The Consumer Financial Protection Bureau (CFPB) , an agency created to protect consumers with their credit choices and concerns, whether auto, mortgage, student loans or other, has recently become very involved with lenders and their loss mitigation assistance to consumers.  On August 19th, the CFPB issued a bulletin for mortgage servicers, outlining how they should handle loan transfers.  Loan transfers are sales of mortgages, through assignments, from one lender to another, which today, with so many foreclosures and delinquent loans, is commonplace.

The bulletin includes a reminder to mortgage servicers to pay close attention to the new common-sense mortgage rules implemented by the CFPB in January 2014.  These rules pertain to foreclosure sales, and urges courts to stop foreclosure sales when loss mitigation applications, either loan modification or short sales, are pending and in the lenders hands 37 days prior to the foreclosure sale.  While courts are not bound by the rules, they are guidelines for the courts to follow, for the ultimate protection of American consumers.

In recent years, the numerous transfers between lenders, done either through botched assignments, or robo-signers, has affected consumers by failing to know who owns their loans.  Consumers are led to believe that one creditor owns the loan, when in fact the loan was transferred and the borrower never made aware, as required by Florida Statutes.

To inquire how the CFPB can work for you in your loss mitigation, loan modification or short sale pursuits, call us.  We can review your loan paperwork and advise whether a complaint can be filed again the lender, or whether the lender is in compliance with CFPB rules.

The first consultation is always free.

TRUST   |  COMMITMENT  |  RESULTS

 

LAW OFFICES OF JACQUELINE A. SALCINES, PA

706 S. DIXIE HIGHWAY

SECOND FLOOR

CORAL GABLES, FL 33146

TEL: 305.669.5280

EMAIL: J.SALCINES@SALCINESLAW.COM

 

If your forgiven debt, under a short sale, loan settlement or credit card cancellation and settlement, your forgiven debt is subject to taxation.  You will usually receive a form 1099-C Cancellation of Debt from the lender. This form sets out the amount of cancelled or forgiven debt. You will file the 1099-C with your federal tax return the following year, and the amount of cancelled debt is added to your gross income.

There are however exceptions and exclusion that may save you from the requirement to report cancelled debt as part of gross income.

Exceptions and Exclusions:

Not all cancelled debt is subject to income tax.  The IRS recognizes both exceptions to cancelled debt rules as well as exclusions. The following is some of the exceptions:

1. Gifts, bequests, or inheritances
2. Some qualified student loans
3. Any debt that had it bee paid, would have been deductible by the borrower
4. A qualified reduction in price offered by a seller
5. Certain payments on the balance of a mortgage under the Home Affordable Modification Program

 

When a loan is secured by real estate property, such as a mortgage, and the lender accepts a short sale, you may need to report the forgiven debt as capital gains or losses on the sale of property.  However, exclusions apply:

• Debt cancelled under certain bankruptcies
• Cancelled qualified farm debt
• Cancelled qualified real property business debt
• principal residence indebtedness under the Mortgage Debt Relief Act

 

The Mortgage Debt Relief Act covered debt forgiven from 2007 through 2013.

The cancelled debt is also not income if you receive a Form 1099-C as a result of:

• You received the cancelled debt due to a bankruptcy; or
• you are insolvent immediately before the cancellation of the debt.

 

Insolvency is defined as your debt exceed the value of your assets.

Cancelled debt can be challenged both PRIOR to the 1099-C being issued.  That is why hiring an attorney to negotiate the short sale and make sure the borrower/seller is provided the proper classification for the home and debt forgiveness, is crucial.  The term of the 1099-C will be listed on the short sale approval letter and once issued and signed, can not be changed or modified.

Cancelled debt can also be challenged AFTER the 1099-C is issued.

Don’t go it alone.  Speak to a knowledgeable attorney to handle your short sale so that you are aware of your tax consequences and can structure the best possible outcome for your needs.

Attorney Jacqueline A. Salcines, Esq., is also an accountant and can provide tax advice as well as negotiate the sale of your property and short sale terms.  The first consultation is always free of charge.

