SHORT SALE AND LOAN MODIFICATION ARTICLES - TABLE OF CONTENTS
Hi folks, I get asked legal questions every day about Short Sales, deficiency judgments, promissory notes and foreclosures. Folks, I am NOT an Attorney and I CANNOT give you legal advice. I can however direct you to this great resource from my friend Richard Zaretsky. Richard IS an Attorney and CAN give legal advice. Read these articles then give him a call.
Richard and I can work together to help you avoid a foreclosure.
Short Sale Loan Modification and Foreclosure Blog Articles
A Periodic Listing of Articles by Richard P. Zaretsky, Esq.
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Be sure to contact your own attorney for your state laws, and always consult your own attorney on any legal decision you need to make. This article is for information purposes and is not specific advice to any one reader.
Richard Zaretsky, Esq., RICHARD P. ZARETSKY P.A. ATTORNEYS AT LAW, 1655 PALM BEACH LAKES BLVD, SUITE 900, WEST PALM BEACH, FLORIDA 33401, PHONE 561 689 6660 RPZ99@Florida-Counsel.com - FLORIDA BAR BOARD CERTIFIED IN REAL ESTATE LAW - We assist Brokers and Sellers with Short Sales and Modifications and Consult with Brokers and Sellers Nationwide! Shortsales@Florida-Counsel.com New Website http://www.florida-counsel.com/
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IRS LIENS ON SHORT SALE PROPERTY - RESOLVING PHANTOM VALUE CLAIMS
One of the weirder roadblocks we have been seeing is the clearing of IRS liens against a taxpayer (property seller) when the taxpayer is trying to short sell a property. Typically if an IRS lien is on a property the attorney or accountant will present to the IRS a waiver of lien request with requisite proposed settlement statement, recent appraisal of the property, and reason for the lien waiver request. But the IRS started interpreting a rule that caused the IRS to demand the monies that were to pay the transfer (in Florida the "documentary stamps") tax to instead be paid to the IRS because it was a "value" upon which the IRS had a superior lien.
Congress heard this week about the dual track "Foreclosure Express vs. Little Engine that Could" scenario that lenders use to simultaneously foreclose on a home and attempt modification - all at the same time. This causes huge confusion issues with the borrower with often the end result of a foreclosure where one was not necessary - or could have been avoided if the borrower was not mis-lead. I wrote about this dual track system here on ActiveRain at WHY IS THE BANK FORECLOSING IF I AM DOING A SHORT SALE (OR LOAN MODIFICATION)?
ITS NOT THE JUDGE'S JOB TO BE THE DEFENDANT'S ATTORNEY
"If the defendant doesn't hire counsel or doesn't defend themselves then it's not the judge's job to be the defendant's attorney". This quote from an editorial in the Palm Beach Post on November 30, 2010 says volumes to those in the foreclosure process without an attorney. Read it carefully as it says volumes more than the 21 words it contains.
FORECLOSURE PROCESS FINISHED IN 100 DAYS?
Recently several borrowers have stated to me that the foreclosure process in Florida is going to take two years. The long foreclosure process was caused by a combination of overloaded plaintiff attorneys, overloaded lenders, and overwhelmed court system. Although that statement (as unfortunate as it is for the foreclosing banks) was pretty accurate at one time, today is a different story.
SAVE A LIFE AND YOU SAVE THE WORLD - DO OUR CLIENTS NEED US TO AVOID DISPARE?
Today in my local Florida newspaper, I read in horror that two deaths related to foreclosure occurred this week. One homeowner shot himself and the other apparently was asphyxiated by running his car in the garage. In the latter case the former homeowner was found by the successful purchaser after the foreclosure sale.
TITLE AGENT AND MORTGAGE BROKERS CAUGHT IN LOAN FRAUD = 30 YEARS
In a mortgage / sale scheme that was not unfamiliar during the hot Florida real estate market to many real estate professionals, a local title agency and mortgage brokers are being prosecuted Federally for lender fraud / mortgage fraud.
BANK OF AMERICA SHORT SALE APPROVAL LETTER CHANGES
You may have been reading about Bank of America short sale approval letters and some changes that have occurred. The Bank of America Short Sale Approval Letter has had various versions dealing with deficiency of the promissory note. This article will look at the BoA short sale letter recent changes.
NO DEPOSIT CONTRACT - IS IT A CONTRACT?
Do brokers encourage buyers to make "no deposit contracts"? Why are they so pervasive? Are they legally binding?
DIVORCE, SHORT SALES, LOAN MODIFICATION, DEED IN LIEU AND FORECLOSURE - PLANNING AND SOLUTIONS
Although we are years into a dramatic period of real estate deflation, divorce lawyers and judges have not been able to move from traditional solutions to new solutions that work in this recessionary economic environment. The traditional ways of dealing with real estate in a divorce setting has changed. Existing divorcees and those in the planning stages all are potentially affected. Existing handling of divorces usually cause havoc with attempts for Short Sale, Loan Modification or Deed in Lieu solutions.
