Why Florida’s Foreclosure Machine Is Slowing Down
The State of Florida has the third highest foreclosure rate in the United States after Nevada and Arizona. Florida’s legislature appropriated $9.6 million this year to hire semi-retired judges and case managers to preside and assist in foreclosure hearings such as those in Tampa. The idea is to avoid “Rocket Docket” type jurisprudence. The goal is to clear 62 percent of the backlog by next July. These facts are per a spokesmen for the Florida Supreme Court which thought it was able to accomplish this goal through the appropriation. However, some banks such as JP Morgan Chase and have slowed down on their foreclosures and evictions, because of this they seem very doubtful that they can clear that amount. Among the alleged defects the banks are examining are lender affidavits signed by people, often described as “robo signers,” who repeatedly failed to verify the accuracy of the information in the documents. Every homeowner that’s in foreclosure now should be questioning the documents and go through thoroughly to make sure there is no fraud going on.
Ray Garcia, Esq.
Board Certified in Real Estate Law
By the Florida Bar
www.raygarcialaw.com
Bank of America Announces “Quicker” Short Sales
In mid-April, Bank of America announced the roll out of a new and more efficient short sale process. Bank of America claims that this new shorter and quicker process will allow for decisions on short sales within twenty (20) days. Although many in the short sale business remain skeptical of whether Bank of America can meet such a timeline considering the prolonged short sale process of six (6) months or more, Bank of America has already made some changes that are immediately noticeable.
Bank of America is still utilizing the Equator system. The Equator system is their real estate software program that allows Realtors and Attorneys to communicate online with Bank of America short sale negotiators. However, Bank of America now requires most of the short sale documents required for them to process a short sale to be submitted upfront upon initiation of the short sale. In the past, the Bank of America negotiator would request certain documents upon initiation and then continuously ask for additional documents through the first two (2) to four (4) weeks. Now, they immediately ask for the Tax Return verification, Purchase Contract, Bank of America Short Sale Addendum as well as the estimated fees to close. These documents must be completed and uploaded to the negotiator prior to Bank of America even considering the short sale. This new change alone should reduce Bank of America’s short sale processing times, but it requires that Realtors and Attorneys gather more documentation upfront.
If you are considering a short sale or would like to know if there are alternatives to short sale, please do not hesitate to call our office at 305-227-4030 for more information.
Ray Garcia, Esq.
www.raygarcialaw.com
Board Certified in Real Estate
Law by the Florida Bar
Tips to Avoid Mortgage Modification Scams
1. Beware of anyone who is not an attorney and offers assistance in modifying your loan
2. Beware of anyone who asks you to pay a fee in return for advice, services or the modification of a delinquent loan.
3. Beware of anyone who carries themself out as a non-profit organization or government entity.
4. Beware of people who pressure you to sign papers immediately or who try to convince you that they can “save” your home if you sign or transfer over the deed to your house.
5. Do not sign over the deed to your property to any organization or individual unless you are working directly with your mortgage company to forgive your debt.
6. Beware of anyone who charges large upfront fees they will run with your money.
7. Never make a mortgage payment to anyone other than your mortgage company without their approval.
If you have any questions or concerns please do not hesitiate to call our office at 305-227-4030 for more information.
Ray Garcia,Esq.
Board Certified in Real Estate Law
by the Florida Bar
www.raygarcialaw.com
The Basics of the Home Affordable Refinance Program (HARP)
There are some very basic requirements that will allow you to determine whether you may be eligible for Home Affordable Refinance Program (HARP) if you meet all of the following criteria:
•The mortgage must be owned or guaranteed by Freddie Mac or Fannie Mae.
•The mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009.
•The mortgage cannot have been refinanced under HARP previously unless it is a Fannie Mae loan that was refinanced under HARP from March-May, 2009.
•The current loan-to-value (LTV) ratio must be greater than 80%.
•The borrower must be current on the mortgage at the time of the refinance, with a good payment history in the past 12 months.
Ray Garcia, Esq.
Board Certified in Real Estate Law
by the Florida Bar
www.raygarcialaw.com
PRINCIPLE REDUCTION ALTERNATIVE UNDER HAMP
If your home is currently worth significantly less than you owe on it, MHA’s Principal Reduction Alternative was designed to help you by encouraging mortgage servicers and investors to reduce the amount you owe on your home.
You may be eligible for Principal Reduction Alternative if:
•Your mortgage is not owned or guaranteed by Fannie Mae or Freddie Mac.
•You owe more than your home is worth.
•You occupy the house as your primary residence.
•You obtained your mortgage on or before January 1, 2009.
•Your mortgage payment is more than 31 percent of your gross (pre-tax) monthly income.
•You owe up to $729,750 on your 1st mortgage.
•You have a financial hardship and are either delinquent or in danger of falling behind.
•You have sufficient, documented income to support the modified payment.
•You must not have been convicted within the last 10 years of felony larceny, theft, fraud or forgery, money laundering or tax evasion, in connection with a mortgage or real estate transaction.*Eligibility criteria are for guidance only. Contact your mortgage servicer to see if you are eligible for PRA.