 

TRUST  |   COMMITMENT  |   RESULTS

 

LAW OFFICES OF JACQUELINE A. SALCINES

706 S. DIXIE HIGHWAY

2ND FLOOR

CORAL GABLES, FL 33146

TEL:  (305) 669-5280

J.SALCINES@SALCINESLAW.COM

 

 

In 2012, under the Wigod v. Wells Fargo Bank, N.A., 673 F.3d 547 (7th Cir. 2012), the Seventh Circuit Court of Appeals ruled that despite having signed a loan modification agreement and entered into a trial period, the homeowner could maintain a private cause of action against the lender or servicer under certain circumstance.  The court held that borrowers who have entered into a trial period plan under HAMP can seek relieve when those servicer fail to abide by the terms of the trial period payment plan.

Under HAMP, the borrowers are provided with a trial period, requiring them to make payments for usually three months, and thereafter, the final modification agreement is supposedly mailed to the homeowner borrower.  However, in cases, the bank does not follow through with the final HAMP modification and fails to offer it to the borrower. Or may fail to adhere to the same promised payments as set forth in the trial period.

In Wigod, the homeowner Wigod, was given a trial period payment plan and advised that upon completion of the trial period, the bank would offer a permanent modification after all the payments were made.  The borrower made the payments and the bank reneged on its offer and declined a final modification.  The borrower sued alleging breach of contract, promissory estoppel, consumer fraud and fraudulent misrepresentation.

The Seventh Circuit on appeal found that the lender misled the homeowner into believing that it would offer her a permanent modification.

Following Wigod, courts across the nation have been diligently reviewing their trial period plans to avoid being sued.  The homeowners should have in fact signed the trial period plan and received it back fully signed by the lender.

Ensure that your loan modification is carefully processed, eligibility determined, and diligently approved by the lender by hiring the Law Office of Jacqueline A. Salcines, PA to enforce and negotiate it for you.  We are always on top of all court rulings for homeowners and here to protect your best interests.

TRUST  |  COMMITMENT   |  RESULTS

 

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

706 S. DIXIE HIGHWAY

SECOND FLOOR

CORAL GABLES, FL 33146

TEL.  (305) 669-5280

EMAIL:  J.SALCINES@SALCINESLAW.COM

 

Providing up to $50,000.00 in mortgage payment and reduction of mortgage balance, the Florida Hardest-Hit Fund Principal Reduction program will reopen on May 15, 2014 at 9 AM.  Last year the program accepted 25,000 applications and provided aid to more than 2400 homeowners.

The qualifications for the program are strict and require, among other things, that the homeowner have remained current on their mortgage, but missed out on the opportunity to apply for the program last fall.  Homeowners can get up a break up to $50,000 if they qualify.

Call us today to find out about the program. We can let you know of the qualifications and direct you to the government website to apply. The consultation is free of charge.

TRUST  |  COMMITMENT  |  RESULTS

 

Law offices of Jacqueline A. Salcines, PA

706 S. Dixie Highway

2nd Floor

Coral Gables, Fl  33146

Tel.  305.669.5280

Email Direct: J.Salcines@Salcineslaw.com

 

 

Realtors, homeowners, let us handle your short sales. Our proven track record of getting files negotiated under 90 days time, with as many homeowner HAFA and seller incentives as possible speaks for itself.

At the Law Offices of Jacqueline A. Salcines, PA, our main goal is to protect our seller client.  If a short sale is being negotiated, often times title companies and realtors wait till the file is approved to then run title or lien searches only to have to slam on the brakes when a judgment or code enforcement lien comes up. Then it is back to the drawing table to get a lender to pick up the bill.

Since we are a law firm and specialize in real estate, as a Title Agent, Attorney and Accountant, Jacqueline A. Salcines, Esq.  runs and examines title at the beginning of the negotiation. Additionally, we partner with lien search companies providing results for liens and other matters before the file is even submitted. That gives us ample time to review what may amount to large liens or other matters against the property.

Additionally, we fight for our clients rights.  Whether it is a $20,000 incentive to be provided  to the homeowner, or a write off of the deficiency because of the primary residence,  we know what our client is entitled to and escalate the short sale to make sure they are provided.

Our staff is experienced in foreclosure prevention and foreclosure sale continuances.  We work diligently with realtors and sellers to provide updates and obtain the best results for our clients.

Call us today to see how we can help you.

TRUST   |   COMMITMENT  |  RESULTS

 

LAW OFFICES OF JACQUELINE A. SALCINES, PA.

706 S. DIXIE HIGHWAY

2ND FLOOR

CORAL GABLES, FL 33146

TEL:  305) 669.5280

EMAIL: J.SALCINES@SALCINESLAW.COM