TITLE INSURANCE STOPPED ON REO AND FORECLOSURE SALES
Most of you have been reading about "phony documents" or "fraudulent documents" from lenders in the foreclosure process. Those documents are the affidavits used to obtain a judgment from a court so a foreclosure sale can occur.
GMAC SUSPENDS FORECLOSURE OPERATIONS - JUDGMENTS MAY BE VOIDABLE
The Palm Beach Post reported today that GMAC has suspended all pending foreclosures nationwide because of a practice uncovered in Florida that could lead to VOIDABLE foreclosure judgments - thus creating havoc with foreclosure sales and REO sales.
WHY IS THE BANK FORECLOSING IF I AM DOING A SHORT SALE (OR LOAN MODIFICATION)?
Why does the bank file and aggressively continue a foreclosure suit even though you are negotiating a short sale or modification of the loan? This is a most often asked question and although I have visited the question before; the concept of the lender dealing separately with the left hand than with the right hand needs to be addressed again.
COLLECTION OF DELINQUENT ASSESSMENTS THRU RENT - POWERFUL TOOL FOR FLORIDA ASSOCIATIONS
Will collecting rents from tenants of delinquent owners help cash strapped associations? Florida enacted Florida Statutes 718.116(11) for condominium associations and 720.3085(8) for homeowner and property associations (and property associations) and 719.108(10) for cooperative associations effective July 1, 2010. These laws are essentially identical and allow an Association to directly collect rents from Tenants occupying the home and if the Tenant fails to pay the Association, to evict the Tenant as if the Association were the landlord.
The Man Who Really Knows Short Sales...
This is not my article but it is about me, was unsolicited, and I am slightly embarrassed and very humbled by it.
DEED IN LIEU - PRESERVATION COMPANY FRAUDULENT BILLS - WATCH OUT!
I just can't get a day of rest! One of my clients had a rotten experieince this week with a home inspector. REDC, the California company that does default solutions and auctions for lenders, has gotten a nice niche for doing home inspections for lenders just prior to the lender accepting and filing a deed in lieu of foreclosure. They hire local inspectors and contractors to review the interior and exterior of the home and make necessary remedial actions if necessary. The problem is that some of these inspectors are criminally fraudulent - and they are not only ripping off the distressed homeowner, but the banks too.
Foreclosure Deficiency Judgment Compared to Deed In Lieu and Short Sale Scenarios
We get so many questions about what is a DEFICIENCY JUDGMENT and how it differs from other possibilities including DEED IN LIEU OF FORECLOSURE or SHORT SALE. Recent blogs and Broker Bryant provided a request that I write a detailed article explaining and differentiating these three items.
BUY AND BAIL - DISTRESSED HOMEOWNER FEELS REALTORS ARE TO BLAME
Calling all Realtors - What follows is a segment of a blog response to a discussion on the concept of "buy and bail". The words below were written by an unnamed person who is obviously an underwater owner. It is important to know that to many, Realtors and Bankers are the cause of everyone's financial distress.
BANKS BEGIN TO GO AFTER DEFICIENCY JUDGMENTS - FANNIE MAE POINTS THE WAY
Earlier this week I wrote about lenders taking the next step after a foreclosure. Foreclosures happen from borrowers that "walk away" from their upside down valued properties, whether because of job loss, other expenses more important than the mortgage payment, or just a strategic default. You can find the other article at MOTION FOR DEFICIENCY JUDGMENT - FORECLOSURE CONSEQUENCES.
MOTION FOR DEFICIENCY JUDGMENT - FORECLOSURE CONSEQUENCES
Today I received a call from one of my blog readers asking me for help with a pleading he received months ago, that is now being scheduled for a hearing in August. This is a prime example of why Stategic Defaults or just walking away from a property can be so dangerous. The pleading is a Motion for Deficiency Judgment from a foreclosure judgment and sale that occurred but was (like most other foreclosure sales) acquired by the lender for a nominal bid. I and many others have been writing about this forgotten liability of borrowers.
Strategic Defaults UP - Loan Modifications Down
C-Span is a wonderful thing. Just listen or watch - The House Oversight and Government Reform Committee hearings going on tonight brought in some interesting statements from CEO's and Presidents of Bank of America, JP Morgan/Chase and others. As I reported in my article WALK AWAY FROM THE PROPERTY - STRATEGIC MORTGAGE DEFAULTS GROW TO 26%, that figure is now updated by the University of Chicago and Northwestern University researchers for the previous figures - a year later the strategic default rate is up another 10%!
IS SHORT SALE FLIPPING CRIMINAL ACTIVITY?
