Florida Foreclosure Defense Lawyers Blog

If you live in Jacksonville and are under water on your mortgage -- i.e., your home is worth less than you owe on your mortgage -- you may be considering the option of stopping payments and allowing the bank to foreclose on your home (often called a strategic default). But not everyone wants a foreclosure; homes are a lifelong investment and often are attached to great memories and heavy sentiment. If you are behind on your payments, you have several options, all of which a qualified Jacksonville Foreclosure Attorney may be able to help you determine your options. Your options may include

Reinstatement. This means paying back everything you owe to the bank in order to become "current" on your payment. Unless you come into a large amount of cash relatively quickly, this option is likely not available to most people.

Workout. Some banks and mortgage companies know that foreclosing on a home means another empty house on their books. That is why they may be willing to negotiate a lower payment. There are several types of workouts: forbearance, loan modification, and partial claims.

Refinance.

Sell the home. Some buyers may wish to purchase a home as a short sale, and your mortgage company may be willing to accept the final funds from the sale in order to satisfy the mortgage.

Deed-in-lieu of foreclosure. This is where you give your home back to the mortgage company and simply walk away.

Bankruptcy. While this is not your first option, it can allow you to remain in your home in certain situations. Contact a Jacksonville Bankruptcy Attorney or Jacksonville Foreclosure Attorney to discuss how this option can benefit you.

Each option has its own benefits and disadvantages. One may be more beneficial to some people than others. Contact a Jacksonville Foreclosure Defense Attorney to talk about the options available to you.

There is a single fundamental action that must be done when faced with a foreclosure. Once served with a Summons and Complaint, you must file a response or an Answer to the Summons and Complaint within 20 days. The Complaint will and must state with specificity the nature of the action and what the Plaintiff (bank) is requesting.

Determining what to file and when to File an Answer in a foreclosure lawsuit is probably the most crucial step in a foreclosure lawsuit. There are several major benefits you cannot afford to miss out on. Once a response to your lawsuit is filed you will receive future notices of all future actions in the case. A properly written response can help to even the playing ground between the bank and yourself.

A lender bringing the foreclosure action certainly has multiple attorneys fighting for their interest and you should have an attorney reviewing your case and helping you fight to defend your rights and educate you on your options.

Contact a Florida Foreclosure Defense Lawyer or a Jacksonville Foreclosure Defense Lawyer to review your case and see that your foreclosure Summons and Complaint is properly answered and well drafted. A Florida Foreclosure Lawyer will also make sure that all other aspects of your foreclosure case is properly handled, giving you the best chance of coming out of the foreclosure with your head high above water. Complimentary initial consultation.

Townhome and condo prices in Jacksonville, Florida have fallen far quicker than prices for single family homes. According to the Northeast Florida Association of Realtors, townhomes and condos are currently selling for a median price of $67,000. That is 63% below the peak in July 2006 of $182,500. Compared to a current median price of $135,000 for single family homes which has only dropped 35% from the August 2006 peak of $210,000.

The dramatic difference in the drops of townhomes and condos compared to the drop of single family homes can be explained by the large amount of townhomes and condos built during the past decade and how quickly those prices increased, followed by a huge amount of foreclosures filed on them that put too many on the market at the same time. The problem gets worst with how difficult townhomes and condos are to sell. Many cannot be bought with a FHA mortgage or even a conventional loan. Since banks will not approve a loan in complexes with 50% percent renters, or associations fees not being paid on 15% of the units, most must be bought with cash. Buying with cash means even more renters because cash buyers are usually investors whom have excessive cash who buy the units with the intention of renting them out.

Prime examples are:
• A condo on Old Kings Road recently sold for $30,000. Four years ago it sold for $141,000.
• Off Southside on Belle Rive Blvd., a condo that sold for $165,000 five years ago went for less than $30,000.
• Two condos sold for 1/3 of what they were bought for a few years ago in the downtown Berkman Plaza.

