Saturday, June 9, 2007

Florida Foreclosure Laws

Florida does not have non-judicial foreclosure. It does not have anti-deficiency laws.

This article says that the foreclosure process takes about 5 months. (please seek a lawyer's advice, do not rely on this because you situation may be different.)

The foreclosure begins when a lender files suit and records a lis Pendens.

Florida Foreclosure Laws

California Anti Deficiency rules 580b

a bankruptcy court in Northern California giving the run down of California anti deficiency rules

Mortgages, foreclosures and deficiency judgments

Nice rundown of foreclosure results in California. The question comes up all the time --- can banks in California go after the borrower for a deficiency judgment.

According to the attorney who wrote this article. (and he is right because of rule 580) Not on a purchase money loan.

California protects home owners from deficiency against the holders of the purchase money mortgage. (the first mortgage that was used to buy the house.) If you refinance you lose that protection.

to read more:


Mortgages, foreclosures and deficiency judgments

Florida has no such protections against deficiency judgments.

Thursday, June 7, 2007

Legislature leaders issue framework for property tax cuts: South Florida Sun-Sentinel

Legislature leaders issue framework for property tax cuts: South Florida Sun-Sentinel

After reading this politician speak, I would say that my hopes for a strong tax cut are being negotiated away.

Bradenton Sarasota home sales surge

http://www.bradenton.com/280/story/49529.html
This article is form may 16 2007. The Bradenton Sarasota market was the only market in florida to have an increase in sales in q4. (up 6%).

Many in the real estate industry are thinking some of the buying going on locally is from people anticipating significant property tax cuts.

SignOnSanDiego.com > News > Business > Dean Calbreath -- On many mortgages, reckoning day coming

this is interesting stuff. two years ago 83% of the buyers in San Diego used adjustable rate mortgages as purchase money and 63% used arms to refinance.

And apparently the two year lock in are about to expire this month and for every month going forward.

Caveat - We have been hearing this cry for years. Will the bears be right this time? Prices of the median san diego home were down 3% from a year earlier. Where is all the pain the blog guys and housing bears are predicting.
I know there plenty of people looking to buy a 20-30% break in prices. Perhaps there is just too strong a bid under this market.

In my opinion as long the the banks are wiling to lend to lend out there the pain will not be widespread. (but I could be wrong, please do not selling puts on housing futures).




SignOnSanDiego.com > News > Business > Dean Calbreath -- On many mortgages, reckoning day coming

Foreclosure's Filthy Aftermath - BusinessWeek Online - MSNBC.com

Not really worth reading this article unless you want to see why banks know they do not want the houses back.

foreclosure up - pride in homeownership is down.

Foreclosure's Filthy Aftermath - BusinessWeek Online - MSNBC.com

DSNews.Com Default Servicing In Print and Online - Formerly REO Magazine

DSNews.Com Default Servicing In Print and Online - Formerly REO Magazine

foreclosure rates rising in florida - hurricane season could drive the rate of foreclosure higher.

MPR: Short-selling mortgages increasingly popular alternative to foreclosure

MPR: Short-selling mortgages increasingly popular alternative to foreclosure


by Mark Zdechlik, Minnesota Public Radio
June 7, 2007
Listen to feature audio

There has been a lot of reporting about the dramatic increase in home foreclosures as terms of certain types of mortgages become unmanageable for some homeowners in the current slow real estate market. A little known alternative to foreclosure called "short selling" is becoming a popular route out of home ownership in cases where the home is worth less than the debt against it.

Bloomington, Minn. — What would you do if you became unable to keep up with your house payments and your house was worth less than the balance on your mortgage? Those are the hopeless circumstances entangling an increasing number of people who are behind the dramatic increase in home foreclosures.

But there is another way out of an impossible mortgage. It's called "short-selling." The practice work this way: A homeowner sells the house for whatever the market will bear and, in exchange for an agreement to forgive the difference between the selling price and the amount owed on the mortgage, the lender gets the proceeds from the sale.
Larger view
Sold short

A Bloomington resident, Phil, who asked that his last name not be used because of the personal nature of his finances, short-sold his family's Bloomington house about two months ago. Phil had been laid off from his construction job. His adjustable rate mortgage payments nearly doubled. He couldn't keep up. His lender was foreclosing on his house.

"I thought my credit was going to be screwed for the rest of my life because of it," Phil said.

Then came along Bloomington-based real estate broker Phil Huston who proposed negotiating a short-sale with Phil and the homeowner's mortgage holder. They went ahead with it. The lender forgave the roughly $25,000 difference between the selling price of Phil's home and the nearly $200,000 balance on Phil's mortgage.