Short sale flipping is again a hot topic because Sergio Natera and Anna McElaney, two Connecticut real estate brokers, are scheduled to be sentenced in Hartford's federal court in August after pleading guilty to fraud. Their crime involved persuading lenders to approve short sales of homes -- without disclosing that there were better offers -- and then flipping the houses for a profit.
NEW FLORIDA FORECLOSURE DEFENSE RULE FROM FLORIDA SUPREME COURT
A new method to dismiss a Foreclosure Complaint in Florida that is just catching is to apply an amended rule put into effect by the Florida Supreme Court on February 11, 2010. This can be an important tool to delay the foreclosure and get that short sale done and the "window of opportunity" is right now.
FORECLOSURE EXPRESS VS. LITTLE ENGINE THAT COULD
I recently saw a blog where the statement was made that, "Most banks will not stop the foreclosure process and start the short sale process until you have an offer on your home." Our experience is that this is inaccurate advice - let me explain.
SHORT SALE PRIMER - LAWYER DISCUSSION OF THE SHORT SALE EVOLUTION
Short Sale Primer For Brokers, Sellers and BuyersSince I wrote the Short Sale Primer (2009) and Back To Basics (2008) articles, the short sale methodology used by lenders has morphed several times and most recently even the United States Government has gotten involved by creating "Regulations" through the Home Affordable Foreclosure Alternatives (HAFA) Program. The passage of time requires that the original article and its revision, which was very popular (thank you!), be extensively updated to reflect new policies by the lenders and realities in the marketplace. I have also updated or added several pertinent links to more detailed discussions on the various subjects in this article. (The end result is that this article is even longer than the previous one. Think about changing its read companion from a cup of coffee to a double espresso).
Bank of America's Webinar on Short Sales
Bank of America recently held a webinar with Matt Vernon (REO and Short Sale Executive) along with some associates, on the present and future short sale programs being implemented by Bank Of America
FLORIDA SUPREME COURT ADDRESSES FORECLOSURE SALE CANCELLATIONS
The Florida Supreme Court last week published its decision bringing to task lenders that - at the last minute - cancel foreclosure sales. The court had been petitioned primarily by condominium associations, homeowner associations and property owner associations for something to prevent lenders from dragging on foreclosure proceedings in an effort to delay payment of association fees and assessments. The practice has also seen some press as - reverse foreclosures - where the association pushed the court to force the lender to stop dragging its feet and get a foreclosure judgment and sale date.
EQUATOR SYSTEM - ARE BORROWERS THAT COMPUTER LITERATE?
The "Equator System" is now in use by Bank of America and GMAC. Touted as a simplistic system to get short sales moving though the lender's system, is it really just an automation method that removes the human decision making element and makes our clients just a jumble of numbers? Also, how many of your clients are trainable to learn the computer system so they can enter pages of data and create Adobe PDF files of their financial backup material and then upload it to the Equator System?
CHINESE DRYWALL - CANCER CLUSTER - UNEXPLODED ORDINANCE - WHEN THERE IS NO BUYER AT ANY PRICE
What happens when there is no buyer for your property at ANY price because a literal buyer disaster has occurred in your neighborhood? In the past 2 years, mortgage crisis and real estate value meltdown notwithstanding, three events keep showing up in my Florida office
SHORT SALE MARKET EVOLUTION - GMAC SOLUTION TO FALSE BUYERS
KUDOS to GMAC mortgage. Their new criteria for short sale consideration is that all contracts with buyers must have a clause that requires the deposit on buyer default to go to GMAC.
AGENT PAYS FOR ATTORNEY - THE CONTINGENT SHORT SALE ATTORNEY FEE AND CONFLICT OF INTEREST
The beginning of this year brought to mind the recurring problem of attorneys that are hired by the real estate agent to represent the seller. Unfortunately, too often the advice the attorney gives to the "client" is designed to make the deal happen - at dire cost to the client seller. Realtors, attorneys and sellers should be aware of the "greed side" of our human nature and guard against being put into these unfortunate situations.
YOU LOST YOUR HOUSE - BUT YOU STILL HAVE TO PAY - CNN MONEY AND ACTIVERAIN
Last night I went to my first (and our area's first) ActiveRain member meeting. For almost no publicity we had 35 brave souls venture out in the rain to meet mostly complete strangers - and we had a wonderful time seeing fellow bloggers. ActiveRain has been a boon to my business and recognition - for example, without ActiveRain the following article would never have included my interview with CNN-Money last week (Thank you Les Christie!) ---
SHORT SALE APPROVAL LETTER MISREPRESENTATIONS - PROMISSORY NOTE RELEASED?
My law practice entails a significant number of clients that come from other "short sale experts" - both attorneys, title companies and experts come lately. Sometimes (ok, many times) the client has arrived because of a troubling experience. Here is an example caused by misrepresentation that does not sit well with the client.
