Short Sale to Avoid a Deficiency Judgment

, , ,

short_saleMany homeowners, and realtors alike (offering short sale advice to their clients), are unaware that a short sale on a primary residence in Florida, will result in a complete forgiveness of debt to the homeowner seller.  The American Taxpayers Relief Act of 2012, which extended the Mortgage Forgiveness Debt Relief Act through December 31, 2013, provides full protection to homeowners who sell in a short sale and have part of their mortgage debt written off or forgiven.  Under this Act, if the home is the primary residence of the borrower and either a short sale, deed in lieu or certain other loss mitigation was completed, resulting in the forgiveness of debt to the homeowner, then that loan forgiveness is tax free and forever waived.  The lender can never again pursue the borrower to claim any penny of it.

Many homeowners in foreclosure wrongly think that “riding it out” is the answer.  They arrive at the incorrect conclusion that they can live years mortgage free and then, once the home sells in foreclosure, they are wiped away of the debt.  This is an INACCURACY.  If the foreclosure sells at auction, the lender may still claim the judgment or difference against the homeowner, which could result in a garnishment of wages, a freezing of debtors assets, bank accounts, seizing of any cars or boats or other methods to satisfy the debt. While unfortunately many colleagues continue to charge monthly for foreclosure defense,  all they are buying is time.  At the end, a trial or motion for summary judgment will creep up and if the borrower has done nothing to try and sell the property or modify, then most likely a judgment will result against them.

I always encourage foreclosure clients that I defend to find a solution early. Finding a solution early does not mean you have to move out.  On the contrary.  You may actually buy yourself more time, while a solution is found.  Be it either a short sale, loan modification, a deed in lieu of foreclosure, a HARP refinance or any other alternative that exists today, simply riding it out is not the solution.

Contact me for a complete analysis of your financial situation to see if you qualify for a short sale, for a loan modification and whether your home can be saved.  Only by hiring the services of a professional attorney will you be provided accurate and complete information to save you from a deficiency.

TRUST  |  COMMITMENT  |  RESULTS

Law Offices of Jacqueline A. Salcines, PA

706 S. Dixie Highway

Second Floor

Coral Gables, FL 33146

305 |  669  | 5280

 

/by

PREAPPROVED SHORT SALE PROGRAM FOR FHA

, , ,

short_saleIf you are like many out there that are struggling to make your mortgage payments and have an FHA loan, there is good news.  The government has rolled out a new program that Pre-Approves Short Sale prices for homes where the loans are backed by FHA.  In order to qualify, you will first need to make sure that your loan is an FHA loan.  This is easily determined by either looking at your mortgage statement or your closing statement.  If you are charged and pay PMI mortgage insurance, then you have an FHA loan.  Otherwise, you can call your lender or servicer and they will indicate whether it is an FHA loan.

ELIGIBITLY

The difference between this Pre-Approved FHA SHORT SALE  and a traditional short sale, is that the borrower is not required to have a contract  for Sale and Purchase in order for the lender to start working the file. Rather, the borrower can contact us to apply for the short sale, we will request from the borrower and submit financial documents to substantiate the financial hardship. Once the  lender has the borrower’s financial information, they will order an appraisal by and FHA certified appraiser that will determine price.  Once the fair market value is determine and the lender further determines what they need to net from the short sale, an approval letter is sent out to us with the listing price, or minimum they will accept.  ITS THAT EASY!

TIMELINE

From beginning to end, the process is taking between 30 to 40 days and is hassle free.  Moreover, it takes the work away from the realtors of having to play with the numbers and comparables, since the bank will advise what number they  need to net from the short sale closing.

MONEY GIVEN TO BORROWER

And even greater news is that the borrowers usually obtain a $1,000.00 incentive check for their own moving expenses.

There are other qualifications that are required of the borrowers.  We invite you to call our office to discuss your options and allow us to negotiate your short sale for you.

The Law Offices of Jacqueline A. Salcines, PA,

706 South Dixie Highway, Second Floor, Coral Gables, FL 33146

Telephone  305 .  669  .  5280       Email:  J.Salcines@Salcineslaw.com

TRUST    |      COMMITMENT    |    RESULTS

 

/by

1.7 MILLION HOMES MOVED ABOVE WATER IN 2012

, , , , ,

foreclosure process CoreLogic reports that in the 4th Quarter of 2012, over 200,000 properties came up from being “underwater” and a total of 1.7 Million homes in all of 2012.  Source: DS News.com  To read the full article go to www.dsnews.com/articles/corelogic-17m-homes-moved-into-positive-territoy-in-2012.

