Monday, October 15, 2012

List of Foreclosure Alternatives in Florida: Borrower's Options to Foreclosure on Their Florida Home (or Condo)

Want to find a way to avoid a foreclosure here in Florida?  After all, this month RealtyTrac released its quarterly report to reveal that Florida was number one in the country in foreclosures, and Broward County had the highest number of foreclosures in the state.  Which makes Broward County the place with the highest number of foreclosures on file in the entire United States.  

Good news: you're not alone if you are pondering options and alternatives to foreclosure here in Florida.  More good news:  you probably have more than one choice rather than setting back and letting the bank take your home.

There's no need to roll the dice and see what happens.  You may have more control than you think. 

What are your foreclosure alternatives?  There's no one right answer here, no one size fits all solution to the problem of being behind on mortgage payments, or being underwater on your mortgage, or getting that notice of default. Your options may not be the same as the choices facing your Broward County neighbor or your cousin over in Fort Lauderdale or your aunt in Tampa. 

However, there are lots of ways to deal with the situation other than avoiding the whole mess with your head in the sand.  Here are a few -- and for details on what these are, or what they may mean to your foreclosure problem, please read our analysis at About Florida Law:

Foreclosure Alternatives in Florida

This is a list of foreclosure alternatives for Florida home owners and Florida borrowers who are facing the possibility of losing their home or condo to foreclosure in 2012 or beyond.  This is not a complete list.  For more information, please check the pros and cons discussed on our legal blog post, or just call us and ask for a free consultation. 

1.  Qualify for the Making Home Affordable Program. (MHA)

2. Qualify for the Home Affordable Modification Program. (HAMP)

3. Qualify for the Principal Reduction Alternative Program. (PRA)

4. Qualify for the Home Affordable Refinance Program. (HARP)

5. Qualify for the Home Affordable Unemployment Program. (UP)

6. Qualify for the Forebearance for Unemployed Homeowners Program. (FUP)

7. Qualify for the Home Affordable Foreclosure Alternatives Program (HAFA)

8. Bring the Mortgage Current (Reinstate the Mortgage)

 9. Make a New Deal by Negotiating a Bank Loan Modification with the Lender (Modify)

10. Refinance with a New Lender (Refi)

11. Rent Out The Place (Cover the Mortgage with the Rent)

12. Short Sale the Home (Sell Short - Leaving a Deficiency Balance)

13. Challenge the Bank Legally (Sue Them)

14. File Affirmative Defenses When They Sue You / Foreclose (Assert Legal Defenses)

15.  Negotiate a Deed in Lieu of Foreclosure

16.  Negotiate a Forebearance or Repayment Plan (Catch Up)

17.  File Bankruptcy

Image: Wikimedia Commons, Public Domain Image

Thursday, October 11, 2012

Florida Short Sale Fever: Race to Short Sale Before New Year's Eve 2012 and 1099s Start Coming

Short sales can be very, very good for Florida home owners who are facing possible foreclosure by their bank.  A short sale can keep a borrower out of foreclosure lawsuit, for one thing.

Short Sales - How They Can Help You 

Here are some big benefits to a Florida short sale:
  1. A short sale is better for your credit than a foreclosure. You take a hit, but it's not as hard and it doesn't last as long. 
  2. If you have a GSE mortgage (Federal agency backs the note, like Freddie Mac or Fannie Mae), then a short sale may mean you can buy another house in as short as 2 years. 
  3. Lenders are much more open to short sales in 2012 than ever before. Bank of America is really pushing short sales in Fall 2012. 

Short Sales - How They Can Hurt You (Especially After 12/31/12)

Short sales aren't the answer for everyone.  They are "short" by definition, and you have to pay the bank the remaining amount due on the note or negotiate a write-off.   You can be sued even after escaping the foreclosure lawsuit for that deficiency amount unless some law protects you from it (like some GSE regulations).  

Additionally, unless Congress acts, you will have to pay federal income tax on any deficiency amount that is written off by the bank.  Beginning January 1, 2013, unless the federal law is extended ("the Mortgage Debt Relief Act of 2007"), the exemption to deficiencies being considered income will expire by its own terms. 

Which means the time to try and get that short sale done is now, in Fall 2012.

For more information, check out our legal blog About Florida Law on the topic of Short Sales or call us for a free consultation.