WHEN A BUYER BROKER CHANGES THE MLS LISTING PRICE - A FLIP SCENARIO CAUGHT
This week a real estate broker came in to retain me on a complaint filed by a buyer on a flip and it is important enough to understand why the Department of Professional Regulation is going to prosecute this broker.
SHORT SALE LENDER CANNOT REDUCE COMMISSION TO BROKER
One of the great drawbacks to a broker taking on a short sale listing is the fear and often the reality that the short sale lender will demand a reduction in the broker commissions. This has created all sorts of contraptions to make the broker whole.
MORTGAGE FRAUD and SELLER FRAUD = WE PAY THE BILL
Does anyone in Versailles have any decency? Two years ago a potential client working as a mailroom clerk for 35 years - came into my office regarding a mortgage modification. He and his wife each made $35,000 annually and he purchased a new Versailles Wellington Florida home costing $1,400,000 for his family and in-laws to live in. He already had a home in Miami with a $170,000 mortgage that he wanted to keep. The 100% financing mortgage was a 1.4% pay-rate negative amortization and had no escrows.
DISTRESSED HOMEOWNERS DEFRAUDED BY ATTORNEYS - EXPOSED IN CALIFORNIA
I have previously written about how attorneys can be great and how they can be bad in the field of helping distressed homeowners. Now the California Bar Association has published the preliminary results of an investigation into those attorneys supposedly offering services to help distressed homeowners in one of the hardest hit states
TENANT PROTECTION LAW AND FORECLOSURE PROBLEMS
In March I wrote about the problems tenants faced when the landlord was in foreclosure. See TENANT RIGHTS AND FORECLOSURE - A DISCUSSION OF SAFEGUARDS. Some, but not all, issues have been addressed in new legislation that went into effect May 20, 2009 called the Protecting Tenants at Foreclosure Act of 2009. There is still the advance rent and security deposit issue as the ACT does not address how the tenant can protect itself from the loss of those monies.
Foreclosure is NOT a Remedy - 2nd in a Series
In the preceding blog article I addressed the issues when a borrower waits until they get before a judge to determine that they may want an attorney to represent them. Foreclosure is NOT a Remedy deals with the issues when a borrower has been served with a foreclosure complaint (sometimes mistakenly called a "lis pendens") and more than the time allowed for a response to be filed with the court has come and gone, and no attorney is involved on the borrower's behalf to pursue any available defenses to the foreclosure proceeding. But don't lose sight of the caveat that the borrower should always be looking for alternatives to foreclosure.
Foreclosure? When is the Best Time to See an Attorney?
First in a series:My law practice encompasses assisting and guiding many borrowers that are in financial distress and we take the position that Foreclosure is NOT a Solution. Most borrowers come into the office for guidance and if they are lucky, planning for solution options once they realize that financial distress is a likely scenario. However there is a significant trend this third quarter of the year where we are seeing many more people coming to us with foreclosure suits that were filed many months ago, and now it may be too late to discuss all of the solutions that may have been available to the borrower had they come into the office for a consultation before or at least at the beginning of the process.
LOAN AUDITS - FORECLOSURE DEFENSE FALLACY?
The concepts of foreclosure defense preparation have started a cottage industry, unregulated as with most of the home saving concepts, called "loan audits".
WALK AWAY FROM THE PROPERTY - STRATEGIC MORTGAGE DEFAULTS GROW TO 26%
A mortgaged homeowner is likely to "walk from the property" or "give it back to the bank" based more on loss of equity than the ability to make the mortgage payments, a recent research paper emanating from the University of Chicago says. The paper researches and analyzes when American homeowners are likely to "walk away from their mortgages" These actions by mortgaged homeowners when the indebtedness substantially exceeds the equity value of the property, is called a "strategic default". The study found that 26% of all homeowner defaults today are strategic defaults.
This seems to be THE NUMBER ONE question I get. Unfortunately there are several answers and which is correct for you depends on the Circumstances. I will address the common scenarios in this article.
Your Property is Underwater - What is the solution?
The Distressed Property Owner's "Goal" is an interesting situation for each individual and for each individual experiencing this event, it is different. I like to help my client visualize creating a solution or "goal" by telling a visualization story.
SHORT SALE FLIPS - TITLE INSURANCE PROHIBITED
The short sale flip apparently is alive and well for some investors - and it is causing havoc with title insurance underwriters. Now the title insurance underwriters are making their case simply by declaring that they won't insure such transactions.
BUYING A FORECLOSURE - DUE DILIGENCE AND STATUS OF TITLE
More and more I have been receiving telephone calls and emails wanting me to discuss issues relating to buyer foreclosures and short sales and REO properties. Everyone (both qualified but usually unqualified) seems is writing or buying books on the process, so I figured it may be time to put in my two cents and talk about title issues and due diligence
MOTION FOR SUMMARY JUDGMENT OF FORECLOSURE - DEFEATED! AND HOW I DID IT
Today I used a new technical defense to successfully defeat a motion for summary judgment for foreclosure and I wanted to pass it on to other attorneys (or those who know attorneys) helping homeowners in foreclosure.
