When you declare bankruptcy in Florida, you know your credit is going to get bruised. It will take you a long time to build that credit back up, and if you are losing a home in your bankruptcy, it will be an even longer time before you can qualify for a mortgage again. In order to mitigate the damage, many homeowners are choosing to do a short sale after their bankruptcies. This is an excellent alternative to foreclosure, especially if your bankruptcy is already discharged.
The benefits are numerous. For starters, you will get more time in your house if you unload it in a short sale rather than a foreclosure. It will take a little more time to negotiate the deal and arrive at the date that you are required to move out. Another benefit is the amount of time before you can get another mortgage. When you sell your house in a short sale, there will be about two years that you have to wait before you can qualify for another mortgage. A foreclosure following a bankruptcy will require a longer waiting period.
If you are trying to decide whether to short sell your home after a bankruptcy, talk to an experienced foreclosure attorney. Stephen K. Hatchey, a Florida short sale attorney, understands foreclosure law in Florida will be able to help you make the best decision for your property and your financial future. To receive a free consultation, contact our offices at 813-549-0096.
With the federal government encouraging loan modification for borrowers who might be upside down on their mortgages or defaulting towards foreclosure, many lenders are caught wondering whether they should foreclose, modify or both. Before the lawsuit settlement between 49 states and the five largest mortgage lenders, banks would routinely pursue foreclosure while at the same time considering loan modifications for their borrowers. This was confusing to people. Consumers who thought they were in the process of a loan modification found they were receiving foreclosure notices, and others who were fighting a foreclosure had no idea that a modification of their loan might be on the table.
In Florida, the rules are different depending on whether a foreclosure has already been filed. If a homeowner is struggling, but a foreclosure has not been filed yet, the bank can offer a loan modification within 120 days of delinquency. If a foreclosure has already been filed, the lender has five days after the official foreclosure filing to invite the homeowner to apply for a loan modification.
While the rules put in place by the mortgage settlement are meant to make the process of foreclosure and loan modifications clearer for consumers as well as lenders, there are particulars and timelines that must be followed. Consider consulting a Florida foreclosure attorney before taking any action. Stephen K. Hatchey, a Florida foreclosure attorney, can guide you piece of mind. To receive a free consultation, contact our offices at 813-549-0096.
When a mortgage lender forecloses on a home and the amount that is owed is more than the value of the home, the lender has the option to pursue a deficiency claim for the outstanding amount. This practice was not terribly common during the years of real estate profits because any time a foreclosure occurred, the lender could count on selling the property for at least the amount of money that was owed. Since property values have plummeted, lenders are finding themselves having to perform more foreclosures, and the properties they are taking back from borrowers are not worth as much as the loans those borrowers have defaulted on. Therefore, deficiency judgments are on the rise.
In Florida, a lender has the right to file a deficiency claim against a borrower up to one year after the date of foreclosure. When the foreclosed property is sold, they have another 5-year window to file a claim. With the value of Florida properties decreasing in recent years, lenders in the state are more likely to sue for deficiency claims against their borrowers. Lenders who are left with second mortgages are especially likely to file claims. The number of deficiency judgments filed by lenders on second mortgages has risen sharply since 2009.
If you’re worried about a deficiency judgment being won against you, talk to an attorney experienced in foreclosure law. Stephen K. Hatchey, a Florida foreclosure attorney, can guide you through the process. To receive a free consultation, contact our offices at 813-549-0096.
A deficiency claim can be made by a mortgage lender against a borrower when there is a foreclosure and the amount owed on the property, including attorney’s fees and court costs, is more than the amount of money that the property is worth. Deficiency claims in Florida were once rare, but with the value of homes deteriorating over the last few years, lenders have been more mindful about making back the money they lose on foreclosures, short sales and deeds in lieu of foreclosure. In order to have any chance at receiving a judgment against borrowers, lenders need to follow the deficiency claim process set forth by Florida law.