What does this mean for those selling… that it is once again a sellers market.  That asking price once again retrieves dozens of contracts, over asking price, many from cash buyers.

What does this mean for those buying… that the market is once again competetive and will weed out those looking for distressed bargains.

What does this mean for those looking to modify… that the lenders will most likely make less and less principal reductions, as appraisals show that mortgages are once again not so far apart from fair market value and will not pass the NPV test.  Many that refinanced or took out second mortgages or HELOC’s may still experience negative equity, but it may be harder and harder to modify.  Proper, uninflated values must be closely calculated and provided to the lenders.

What does this mean for those short selling… that once a BPO is ordered, a bank may likely counteroffer on price as the buyers are coming in too low for fair market value sustained prices.

Whether you are looking to sell or buy, now is the time to once again use increased scrutiny when placing an offer or accepting an offer. It appears that we are once again riding another bubble that may likely burst if inventory is set loose.

Stay tuned for 2013 1st Quarter results.

LAW OFFICES OF JACQUELINE SALCINES, PA

TRUST  |  COMMITMENT  |  RESULTS

/by

HAFA SHORT SALE RULES LAX IN 2013

, , , , ,

THE TRADITIONAL SHORT SALE HAS BEEN REPLACED WITH THE SIMPLIFIED HAFA SHORT SALE, WHICH IS MAKING SELLERS AND BORROWERS’ CHANCE OF APPROVAL MUCH EASIER THESE DAYS.short_sale

The main differences under the HAFA short sale that affect borrowers is the following:

  • No Occupancy Requirements – The borrower need not prove that the residence is their “primary residence” as defined under the Making Home Affordable rules.  The only restriction is that the borroewer may not have purchased a primary residence in previous 12 months.
  • The 31% Ratio No longer Used –  Mortgage payments are now permitted to exceed the 31% of gross monthly income if the borrower is current on their mortgage
  • Second Mortgage Paid $8,500.00 – Secondary lienholders (depending on investor) must now be paid $8,500.00 from the first lien holder
  • Relocation Assistance –  Seller/Borrowers must receive relocation incentices up to $3,000.00 (depending on investor and type of loan, and if occupied by the Tenant may receive the incentive $3,000.00
  • Credit Bureau Reporting –  Short Sale lender will now report the paid off account as account status code “13” which is account paid or close/account zero balance or code “65” account paid in full.foreclosure stated” as applicable.

Rules are also more lenient regarding whether the Short Sale is a result of a divorce, downsizing, as well as requriements regarding income reporting.

Of equal importance, is how the short sale and capital gains are being forgiven in the eyes of the IRS when the 1099-C is reported.

For up to the minute Short Sale information and to have you qualified, call THE LAW OFFICES OF JACQUELINE SALCINES, ESQ.

TRUST     |    COMMITMENT    |    RESULTS            TELEPHONE:  305.669.5280

 

 

/by

JANUARY FORECLOSURE ACTIVITY MAKES FLORIDA NO. 1 IN NATION

, , , ,

According to The Miami Herald, “Florida claimed first place in the nation in foreclosure activity in January – eclipsing much larger California, according to data in RealtyTrac.”  – The Miami Herald, Thursday, February 14, 2013. short_sales

The Realty Trac report shows:

The Florida foreclosure rate ranked highest among the states for the fifth  month in a row. One in every 300 Florida housing units had a foreclosure filing  in January — more than twice the national average. A  total of 29,800 Florida properties had a foreclosure filing during the month, up  12 percent from the previous month and up 20 percent from January  2012.

With one in every 344 housing units with a foreclosure filing in January,  Nevada posted the nation’s second highest foreclosure rate for the fourth consecutive month. Overall  Nevada foreclosure activity decreased 43 percent from a year ago, but  foreclosure starts (NODs) increased 19 percent from the previous month and were  up 87 percent from January 2012 to a 16-month high.