SHORT SALE BUYER CANCELLED CONTRACT EPIDEMIC - DIAGNOSIS AND CURE
This past week my office had 5 short sale buyer's walk from their contracts! Although I use an exclamation mark, it is not an unusual occurrence. In fact it seems that it takes 4 contact buyers to make a short sale finally happen. If that was an average for a traditional sale situation, Realtors and title agencies would be climbing the walls.
MORTGAGE FORECLOSURE RESCUE - THE BAD GUYS DON'T WEAR BLACK!
In last week's New York Times an article focuses on how Home Savers Consulting is accused of committing fraud and profited handsomely at the expense of the former homeowner. Worse, the former homeowner thought she still owned the home - she did not.
FORECLOSURE RESCUE AND MORTGAGE MODIFICATION FRAUD - ALERT ISSUED
This week the Florida Bar made public the outlandish and misleading representations that have recently plagued the mortgage modification industry in this state and probably nationwide. The mortgage modification industry has sprung up faster than mushrooms - mostly through mortgage brokers that have seen their ability to make loans dry up in this recession and are applying net office sales techniques to the mortgage modification boom. The problem is that many states have enacted new laws to put them out of business.
SHORT SALES PRIMER - BACK TO BASICS UPDATED
Short Sale Primer For Brokers, Sellers and Buyers - A Primer -
Since I wrote the Short Sale Primer the short sale methodology used by lenders has morphed several times. It is a different animal than it was almost 10 months ago. The passage of time requires that the original article, which was very popular (thank you) be revised to reflect new policies by the lenders. I have also added several pertinent links to more detailed discussions on the various subjects in this article.
SHORT SALE AND FIRPTA TAX WITHHOLDING - IRS ISSUES PRIVATE GUIDANCE
Back around Christmas, 2008 I co-authored a blog with Miami tax attorney Shawn Wolf, Esq. on the issue of a FIRPTA transaction coupled with a short sale. The analysis showed that there were no specific IRS regulations and no rulings regarding a short sale transaction that was subject to FIRPTA. See FIRPTA and SHORT SALES - DANGEROUS LIABILITY TO BUYER AND CLOSING AGENT.
Last month a communication came through from the IRS that confirmed the conclusion made in that article. I am providing to you the question that was posed to the IRS and the answer received from the IRS for those of you that meet this type of situation
TENANT RIGHTS AND FORECLOSURE - A DISCUSSION OF SAFEGUARDS
The unintended victims of the foreclosure process are often the occupant of the home that is a tenant. The landlord is a borrower under a mortgage that has gone into default and is now being foreclosed. What is going to happen to the tenant as a result of the foreclosure? How can a tenant or future tenant be protected from the ill effects of a foreclosure? This article will attempt to address these issues.
MORTGAGE MODIFICATIONS TEND TO FAIL
Here is an interesting article from the Washington Post that describes the difficultiy many homeowners have with modified mortgages.
LENDER SHORT SALE ACCEPTANCE LETTER EXAMPLES - READ WITH CAUTION!
What is a short sale? When giving lectures I like to use the definition as follows: The sale of a real estate property for a price that is less than the total amount necessary to fully satisfy the actual present encumbrance (mortgage) indebtedness on the real estate property. Often I see a different description, one that says, The sale of real estate when the lender accepts less than its mortgage amount and forgives borrower from paying the deficiency.
MULTIPLE SHORT SALE CONTRACTS AND HOW TO AVOID THEM
Why does it take 3.8 contracts to sell a short sale property? Why do Realtors insist on spinning their wheels and getting nowhere selling short sale properties?
FORECLOSURE DEFICIENCY JUDGMENT or SHORT SALE PROMISSORY NOTE or BANKRUPTCY - REVISITED
Whether to agree to a negotiated promissory note in a short sale or allow the house to go to foreclosure is one of the most discussed topics around. It deserves a simple comparison
FLORIDA REAL ESTATE MARKET CONDITIONS RELEASED TODAY
Today one of the state's largest title insurance underwriters release its 2009 Real Estate Forecast and Southeast Florida focus. To those of us that live here it is no surprise that the numbers are grim. To those outside of Florida the numbers are shocking! The report, issued by Attorneys Title Insurance Fund, makes several projections and findings.
FIRPTA and SHORT SALES - DANGEROUS LIABILITY TO BUYER AND CLOSING AGENT
It is critical for Realtors, Buyers, Closing Agents and Lenders to understand the important issues of the short sale when applied to the Internal Revenue Code's Foreign Investment in Real Property Tax Act of 1980 or FIRPTA transaction because disregard for following the FIRPTA rules will make the Buyer and Closing Agent and possibly the Lender liable to the IRS for the Seller's Tax Liability!!!!! The problem is that right now there is NO RULE by the Internal Revenue Service ("IRS") for FIRPTA Short Sales.