A foreclosure does not automatically lead to a deficiency judgment in Florida. A lender will have to file a claim within one year of the foreclosure. There needs to be a motion made that declares the value of the property and the amount of the deficiency. The borrower will have the opportunity to contest the lender’s valuation of the foreclosed property. That will prompt an evidentiary hearing, at which the lender will have to present evidence that the property’s value is what the lender alleges it is.
While Florida statutes give the lender a year after the foreclosure date to file for a deficiency judgment, lenders have up to five years after the foreclosure sale date to initiate a new claim. There are two opportunities for lenders; one year after the foreclosure date and five years after the foreclosure sale date. If you find yourself in the middle of a deficiency claim, consider finding a real estate attorney. Stephen K. Hatchey, a Florida real estate attorney, can guide you through the process. To receive a free consultation, contact our offices at 813-549-0096.
In Florida, landlords need to follow two different paths to eviction, depending on whether the termination of the lease is due to a nonpayment of rent or some other lease violation. When a landlord decides to evict for nonpayment of rent, a 3-day notice is required to the tenants before eviction proceedings can begin. When a tenant is being evicted for a reason other than the nonpayment of rent, a landlord is required to provide a 7-day notice before beginning eviction.
After the notice is served, a landlord can proceed with the lease termination, which often results in an eviction. Once a tenant is served a 7-day-notice, some landlords will allow the tenants to rectify the situation before continuing with the eviction. For example, if a tenant is violating the lease by being excessively loud, the landlord may give him a chance to live quietly and not disrupt his neighbors. If the lease termination proceeds however, the tenant will have 30 days to vacate.
Landlord and tenant law in Florida can often be complicated. Before proceeding with an eviction, review the lease that is in place to make sure the eviction can be enforced, especially if it is for a reason other than the nonpayment of rent. Consider talking to Stephen K. Hatchey, an attorney who is experienced in residential property management law. Contact him at 813-549-0096.
Thanks to the signing of the National Mortgage Settlement in February of 2012, homeowners may owe less on their mortgages than they did previously. This settlement, which came as a result of the robo-signing scandal that showed banks were rushing through the foreclosure process on many homes without bothering to pay attention to the paperwork, has provided over $20 billion in aid to homeowners so far. Homeowners are able to take advantage of this settlement by modifying their mortgages or by avoiding foreclosures with short sales. A short sale is typically better for your credit rating than losing your home to foreclosure. However, both a foreclosure and a short sale will leave you without a home. While the settlement was intended to keep people in their homes, that is not happening as often as it should.
When you try to negotiate with a bank or lender, you can get them to reduce the principal on your first mortgage, or even forgive a second mortgage. If you cannot get a second mortgage forgiven entirely, you might be able to get a reduction on that mortgage as well. The National Mortgage Settlement has required banks such as Bank of America, Wells Fargo and Citigroup to help homeowners dig out of upside down mortgages and avoid foreclosure. If you are not sure whether you would be better served negotiating with your lender or losing your home, talk to an attorney like Stephen K. Hatchey, who specializes in short sales, foreclosures and the mortgage settlement. Contact him at 813-549-0096.
In short, no, but like so much of life, it’s not that simple. The reasons why attaining a loan modification is a bad idea for struggling homeowners are tied into the banks and mortgage companies willingness to work with customers, the potential for fraud and our own psychological tendencies. To explain, let’s examine the definition of a loan modification.
A loan modification is a change in the original terms of the mortgage agreement between the lender and the borrower. When a bank or mortgage company grants a loan modification, they can do any of the following:
• Reduce the interest rate of the loan
• Bring loan current and move delinquent payments to the end of the loan term
• Make monthly payment a percentage of your household earnings
Why loan modifications may not work?
According to bank and mortgage experts, banks are less likely to grant loan modifications because the fees charged and the potential to gain a more reliable mortgage payer makes it more profitable to let houses go into foreclosure.
Loan modification scams have become prevalent in recent years as well. So called “loan modification” companies approach struggling homeowners, promising that they can work with the bank to adjust terms of their loan. While some companies are legitimate, some aren’t. Here are a couple of warning signs:
• The company tells you to make mortgage payments to someone other than the bank or mortgage company.