A 32 percent month-over-month jump in scheduled foreclosure auctions helped the Illinois foreclosure rate  rise to third highest among the states in January. One in every 375 Illinois  housing units had a foreclosure filing during the month.

Read more:  Great Foreclosure News, Except for Florida and California — RealtyTrac – 24/7 Wall St. http://247wallst.com/2013/02/14/great-foreclosure-news-except-for-florida-and-california-realtytrac/#ixzz2KtMJ2d8R

The burning question is… will this affect our incredible recovery here in South Florida? Will prices take a hit once the  thousands of expected foreclosures are filed in the coming months?  Only time will tell.  Obviously, by placing more distressed homes into the market, inventory of homes will go up, and values are destined to decline. But, short sales and distressed property sales rely on BPO’s , or market appraisals.  Market appraisals take into consideration what is selling, what has sold, distressed or not.  So, while this may be bad news for the investors looking to pick up some more distressed properties, it is good news for sellers of non-distressed properties.

“My prediction…values will take a small dive, but our upward climb will continue and we will once again be at 2004 and 2005 values, in a short time”.  – Jacqueline A. Salcines. Esq.

Don’t go it alone.  Rely on the services of a qualified Real Estate Lawyer to analyze your current situation and provide you with the best knowledge available to make an informed decision.

Call for a free consultation.     305  |  669  | 5280

 

 

 

/by

SHORT SALES HELD HOSTAGE BY SECOND MORTGAGE HOLDER

, , , , , ,

You’ve all heard the story before, months and months of laboring to get the short sale approval, you finally get it and the second lien holder or mortgage company will not accept what the first lien holder is agreeing to pay them.  Result:  Now your short sale is held hostage.  The first will not pay more, the second will not accept less.  What are the alternatives to get this approved after so much hard work?short_sale

Well, first of all, anyone negotiating or selling their home in a short sale must be familiar with their rights. Under the HAFA (Home Affordable Foreclosure Alternative) Program, the first lien holder MUST, not may, MUST, pay the 2nd lien holder $8,500.00. There are rules that regulate this payout and therefore the 1st lien holder can not wiggle its way out of this.  And the 2nd lien holders are keenly aware of these regulations.

Now, if the short sale falls outside of the HAFA Program, then you have a dilemma.  For the most part, the 1st lien holder will request a payoff statement of the first and typically (I say typically because in short sales there is nothing typical), they will pay 10% or a maximum of $6,000.00

“I have been negotiating short sales for quite some time and they (the lenders), for the most part, do adhere to the 10% rule.  But, in the event they pay less and the 2nd lien holder demands more, this is NOT necessarily the end of the line.  There are still options.  If the borrower is receiving an incentive at closing from the 1st lien holder, the 1st bank will allow the borrower/seller to contribute that money towards paying off the 2nd.  They will also permit you to enter into a promissory note, usually at 0% interest, ten (10) years, in order to reach that number.  Or, in the alternative, all the other parties in the game can make some contributions. Often times, realtors as well as the buyer are agreeable to making certain concession in order for the great deal to go through.  After all, if the closing falls through, the nobody gets paid and the buyer doesnt get their property.”  –  Jacqueline A. Salcines, Esq.

So, while the 2nd lien holder can certainly hold a short sale hostage and there are no laws you can use to force them to agree to a payout, there are still some alternatives to make the short sale go through to closing.

Short sales are crafty games played by crafty players.  Everyone has to have some skin in the game to make the process work smoothly.

And, if it goes smoothly, then as in any games, there will be many winners, and perhaps a few losers (the banks).

Dont go it alone. Consult a professional real estate lawyer to handle your mortgage problems.  We are a phone call away.

LAW OFFICES OF JACQUELINE A. SALCINES, P.A.

JACQUELINE A. SALCINES, ESQ.     TELEPHONE:  305  | 669 | 5280

 

 

/by

BILL TO HELP UNDERWATER HOMEOWNERS

, , , , , ,

The Responsible Homeowner Refinancing Act of 2013 was reintroduced this week for approval by Congress. Home floating on a life preserver.