This is just more bad news for some Jacksonville Homeowners, but there are alternatives to being "upside down." If you are currently "upside down" in your home, contact a Jacksonville Foreclosure Lawyer or a Florida Foreclosure Defense Lawyer today to see what options may be available to you.

Fair Issac Corporation (FICO) is a company that provides analytical services that assist financial companies in lending decisions. FICO has created a profile of individuals that strategically default on their residential mortgages. The mortgage industry has seen a large increase in homeowners that are walking away from their mortgage obligations although they have the ability to continue making payments. FICO says that it has developed a method, based on consumer behavior, that allows lenders to identify those borrowers that are strategic default risks. FICO claims that it has identified specific characteristics that make a borrower over 100 times more likely to strategically default.

In another turn in the settlement talks going on between federal regulators and the five largest mortgage servicers over foreclosure abuses including allegations of "robo-signing", the two sides are negotiating a potential "cash for keys" program for delinquent borrowers. The program would pay homeowners who are at least 90 days behind on their mortgage payments $1,000 to seek independent financial advice and up to $20,000 as a fresh start payment toward the costs of a new home.

The program would require homeowners to vacate their homes quickly and to leave them in good condition. Along with the "big 5" mortgage servicers, there has been talk that federal mortgage giants Fannie Mae and Freddie Mac would be included as a part of the new "cash for keys" program. Rumors coming out of the meeting stated that the proposal was "rejected strongly" by bank officials.

A federally mandated and servicer approved cash for keys program would be a major help for thousands if not millions of struggling homeowners. If you are facing a Florida Foreclosure Lawsuit, contact a Jacksonville Foreclosure Lawyer or a Florida Foreclosure Lawyer today to see what foreclosure alternatives may be available for you.

Bank of America, the nations largest servicer of home mortgages, has declared that it is against writing down the mortgage debt of borrowers whose home are underwater and who have defaulted on their mortgage loans. Federal agencies, along with Attorney General's from all 50 states, are making a sustained push for a settlement over the robo-signing scandal that arose in the fourth quarter of 2010. Experts estimate that more than $1 billion in mortgage debt is underwater and many want much of that debt to be included in any sort of settlement.

But Bank of America has voiced its opposition to that sort settlement. Bank of America CEO Brian T. Moynihan stated that "there's a core problem that if you start to help certain people and don't help other people, it's going to be very hard to explain the difference...our duty is to have a fair modification process." The head of Bank of America's Legacy Asset Servicing Terry Laughlin, whose department services delinquent mortgages or mortgage in default, voiced his fear that such a settlement would encourage borrowers current on their mortgages to intentionally default.

While Bank of America opposes writing down underwater mortgages, it continues to point to its "success" in modifying mortgages under HAMP, which appears to run counter to the most recent HAMP numbers. If you are facing a Florida Foreclosure Lawsuit from Bank of America, contact a Jacksonville Foreclosure Lawyer or a Florida Foreclosure Lawyer today to see what foreclosure alternatives may be available to you.

One stat that many may overlook when looking at the recently released census home ownership rate is the startling high vacancy rate for homes in the U.S. While a Jacksonville Foreclosure Lawyer has detailed the precipitous drop in the homeownership rates since the housing crisis began in 2007, the number of unoccupied homes is just as alarming.

According to the Census report, of the 131 million housing units in the U.S., only 112.5 million are occupied, either by owners or renters. That leaves 18.4 million vacant homes in the U.S., which amounts to over 11% of all U.S. homes being unoccupied! Industry experts fear that this number could rise even higher as builders re-start their building efforts.

To read the full Census Report click here.

Many homeowners who use foreclosure alternatives such as short sales or mortgage modifications in order to have a portion of their mortgage debt forgiven face the question "am I going to have to pay taxes on the amount of mortgage debt forgiven." In most instances that answer is no! The Mortgage Debt Relief Act of 2007 was enacted to help homeowners who were trying to escape toxic mortgages and the accompanying debt by not taxing the amounts forgiven as taxable income.

