are 74 active programs helping homeowners across all 19 HFAs, and about $5.1 billion of the allocated funds – or 76 percent of the program cap – have been used for aid.

Stephen K. Hachey, a Florida real estate attorney, can help your wade through this process and determine a positive solution. Contact him at 866-200-4646.

The opinions in this post are solely those of the author. The author takes full responsibility for the content. Like all blog posts, this is offered for general information purposes and does not constitute legal advice.