by evolveAdmin | Oct 11, 2012 | Foreclosure Defense
In good news for homeowners facing foreclosures, in August, the Federal Housing Finance Agency (FHFA) announced new guidelines for mortgage servicers. The agency aims to speed short sales with the change in guidelines. A short sale occurs when the owner sells a home for less than what is owed on the mortgage. This type of sale requires that the mortgage lender agree to forgive the difference owed. If a homeowner can demonstrate a hardship such as divorce, disability, the need to relocate more than 50 miles for work, or death of a borrower or co-borrower, lenders can now expedite short sales without any additional endorsement by Fannie Mae or Freddie Mac. Further, Fannie Mae and Freddie Mac will also waive the right to obtain a judgment against short sale borrowers who have the income or assets to provide cash contributions towards the difference they owe. Another key change provides special handling for military personnel with “permanent change of station” orders. Relocated military members automatically qualify for a short sale option, even if they are not behind on their mortgages. In addition, they are not required to cover the difference between the sale price of their home and the outstanding balance on their loans. The revamped rules also include: A more efficient process for handling short sales by borrowers in the most dire situations Merging existing short sale programs into one process Freddie Mac and Fannie Mae will offer up to $6,000 to second-lien holders in order to speed up short sales. In the past, second-lien holders were able to slow down short sales by asking for higher bids. These new guidelines...
by evolveAdmin | Aug 13, 2012 | Mortgage Assistance
A report by RealtyTrac highlights a problem for borrowers interested in a short sale of their home. According to Bloomberg, a RealtyTrac analysis showed only 4.2 percent of short sales were completed in the first quarter with second mortgages. The Bloomberg story notes that some holders of second mortgages can be demanding during negotiations, and stop a short sale cold. While a second mortgage holder may have the power to cause problems for a short sale, their power is not unlimited. If the home mortgage is underwater, the second lien holder is in the unenviable position of having gone from being a secured creditor to being unsecured. The second mortgage is now the equivalent of credit card debt, because there is no equity in the home to secure it. Relief Through Chapter 13 Bankruptcy Borrowers who are underwater and have a second mortgage could file a Chapter 13 and have the bankruptcy court strip the lien in the bankruptcy. In a Chapter 13, borrowers can reorganize their debts, pay mortgage arrears and remove any second mortgages on an underwater loan. This may give them the flexibility to remain in their home. During the Chapter 13, if they are unable to maintain their plan payments or it no longer makes economic sense to stay in the home, they could convert to a Chapter 7 and discharge most of their remaining debt, including any deficiency balance caused by a short sale or foreclosure. A bankruptcy attorney can provide advice as to whether a Chapter 7 or Chapter 13 bankruptcy would be the best solution for borrowers dealing with an underwater mortgage....
by evolveAdmin | Oct 20, 2011 | Foreclosure Defense
If you’re one of the many Florida homeowners struggling to make ends meet, to make your monthly mortgage payment or are facing foreclosure of your Orlando area home, Bank of America is offering a new incentive to Florida homeowners. In exchange for short selling a home rather than taking the bank through the foreclosure process, Bank of America is offering up to $20,000 to some Florida homeowners. In order to qualify, a short sale must be submitted for approval to Bank of America by November 30th. In addition, a home must not currently have an offer or offers pending and the sale must close by August 31, 2012. Not all short sales will qualify for the $20,000 payout to sellers, but the reported minimum payout is $5,000. The Florida foreclosure process is averaging almost two years from start to finish and is almost twice that of the national average. It is believed that Bank of America is trying to encourage homeowners who may be facing a Florida foreclosure to leave a home sooner and in better condition than some foreclosed properties have been by offering a relocation fee or bonus to the cooperating homeowner. What Exactly is a Florida Short Sale? A short sale, or short-selling a property, is selling a home for less than what is owed on the property. Under Bank of America’s current program, it will often agree to not seek a deficiency judgment from the seller for the remaining unpaid mortgage when a short sale is approved. For example, if you owe $200,000 on your home and the bank agrees to a short sale to a third party for $150,000,...
by evolveAdmin | Jul 12, 2011 | Bankruptcy
For the hundreds of Floridians whose employment with NASA, Lockheed Martin or other government agency or contractor in Central Florida depends on an active security clearance, fighting a Florida foreclosure may mean more than saving your house. It may also mean saving your job. Although no specific reports tie the number of denied or revoked security clearances to the current mortgage crisis, federal officials have noted an increase in both for purely financial reasons, including foreclosure. Why is a Security Clearance Related to Personal Finances? There are more than dozen criteria examined in when granting or revoking a security clearance; debt is one of them. When an applicant for a security clearance has substantial debt problems, that person could potentially sell confidential government information to generate additional income. The mere existence of a foreclosure on your credit report does not guarantee that an existing security clearance will be revoked or a new request will be denied. Examiners may consider factors surrounding both the purchase of the home–whether the purchase itself overextended the borrower at the time of sale–as well as the mortgage status throughout repayment and eventually foreclosure–did the borrower take steps, such as pursuing a loan modification or short sale, to change or end the financial obligation. Bankruptcy and Your Security Clearance A bankruptcy on your credit history may also affect your ability to obtain or maintain a security clearance. However, as with foreclosure, the circumstances surrounding your bankruptcy will be examined to determine what impact, if any, it will have on your security clearance. For example, if the bankruptcy resulted primarily from issues beyond your control, such as a large medical bill, it is...
by evolveAdmin | Jun 15, 2011 | Bankruptcy
Here’s the typical scenario: You owe more than what your home is worth. You have someone who will buy your house for what it’s currently valued at (called a short sale). Your mortgage lender agrees to the sale; the paperwork and sale are finalized. You give the keys to the new owner, move out and are relieved that you no longer are stuck paying for a home that just isn’t worth the money. You walk away and start over. But wait, it’s not over. You may still owe the bank the balance of your mortgage minus the money that was brought in from the short sale. This is called a deficiency and the bank has the right to collect that money from you even though you no longer live in nor own the house unless you received a “written waiver of deficiency judgment” from your bank upon the sale of the home. Florida law allows lenders up to five years to file for a deficiency judgment. Once the judgment is entered, your mortgage lender can collect the amount by garnishing your salary or bank accounts, placing a lien on any other real estate you may own or attacking any source of equity you may otherwise have other than your homestead. A deficiency judgment does not have to be pursued by your bank right away. In fact, many Floridians are just now receiving notices for homes that were sold by short sale two or three years ago. For many, a short sale may seem appealing as an answer to mortgage troubles. But, more often than not, bankruptcy is a better option. Whether you are...