• You are asked to sign over the deed of your home.
Lastly, 47 percent of delinquent homeowners that received a loan modification have still had their homes fall into foreclosure. If the homeowner has a hardship, such as family illness or employment, changing the terms of their loan won’t necessarily help.
If you are a homeowner faced with a drastic decision in regards to your home, consider all your options, including a short sale. Also, consider finding a real estate attorney. Stephen K. Hatchey, a Florida short sales attorney, can guide you through the process. To receive a free consultation, contact our offices at 813-549-0096.
When you are upside down on an investment, such as your home, it means you owe more than it is worth. Many homeowners in this situation are weighing their options, and often it comes down to taking one of two paths. They can either continue paying on a mortgage that may never allow you to make a return on your investment; or, walk away from the debt entirely, which is called a strategic default.
There are pros and cons to each scenario. If you do go ahead with a strategic default, you won’t have to worry about that giant, unaffordable mortgage hanging over your head. However, you will also suffer a huge decrease in your credit score, and you probably won’t be able to qualify for another mortgage for a while.
Financial expert Suze Orman, who normally argues for strict financial responsibility, offers some sound advice. She says that if you are upside down by only about 10 percent, keep paying on your investment because there is a light at the end of the tunnel. When you are facing a higher loss, contact your mortgage company and try to work out a refinance or a modified loan balance. If they refuse, try to get them to agree to a short sale. If they refuse to consider that option as well, you can go ahead with the strategic default and move on with your life.
Deciding whether to pursue a strategic default versus continuing to pay on an upside down investment is major decision, Stephen K. Hachey, a Florida real estate attorney, can help. Contact our office at 813-549-0096.
Homeowners who are considering a short sale of their homes received a much-needed reprieve last week. As part of the American Taxpayer Relief Act of 2012 (fiscal cliff bill), Congress voted to extend the Mortgage Forgiveness Debt Relief Act until December 31, 2013. This means that debt forgiven under short sales or loan modifications will not be considered taxable income.
Without the extension, homeowners who earned income from a short sale of loan modification, people who are likely struggling to pay their mortgages would have to pay taxes on top of that. While this would create a difficult scenario for the homeowner, it can also be challenging for real estate market. Faced with the possibility of paying taxes on debt discharge income, homeowners may decide to walk away from the property and force banks to foreclose. Real estate experts expect an increase in short sales because of the extension. These short sales are expected to help the real estate market recover from the recent financial collapse.
If you are considering a short sale of your home, urgency is key. The average time for short sale is around three months. Stephen K. Hatchey, a Florida short sales attorney, can guide you through the process. To receive a free consultation of your case, contact our offices at 813-549-0096.
Common sense might tell you that getting rid of your home in a short sale is pointless if you have declared bankruptcy. Once you are officially and legally bankrupt, you will no longer owe any money to the bank on your house. So, why bother with a short sale? When you short sell your home, there are negotiations and paperwork and closings. You probably think you don’t need the hassle.
Actually, there is a point to the short sale, especially if you ever want to buy another home. After you have straightened out your finances, you will probably want to get back into the homeownership game. In order to do that, you will need to qualify for a mortgage through Fannie Mae or Freddie Mac. Both agencies have a two year waiting period after a short sale. This may seem like a lot, but not when you compare it to the waiting period after a foreclosure, or a bankruptcy and a foreclosure. Those waiting periods can be a lot longer; anywhere from three to seven years.
If you have extenuating circumstances, you might be able to apply for an even shorter waiting period after a short sale. You may have a dramatic loss of income, a catastrophic financial event or something out of the ordinary that required you to declare bankruptcy and short sell your house. When you have the opportunity, do a short sale even when you are declaring bankruptcy.
While short sales can be complicated, help is available. Stephen K. Hachey, a Florida short sale attorney, can help you navigate this process and make the most of a difficult situation. Contact him at 813-549-0096.