This bill, if passed, will benefit responsible homeowners who have stayed afloat and maintained their mortgage payments current, despite their home values being upside down.  Responsible for the introduction of this bill are U.S. Senators Robert Menendez (NJ) and Barbara Boxer (CA).  First introduced in the 112th Congress but not passed, the bill is now gaining momentum again.  Perhaps more relevant now that the housing market is experiencing a recovery, though not quick enough for underwater homeowners  who have been unable to modify for too much income, and unable to refinance for too little equity.  This bill will also affect the impending wave of new foreclosures predicted for 2013, removing some homeowners from foreclosures all together.

Under the proposed bill, hardworking, responsible homeowners who entered into high interest, or interest only loans, will be able to refinance,  and reap the reward of current interest rates which are at 3.53 percent.  Responsible homeowners will be able to avoid foreclosure and have some money in their pockets.

The bill, which will enchance the current HARP program, seeks to eliminate the requirements that borrowers verify income or employment, as under the current HARP rules. The bill will also affect that manner in which appraisals are approved and handled, and reduce the cost and time for borrowers and lenders alike.  It will also extend the HARP program by one more year, through the end of 2014.

“This is great news for the underwater homeowner.  The HARP program has been fantastic in throwing a life preserver to the homeowner that is current on their mortgage and we have seen many mortgages reduced through principal reductions.  I am glad that Congress is taking note of the homeowners and how they are suffering in the current state of our real estate market.” Jacqueline A. Salcines, Esq.

So, this is more good news for underwater homeowners!  Now, if only the real estate market will continue to improve, we sseem to be almost out of the woods!!

DONT GO IT ALONE.  For more information on whether you qualify for a HARP Refinance, modificaiton, short sale or other relief, call me anytime.

Jacqueline A. Salcines, Esq.

Jacqueline A. Salcines, PA

A law firm dedicated to all of your real estate needs.

305 |  669  |  5280

/by

HOW TO BUY AND SELL IN THE 2013 REAL ESTATE MARKET

, , , , , , , ,

Many buyers and sellers are on pins and needles… not knowing whether to take the plunge and buy a property or place their homes on the market and take a chance that they are making the best profit.  Certainly no one expected the housing market, paricularly the Miami, Coral Gables and Pinecrest areas, to go up so dramatically since the bubble exploded.  However, the wave of recent sales and the return to the 10 contract deals, has certainly put the market back in the sellers hands. 20130201-182045.jpg

So, to invest or not to invest?  That is the question.  TrustED market researchers and forecasters predict a steady 1% to 3 % increase in home prices in 2013, but is this accurate? Afterall, Miami, Florida is certainly not the norm, and in some areas, prices are inching back to 2003 and 2004 levels.  Certainly, the market has turned the corner and the chances of the bubble burting again, are very slender.

There is also the issues of the Mortgage Interest Tax Deduction that will impact recovery. While most tax specialists expect a “cap” rather than a full elimination, for the LUXURY HOME BUYER and higher income folks, this is something that needs to be considered as it may affect their benefits from the tax deduction.

Sales are also being helped by record low mortgage rates, lower unemployment and a decrease in distressed home sales.  This is causing an improved demand for homes, specifically in the South Florida area, where inventory is so diminshed.

The National Association of Realtors reported that while December sales were just slighly below November, sales for the full year (2011) were the best we’ve seen since 2007.  Source: National Association of Realtors.

“As a real estate professional in the business for more than 15 years, the best advice I can give for navigating the 2013 real estate market is to hire the right team of professionals, including a knowledgeable attorney to check title and a realtor who can assess home values, comparables in the area, as well as determine the best price to come in at or list at.  This will remove your competition and provide you with peace of mind that you are buying or selling at the best price, a price supported by our presend day real estate market.”  Jacqueline A. Salcines, Esq.

JACQUELINE A. SALCINES, ESQ.  WE ARE A LAW FIRM DEDICATED TO ALL OF YOUR REAL ESTATE NEEDS.

TRUST  |  COMMITMENT  |  RESULTS

CALL THE REAL ESTATE LAW FIRM OF JACQUELINE A. SALCINES, P.A. FOR A FREE CONSULTATION:  305 | 669 | 5280

 

/by

KEY CHANGES TO FANNIE MAE AND FREDDIE MAC SHORT SALES TO IMPACT INVESTORS

, , , ,

On Friday, January 18, 2013, Fannie Mae and Freddie Mac announced changes to their servicing requirements for short sales. These changes apply to all Fannie Mae and Freddie Mac short sales, with an offer and without an offer.