Homeowners who intend to claim the exemption must fill out Form 982 and attach it to their individual tax return in order to be eligible for the relief. Types of eligible debt are debts forgiven in connection with a foreclosure, debt forgiven due to a short sale as well as debt forgiven through a mortgage restructuring such as a HAMP modification. The Act was originally intended to only affect mortgage debt forgiven in 2007, 2008 and 2009 but was recently extended to include all forgiven mortgage debt through 2012!

If you are facing a Florida Foreclosure Lawsuit and want to explore foreclosure alternatives that may reduce your mortgage debt and take advantage of the extension of the Mortgage Debt Relief Act of 2007, contact a Jacksonville Foreclosure Lawyer or a Florida Foreclosure Lawyer today.

Today the Obama administration announced a broader mortgage relief program aimed at helping homeowners who are both current on their mortgage payments yet are at risk of default because they are "underwater" in their home values. The program, initially dubbed the "short refinance" program, lenders will write-down mortgage balances to 115% of the current market value of the home, then transfer the loans to the Federal Housing Authority. Official preliminary estimates are that 500,000 to 1.5 million homeowners could be benefited by the new program

According to the latest numbers from housing analysis firm CoreLogic, 23% of American homes, approximately 11 million, are "underwater" and at risk of default. One of the most persistent problems that has mired others modification programs is what do lenders do with second mortgages. The new program mandates that second liens be reduced so that the total mortgage debt is less than 115% of the home's current value. The government will make partial payments for banks to reduce those loans, but lenders have been unwilling to write down second mortgages that remain current.

Another potential stumbling block for the "short refinance" program is that lenders and mortgage servicers are still the ones in charge of the process and must be willing to write-down the values. Many mortgage servicers are already overwhelmed and an influx of new request for mortgage help, this time from homeowners who are current on their loans, may only exacerbate that problem.

If you are a Florida homeowner facing default or are considering a strategic default due to your home being underwater, contact a Jacksonville Foreclosure Defense Lawyer today to discuss your options.

As the numbers of Americans considering strategic defaults rises, more and more mortgage brokers are fielding calls asking about the possibility for "buy and bail" purchase. A "buy and bail" purchase is where a homeowner is considering a strategic default on their home, often due to an extreme drop in their home's value, purchases another home before they default on their current home. By completing a "buy and bail" purchase, a homeowner is able to get into another home, often at a steep discount due to low home values, before their credit rating is ruined because of the default.

Mortgage brokers are seeing an increase in "buy and bail" purchases even though Fannie Mae and Freddie Mac have attempted to set up standards to prevent it. The borrowers most likely to take advantage of buy and bail purchases are those with high credit scores and who have jumbo loans that fall outside of Fannie and Freddie funding limits. Many mortgage brokers ask about the potential for "buy and bail" purchases during the application process and if homeowners lie on their application, a "buy and bail" purchase constitutes fraud. While "buy and bail" purchases are becoming more popular, the FBI and other federal agencies are investigating allegations of "buy and bail" purchases aggressively.

If you are facing a Florida Foreclosure Lawsuit, there are foreclosure alternative options that may be available to you. Contact a Florida Foreclosure Lawyer today to review your case and options.

In a recent release by the analysts at Moody's Investors Service hypothesized that already depressed home prices could fall by an additional 20% if the U.S. economy slips back into recession. The Moody's research report stated, "the risk of a double dip recession is rising. We believe the odds of a near-term double dip recession have increased from nearly one in five this spring to closer to one in four."

The report warns that housing prices, expected to drop 5% before leveling off in early 2011, could fall by 20% before finally stabilizing in early 2012. Moody's analysts pin the hopes of preventing sliding home prices on the success of the Home Affordable Modification Program (HAMP). To date the HAMP program has not met the initial expectations of the Fed because many borrowers are too far behind for a mortgage modification to help. As we have detailed in our Florida Foreclosure Defense blog, the government has introduced several new revisions to HAMP, in an effort to make the program more beneficial for those homeowners.