Hope For Homeowners Act a Failure
I have many desperate homeowners coming to my office begging for ways to save their homes. Often times the homeowners qualify under the published criteria for the hyped Hope For Homeowners program also called H4H by the FHA. The program, passed by Congress in July 2008 was to save the homes of 400,000 homeowners. So far only 300 or so have applied! Why?
A LAWYER'S EXPLANATION OF THE FORECLOSURE PROCESS
As an attorney I often consult with homeowners that are in distress along with the Realtors that represent them in trying to accomplish a short sale. Often a detailed explanation of the foreclosure process would be very worth while for my client to have a thorough understanding of what they may be facing as the lender seeks to enforce the promissory note and mortgage. We usually don't have enough time to explain the process in full, so here is an article that should help non-lawyers understand what is happening according to rules of procedure in the court system and what options lenders have for enforcing the money they loaned to the homeowner.
IS THE FORECLOSURE FINAL? - AND HOW DOES IT AFFECT MARKETING A SHORT SALE?
As an attorney involved in the procedure of foreclosures and short sales I have been asked this question an increasing number of times - which tells me the legal process is confusing when it comes to the full run of the foreclosure process. So this article will set it out from way in the beginning to the very end and hopefully it will answer your question.
WHAT'S WRONG WITH THE FAR SHORT SALE LISTING AND CONTRACT ADDENDA - AND HOW YOU CAN FIX IT
The Florida Association of Realtors took the lead in making some semblance of consistency, order, and standardized forms for use by Realtors for Short Sale transactions. I doubt many Sellers or brokers realize the draconian conditions of the documents they are using. If you are among them, this article may open your eyes. Because the evolution of Short Sales in 2007 and 2008 has been so dramatic, the forms became problematic at the outset.
If you are a listing Realtor or a person who has just gotten foreclosure notice from your lender(s), no doubt you have heard about a myriad of "Foreclosure Defense" firms that promise to delay or prevent foreclosure or even prevent the enforcement of the mortgage because if irregularities in the loan. What in fact are foreclosure defenses?
SHORT SALE DEFICIENCY DEMANDS AND DEFENSES - The Interstate Highway Analogy
"What chance is there that the bank is going to make me pay the difference (or deficiency) when we are through?" This is the most often asked question I get as an attorney that specializes in residential mortgage loan workouts and (avoiding foreclosure through short sales or modification). If you need basic information to understand the short sale and deficiency issue, see Back to Basics - a Review on Short Sales.
It is only 3 weeks since the new bailout programs "started" but don't ask for any testimonials from any homeowner whose home has been saved.
BANK REJECTS SHORT SALE OPPORTUNITY AND MAKES BIGGER LOSS
Here is more proof that the loss mitigators used by some banks just don't quite "get it". In an article this morning in the Palm Beach Post, by staff writer Eve Samples, Wells Fargo is targeted for its botched handling of a short sale opportunity, resulting in a loss to the bank of at least $40,000 more than it would have experienced in the short sale opportunity.
BAILOUT MISREPRESENTATIONS AND MISCONCEPTIONS
The government bail out of the housing crisis has created wonderfully conceived programs to keep homeowners in their homes with re-negotiated mortgages or refinanced mortgages. The specific programs for the home saving legislation are the HOPE for Homeowners (H4H) and FHASecure programs.
Sometimes you get a frank speaking knowledgable person that sums up the day's thought succintly and in one sentence. Speaking on the Financial Crisis, legenday investor Jim Rogers, in an interview reported on CNBC this morning said the irresponsible people need to go bankrupt if necessary. Here is the quote - you'll love it since it is So True!
The stock market is at equivalent lows to times dating back to the Great Depression (which for those of you needed date measurements is almost 75 years ago).
TOP TEN LIST OF SHORT SALE OBSERVATIONS
For all you short sale Realtors - Here is my list of the top ten short sale rules when dealing with sellers and buyers. What is your top ten list for YOUR favorite category involved in the short sale process (lender, buyer, seller, buyer Realtor, Seller Realtor, processor, loss mitigator and servicing agent, etc.)?
YOUR Ticket to Normalcy? THE BAILOUT BILL
The Emergency Economic Stabilization Act just passed on October 3rd is not the cure-all you might hope for. The Act authorizes the creation or expansion of governmental entities and departments to deal with the housing crisis. Implimenting these provision is what will create the "cures". Assuming the "cures" are in place, there are going to be effects upon Realtors, Mortgage Brokers and Distressed Homeowners. This is how I see the Act helping each group.
EMERGENCY ECONOMIC STABILIZATION ACT - WHAT IT MEANS FOR YOU
My wife asked a very important question this morning - so what does this new Act do for the housing market?