SECOND LIEN MODIFICATION PROGRAM UNDER HAMP
If your first mortgage was permanently modified under Home Affordable Modification Program and you have a second mortgage on the same property, you may be eligible for a modification or principal reduction on your second mortgage as well, through MHA’s Second Lien Modification Program. Second Lien Modification Program works in tandem with HAMP to provide comprehensive solutions for homeowners with second mortgages to increase long-term affordability and sustainability. If the servicer of your second mortgage is participating, they can evaluate you for a second lien modification.
Florida Short Sales and 1099′s
If a Lender writes off debt in a short sale, it’s a “taxable event,” and the lender tells the IRS about the transaction by submitting a “Form 1099-C, Cancellation of Debt” at the end of the year. Home sellers must acknowledge the amount when they fill out their federal taxes. Through December 31, 2012, however, the federal government forgives any tax liability associated with forgiveness of a mortgage loan of your homestead property.
The IRS generally considers forgiven debt to be income. If a seller has taken out a mortgage in the amount of $300,000 mortgage and the lender accepts $150,000 in satisfaction of the mortgage in a short sale transaction, for example, the seller received the equivalent of $150,000 in free money by government estimates. As a result, the IRS taxes the $150,000 forgiveness. For now and for tax year 2012, however, the government still forgives the debthowever in 2013, it might not.
The tax amount can be significant. On a debt of $150,000, a short-sale seller in the 25 percent tax bracket could end up owing $37,500 in income taxes.
Since short sales can take months and even fall through, homeowners considering a short sale may want to start the process sooner rather than later. Also it is imperative that you contact a Certified Public Accountant in order to ascertain the tax consequences of short sale.
Ray Garcia, Esq.
Board Certified in Real Estate Law
by the Florida Bar
www.rayagrcialaw.com
What to expect at a Florida Foreclosure Mediation
What to expect at a foreclosure case mediation?
The purpose of the mediation at its highest value is a loan modification for the borrower. All banks have different standards that borrowers are supposed to meet, and all banks offer different outcomes. Some are willing to reduce the principal and adjust it to market value (which is a great help for someone with an “upside down” house), others will work and reduce the interest, and some will work to re-distribute the delinquencies on a loan. Florida Mediations are great because they put the banks under a microscope, and it forces them to actually review the loan modification application. It is usually best to mediate the matter early in the case, to try to dispose of the case before extensive discovery is done, or prior to the matter being set for summary judgment or trial. In Miami Dade County, Florida if a property is your homestead, the parties are mandated to mediation. Even if the client fails to comply with the Court’s initial mediation, the parties can still agree to mediate at a later time and with a private mediator, which will usually yield results. Even if the client is not modified at the mediation, the mediation will speed up the loan modification process as again it will start the process, which will need to be finalized at some point during the pendency of the foreclosure action.
Ray Garcia, Esq.
Board Certified in Real Estate Law
by the Florida Bar
www.raygarcialaw.com
Ray Garcia Recognized in 2011 Florida Legal Elite
Attorney Ray Garcia of the was recently recognized in the 2011 edition of Florida Trend’s Florida Legal Elite™. Last fall, lawyers in Florida were asked by Florida Trend to name attorneys they hold in the highest regard or would recommend to others. Ballots were processed, checked and tabulated by a third party resource. The list of top vote-getters was further examined using membership status and practice histories provided by the Florida Bar. A panel of elite attorneys representing different practice areas in cities across the state, reviewed the selection process and the list of finalists. The resulting list represents approximately 2% of the more than 66,000 active Florida Bar members practicing in Florida. “Florida Trend is a leader in providing substantive rankings of exceptional attorneys as determined by peers. The Legal Elite peer review ranking provides highly reliable information on leading lawyers throughout Florida.” notes Florida Bar President, Scott Hawkins.
Benefits of a Deed in Lieu with a Waiver of Deficiency in Florida
As Florida homeowners, we are sometimes placed in situations where we are left in financial distress, questioning if thedecisions we’ve made are for better or for worse. We’ve all faced, or are facing what is known as the famous “fork in the road”. Well, let me tell you something! When it comes to that fork in the road in the world of mortgages, you may not have to wonder which direction to take any longer! If you are a Florida resident in a situation where you can no longer afford to pay your mortgage, consider contacting your lender to negotiate a deed in lieu of foreclosure with a waiver of the deficiency balance as it may be the best and most beneficial way to go. The process of a deed in lieu is when you sign the title of your home back over to the bank and no longer have to make the payments. The loan is then forgiven in response to giving the home back. This only means the benefits of a deed in lieu with a Waiver of Deficiency go a long way. If you can no longer afford to make payments, a deed in lieu with a waiver of deficiency may be your only option. And again, this situation can have its pros and cons. A deed in lieu of foreclosure does not always show on your credit score, giving you the chance to potentially purchase another home in the future! Don’t fall victim of foreclosure! And choose the best road for you, but always consult a Florida attorney before making your decision!
Ray Garcia, Esq.
Board Certified in Real Estate
By the Florida Bar
www.raygarcialaw.com