• Title Transfer requirement change:

o The buyer is prohibited from selling the property for any sales price for a period of 30 days from the date of the deed.

o After a 30 day period, and until 90 days from the date of the deed, the buyer is further prohibited from selling the property for a sales price greater than 120% of the short sale price.

This restriction runs with the land, meaning that it is not personal to the seller and will transfer to the new buyer.

Below is an example on how to calculate the 120%:

o Purchase Price is $100,000.00
o 120% of the purchase price would be $100,000.00 X 1.2 = $120,000.00

• Relocation Assistance:

o The borrower may be entitled to an incentive payment of $3,000 from Fannie Mae / Freddie Mac to assist with relocation expenses following successful completion of a short sale unless:

1. The borrower is required to contribute funds or execute a promissory note.

2. The borrower has Permanent Change of Station (PCS) orders and receives a Dislocation Allowance (DLA) or other government relocation assistance.

3. The servicer has knowledge that the borrower is receiving relocation assistance from another source other than the servicer.

Note: If the borrower receives relocation assistance from a source other than Fannie Mae / Freddie Mac or the Servicer, the difference in the relocation assistance amount up to the $3,000 incentive maximum may be provided. If the borrower will receive relocation assistance from a source other than Fannie Mae / Freddie Mac or the Servicer and the amount is equal to or greater than $3,000, no relocation incentive will be provided.

With all these changes, now more than ever, it is crucial to have an attorney negotiate and close your short sale. THE LAW OFFICES OF JACQUELINE A. SALCINES, P.A. is dedicated to negotiating short sales, and providing both title work and title closing services for all closings. Call us for a free consultation. Tel: 305.669.5280. or visit us on the web WWW.SALCINESLAW.COM

/by

MORTGAGE FORGIVENESS RELIEF ACT OF 2012 TO PROVIDE RELIEF FOR DISTRESSED HOMEOWNERS

, , , , ,

MORTGAGE FORGIVENESS RELIEF ACT OF 2012 RELIEVES DISTRESSED
HOMEOWNERS IN SHORT SALES AND LOAN MODIFICATIONS FOR ONE MORE YEAR

Finally, Congress came to its senses, and extended the debt forgiveness benefits for qualified homeowners. Through the passage of the American Taxpayer Relief Act of 2012, qualified distressed homeowners who have any debt forgiven as a result of a short sale, foreclosure or loan modification principal reduction, will not have to pay taxes on any debt forgiven. This protection is now extended through December 31, 2013. Homeowners will still receive a 1099-C form that will need to be reported to the IRS, but will not be liable for any amounts owed to the IRS for such cancellation of debt.

Under the Federal Tax Code, all types of forgiven debt are treated as income, and is subject to taxes. Because of the recently passed Mortgage Forgiveness Debt Relief Act, homeowners who get their mortgage debt forgiven through either a short sale or loan modification, will not face a tax on the amount forgiven, up to $2 million dollars. “Forgiven Debt” refers to the difference between the amount the homeowner owes on his or her mortgage and the amount the mortgage company receives at closing.

The law had short sellers scrambling to close by December 31, 2012, because had it not been extended, any forgiven debt would be considered taxable income. But now, with this new law, distressed homeowners are free to continue their short sales without having to worry about paying Uncle Sam any amounts after the closing.

Attorney Jacqueline Salcines states “In the advent of the housing market recuperating and so many homes in South Florida being in foreclosure and short sale, there was a dire need for the extension of this protection to homeowners. Many clients were coming into the office, wanting to walk away and face judgments or bankruptcy because they truly had no means of paying any amounts to the IRS. Now, with the protection extended, we can once again freely negotiate these short sale to completion without the homeowner worrying whether they will incur additional costs.”

“It certainly should not have taken so long to have this law extended. And it should be extended beyond December 31, 2013 because with so many homes in South Florida in distress, there will be principal reductions and short sales requiring forgiveness for years to come. This is not going to be cleaned up in one year.” Aida Pacheco, Loss Mitigation Manager at Jacqueline A. Salcines, P.A.

For now, we will have until December 31, 2013 to close existing short sales and modify loans. With our rapid team of short sale processors, we, at the Law Offices of Jacqueline A. Salcines, PA can get the job done.

/by