NUTSHELL VERSION - EMERGENCY ECONOMIC STABILIZATION ACT
The BIG news this week is the passage on Friday of the Emergency Economic Stabilization Act of 2008 - or more formally called "Secure Rural Schools and Community Self-Determination Act of 2000". Yes, that is how it started and it is known as H.R. 1424. What it says will change our economic horizon for decades and this article will discuss its major imports for the real estate buyer and seller and homeowners.
BAILOUT FOR HOMEOWNERS - WITHOUT WALL STREET
149 years ago today, Abraham Lincoln stated an important fact for today's financial crisis. But first a word of hope. It is human to think that when times are good, they will stay good. And when times are bad we all hope for good times. King Solomon went on a quest to find one item that would remind him to realize that good times or bad times, neither is permanent and to be prepared for the other. He found a ring imprinted with the saying, "this too shall pass".
FLORIDA FORECLOSURE FRAUD BILL - UPDATE
Government can react positively when enough people raise their voice - and the law is clearly against public policy. This post updates my article on the Florida Foreclosure Fraud Bill
Second Mortgage Short Sale - Holding Up the Railroad Loot
The Second Mortgage Dilemma can ruin your short sale - Like the old West, the stagecoach holding the railroad's payroll was always getting held up by the bad guys - at least in the movies. Has much changed in the Wild West environment of short sales and the fight between primary and secondary mortgage holders?
BANKS CREATE BILLIONS (MORE) IN LOSSES -
Short Sale Buyers are increasingly investors seeking to buy and flip or buy and rent for positive cash flow. Missing from the field are homebuyers seeking a place to live. Why?
Foreclosure Deficiency Judgment Compared to Deed In Lieu and Short Sale Scenarios -
Basic Primer - the Mechanics of a Mortgage Foreclosure Deficiency Judgment Compared to Deed In Lieu and Short Sale Scenarios - We get so many questions about having a "deficiency judgment" entered and how it differs from other possibilities in a deed in lieu of foreclosure or short sale, that a refresher article seems appropriate for Activerain. If you are unsure of what a Short Sale is, then first read the Back to Basics - a Review on Short Sales
Back to Basics - a Review of Short Sales
Short Sale Primer - Back Room Lender Decisions - Short sales are nothing new. When I represented a national lender for all of their foreclosures in the State of Florida several years ago, we negotiated "loan workouts" which are now called "short sales". Since they have been around so long, I did some digging with my old pals that were the executives I worked with in the loan workout and REO department of this national lender (the lender has since been merged into Bank of America).
There is discussion on Active Rain from time to time on whether in a short sale it is advisable to move out of the house. The real issue is the clause in the mortgage that says the bank can change the locks on the house if it is "abandoned".
A-T-T-O-R-N-E-Y Spells T-R-O-U-B-L-E in Short Sale -
Sad Facts about Attorney Misconduct in a Short Sale
FLORIDA FORECLOSURE FRAUD BILL - MY LETTER TO GOV. CRIST
See UPDATE to this blog and how it was resolved - at FLORIDA FORECLOSURE FRAUD BILL - UPDATE
SHORT SELLER STILL MUST DECLARE INCOME ON SALE! -
The Mystery of income you can't spend - but do you have to declare it? When DON'T you have to report forgiven debt (from a short sale, deed in lieu or foreclosure with release from the lender) as income?
CALLING ALL ETHICAL LOAN OFFICERS - HELLO? ANYONE THERE?
CREDIT REPORTING AND SHORT SALES / FORECLOSURES - REVISITED -
I received an email on my quest to find the real answers to the incessant question of how a foreclosure vs. short sale vs. deed in lieu all affect the credit report of the borrower.
1099 REPORTING - IT'S THE LAW! - OR IS IT??? -
1099 SHORT SALE REPORTING - IT'S THE LAW! - OR IS IT??? Since I have developed my SHORT SALE law practice I have a lot of clients that are in foreclosure or close to it. They all ask me about 1099 reporting and if the bank can forgive the debt and not issue a 1099. Now let's see what the law really says.
DIVORCE - CHAINS TO THE UPSIDE DOWN HOUSE VALUE CAN BE BROKEN!!! -
Chained to your home and can't get a divorce? You are not alone!
SHORT SALE FLIP - QUESTIONABLE METHODS -
SHORT SALE FLIP - QUESTIONABLE METHODS - This article is a follow up to an issue discussed in December titled Short Sales and Title Insurance - Critical Look at Hybrid Closing Schemes.
FORECLOSURE DEFICIENCY ORDER VS SHORT SALE NEGOTIATED PAYBACK -
I was negotiating on a very large problem mortgage today with a high-up executive at the servicing firm. He made a comment that I thought peculiar and I called him to task on the matter. The comment was that "after the foreclosure sale, lenders seldom bother to get a court ordered deficiency judgment". I knew this to be false, because lenders today - more than in the past - are investing a few hundred more in attorney fees to get a deficiency judgment. I will tell you why.