In a recent study from the Federal Reserve Board has answered the question of "at what point do borrowers who can make their mortgage payment decide to stop making that payment?" This newly popular practice and its accompanying term, strategic default, have been one of the issues at the center of the current foreclosure crisis. The study found that a median borrower decides to strategically default when the amount they owe on their home exceeds the value of their home by 62%.

The Federal Reserve Board stated that in states where lenders do not have recourse to borrowers for deficiencies homeowners will strategically default when their homes are less underwater, while homeowners in states like Florida, where lenders do have recourse to pursue borrowers assets for deficiencies, don't strategically default until they are substantially underwater.

If your Florida home is underwater and you are considering strategic default there are other options to consider which may better serve your interests in the long term. Contact a Florida Foreclosure Lawyer today to discuss alternatives to strategic default, several of which may be able to save your home

A recent study done by Corelogic, a real estate analytics firm, found that the rich are defaulting on their loans at rate much higher than the middle and lower class. One in seven homeowners with loans exceeding one million dollars are seriously delinquent. The survey suggests that many of the rich are opting to strategically default on their properties as if it were a bad stock investment.

Fannie Mae and Freddie Mac, who hold most of the mortgages on home in America worth less than $500,000, are asking their homeowners to explore options other than strategically defaulting on their homes. The delinquency rate of second homes and investment homes, owned at a disproportionately higher rate by the rich, has risen to a 23% rate, while the rate for less expensive investment home is 10%. A Corelogic analyst expressed that those with high net worth are less concerned with any repercussions of strategically defaulting because they have other resources to lean on it they get in trouble and may be less susceptible to scare tactics employed by lenders.

If you are in a position where you are considering strategic default it is imperative that you contact a Florida Foreclosure Lawyer to review all the foreclosure alternatives available to you.

Many homeowners that are struggling financially are faced with very difficult financial decisions. Do I feed my family or pay my mortgage? Should I try to keep my small business afloat or pay my home mortgage? Do I pay my medical bills or pay my mortgage? In many cases there is no "right" answer to these questions. The homeowner must look at their own circumstances and determine what will be most beneficial for them in the long-term.

Increasingly homeowners are choosing strategic foreclosure as a way to pull themselves out of a dismal financial situation. When the lender commences foreclosure proceedings against a homeowner, the lender cannot accept any more mortgage payments from the homeowner while the case is pending. This allows the homeowner to save the amount that they pay on their mortgage every month. This can help homeowners solve other financial issues that they may be facing. Since many foreclosure proceedings last for over two years, a homeowner can save a substantial amount of money while they live rent free.

Homeowners can sometimes get positive results from strategic foreclosure. However, there are many potentially negative consequences to strategic foreclosure. The main consequences to any type of foreclosure are the hit to your credit score and the fact that you lose your home. If a homeowner does not follow the proper procedure when strategically foreclosing, the consequences can be much worse. If you are thinking of strategically foreclosing on your home it is imperative that you contact a Florida Foreclosure Lawyer or Jacksonville Foreclosure Defense Lawyer to discuss your options and if a strategic default may be a good option for you and your family.

A homeowner is "underwater" on their mortgage if they owe more on their mortgage than their home is worth. "Underwater" homeowners are much more likely to default on their mortgages, sometimes voluntarily. The average homeowner accepted into HAMP owes over $1.50 for every dollar that their home is worth. Even when these individuals have their mortgages modified, temporarily or permanently, they remain "underwater" on their mortgage. When a homeowner gets their monthly mortgage payment reduced they oftentimes are just paying less of the principal down, and with the rapidly declining real estate market they end up further "underwater."

Part of the reason that HAMP homeowners are more likely to be underwater is because of the Net Present Value (NPV) test that the lenders use to determine whether to foreclose or to modify. Under the NPV test the lenders chooses modification or foreclosure based on which route will make their investors more profit. Unfortunately this test leads the "underwater" homeowners towards loan modification and the homeowners that have equity in their homes to foreclosure.