"As soon as I got the call that day that they were going to agree to the short-sale and the price that was offered (it) was just a huge burden off my shoulders," says Phil.
"We pretty much know what our loss is going to be if we foreclose. If a short sell results in a payoff that's a tad bit better or better than that number, we're taking all day long with the people that want to put a "short- sale" together."
- GMAC ResCap Foreclosure Prevention Director Steve Nelson

The Broker, Phil Huston, says he's been facilitating numerous short-sales.

"We've done it for years and years but only recently has it become very popular," Huston says.

In addition to brokers like himself identifying candidates for short-sales, lenders are promoting short-sales to stave off the significant costs associated with foreclosure. Short-selling allows lenders to get a bad loan off its books.

"Once a loan becomes delinquent, it becomes a non-performing loan," according to Huston. "One of the options is taking the property back, a better option for the lender is a short-sale where they take a hit on the loan but they get rid of the asset and they get rid of the non-performing mark on their portfolio."

In this market where home values generally are not increasing and, in some cases are decreasing, more and more people are becoming saddled with the dead-weight of a house that's worth less than what they owe on it. Many of them are not in a position to ride out the market downturn because their adjustable rate mortgage payments are becoming unmanageable.

With a portfolio of home loans valued at more than $400 billion Bloomington-based GMAC ResCap is among the nation's largest residential mortgage lenders. Steve Nelson is the director of foreclosure prevention there.

"I can tell you that the use of short-sales has probably increased three to four times from what we've done perhaps even a year ago," Nelson says. "It's probably being used more than I've ever seen and I've been in the mortgage business for 35 years."

Nelson says companies like GMAC ResCap want to avoid foreclosures because they're expensive.
Larger view
Phil Huston

"We pretty much know what our loss is going to be if we foreclose," Nelson says. "If a short-sell results in a payoff that's a tad bit better or better than that number, we're taking all day long with the people that want to put a short-sale together."

Realtor Lisa Proechel with Keller-Williams says she seen a big change in lenders' willingness to accept short-sales in recent months.

"It's just easier to negotiate with them," says Proechel. "They are always going to try to get the best price but I don't think they're quite as stubborn with sticking to what the mortgage is that's owed. They're looking a little bit more realistically and they're wanting to take an offer if they get an offer."

Proechel predicts lenders will become even more open to short-sales as they find themselves having to take back more and more homes in foreclosure.

"While it may seem with all the foreclosures out there that the bank wants to take people's property back, they really don't." Proechel says. "It's very expensive. They're not in the business of owning property. They're in the business of lending money and having interest on the property. And so they're more interested in being able to get rid of the property earlier rather than later."

But Proechel and others offer a warning. Lenders don't like losing money and won't even consider short-sells unless they're convinced it's the best option for them. In other words, if you have a good job and savings but just want to sell house to get out from under a depreciating house or a difficult mortgage, the bank's not likely to make a deal with you.

Real estate broker Phil Huston says while short sales are clearly a better alternative to foreclosure in some cases, going the short-sale route is by no means a sure bet.

"There's a lot that can go wrong," Huston cautions.

For a short-sale to work, according to Huston, you not only need to convince the lender that you're not in a position to keep up the mortgage, you must also attempt to prove that the selling price you can get, is the highest price the market will bear.

Ultimately, Huston says, the lender will make that decision. There's no prearranged agreement that they'll somehow just take whatever you're able to sell for.

"You're at the mercy of the lender," Huston says. "You're at the mercy of the expertise of the real estate agent making sure they're doing and saying the right things and packaging the right things and giving that to the lender. No, it's not a sure thing, but when it works, usually everybody is pretty happy about it."

And should the lender agree to a short-sale, whatever amount of money they write-off as their loss can be reported to the IRS as the seller's taxable income.

As for the lender, Steve Nelson the head of foreclosure prevention at GMAC ResCap, says he can't underscore enough the importance of contacting your mortgage company as well a counseling service as soon as you think you might be in trouble.

Nelson says "short-selling" may well be an a good option, but it is just one of several possible solutions.

"They've got to start a very diligent conversation with their servicer to find out, because nothing will happen on a short-sale unless the servicer agrees to the terms and conditions of it," he said

Phil and his family are confident their short-sale has brought them a second chance to own a home. They've just moved into another Bloomington house which they're renting now and hope to buy as soon as next year.

"I came out great and even renting a house they do a credit check," says Phil. "They saw it (the short-sell) on there, but it was paid in full so it was no problem."

It is possible to make it through a short-sale without damaging your credit. But, in most cases including Phil's, homeowners who get to the point of a short-sale already have late payments and the accompanying credit blemishes.

Still, a short-sale avoids a foreclosure which is second only to bankruptcy as the worst item to appear on your credit record.

Sunday, June 3, 2007

Sonoma Housing Bubble

The down side of flipping in the sacramento. Mosquitos breeding in the water features.


Sonoma Housing Bubble

You may ask why I post a horror story... It may help with the banks.