REAL QUESTIONS - HOW DOES A SHORT SALE AFFECT CREDIT SCORES???
In a discussion today with a client we addressed the question of credit scores and short sales. This is a hot topic and there is information everywhere on what happens and when and for how long.
FORM RELEASED BY IRS FOR DEBT RELIEF ACT FILING -
New IRS Form for Filing for Debt Relief
No-Conflict Considerations in Short Sale Fees
As short sales and pre-foreclosure assistance servicers proliferate, the type, style and amount of fees that these individuals and companies charge has become ingenious and varied. This article discusses the rights and wrongs regarding the most popular of the charging methods.
TOO MUCH MONEY IN THE BANK TO DO A SHORT SALE? - ECONOMIC LOGIC -
This week I spoke with several people that wanted to do a short sale of investment property that is upside down in value. They are sick and tired of the short fall on rental income (if they are lucky to have a renter that actually pays rent) vs the mortgage payment, taxes, insurance and maintenance costs.
Who Says Owner Doesn't Have Time To Do a Short Sale? -
Some writers to my blogs have commented that "they don't have time to do a short sale".
WHAT DO I DO? -- I'M UNABLE TO PAY MY MORTGAGE -
As an attorney, I receive plenty of telephone calls and visits from people that are no longer able to pay their mortgage on their home or investment property. They all have endless questions and usually tell me they are getting all sorts of advice that they don't like. They come to me to find their BEST solution.
It is really amazing how many people - professionals as well as potential sellers - do not even know what the term "short sale" means. This blog assumes you have actually worked a short sale already -- if you have -- or if you are curious -- read on!
Mortgage Forgiveness Debt Relief Act of 2007- Another Look -
I have been getting a lot of calls and emails about the Mortgage Forgiveness Debt Relief Act of 2007. The new law became effective today, and applies to 1099's on short sales or foreclosures retroactive to January 1, 2007.
MORTGAGE RELIEF ACT - CHRISTMAS PRESENT TO PRIMARY HOMEOWNERS -
On Thursday the President signed into law - effective New Years Day, the Mortgage Forgiveness Debt Relief Act of 2007.
Underwater - The Cycle Repeats Itself -
I cannot be surprised at the stories in the newspapers about homeowners, investors and even commercial property owners being "Underwater" with today's depressed real estate market values. Many people that own real estate today were just pre-teens when the last deep cycle occurred. Or if they are older, they were not in the real estate market at that previous time.
Short Sales and Title Insurance - Critical Look at Hybrid Closing Schemes -
Recently I have seen various schemes for streamlining the short sale process for the buyer/investor. Some discussions have been somewhat heated and involved concepts like dual contracts or even insolvent borrower creating a Land Trust for use by the investor/buyer. At best, the agreement amongst the blog commentors has been to agree to disagree.
WHO CONTROLS THE SHORT SALE? -
In this environment of the short sale it seems apparent that the bank controls the sale. Some might say the buyer controls the sale. My opinion is that both statements are primarily incorrect. The seller owns the house. The seller must sign the contract. The seller must sign the deed.
TAX DEEDS - COURT DEVELOPMENTS NIX SALE! -
Tax Deed purchases are popular in many states as a way to acquire real estate at truly rock bottom prices. Generally a tax deed purchase is first in line after just a few significant "super" lienholders: (1) God, and (2) Code Enforcement Liens. Practically all others having an interest in the property are wiped out in a tax deed sale.
LOW BALL SHORT SALES - PLAYING THE ODDS? -
Short Sales are the buyer road to riches - if you believe the promo advertising that is all over the place. But the road is not a short one nor is it a smooth one. It is best covered with professional help and guidance.
BORROWERS FACING FORECLOSURE OFTEN OVERPAY - STUDY FINDS
Is our system of foreclosure out of control? Are the banks acting fiduciarily to their borrowers in the loan management process - are they requred to?
Apparently there are lots of "White Knight Claims" being made against title insurance policies. Here are some of the fact patterns:
In my law practice we see a lot of short sales. Indeed, we offer a service to Realtors and Sellers to process their short sale material with the lenders (without the downward pressure and lowball influence from an investor handling the process). I have worked statewide with lenders - visiting their loss mitigation departments and sitting in on committee meetings. Knowing the process is key knowledge to improving the percent of short sale lender approval.
TRUE STORY - Renter forges deed, then conspires to sell house and pocket mortgage proceeds -
It is a day past Halloween, but here is a scary TRUE story
Some Sellers Think They Are ENTITLED To A SHORT SALE -
I had just too many borrowers that "should have known better" in the office this week - so I feel very conservative just now.
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Copyright 2007, 2008, 2009 and 2010, Richard P. Zaretsky, Esq.
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