Richard Zaretsky, Florida Real Estate Attorney

I have previously written about how attorneys can be great and how they can be bad in the field of helping distressed homeowners. Now the California Bar Association has published the preliminary results of an investigation into those attorneys supposedly offering services to help distressed homeowners in one of the hardest hit states.

Attorneys, especially real estate attorney, but also divorce and family law, criminal and commercial law practitioners have had a few dismal years. Finding a new niche appeared easy to some attorneys, especially with promises of "loan modification experts" telling them to just refer the business their way for a referral fee.

As stated in my previous blog articles, the problem is several fold. For one, attorneys to get this business were paying illegal referral fees to non-attorneys. Another is that they were practicing law in states without a license in that state. And yet another is that they were fronting for loan modification firms but not really doing any work for their "client". And the "client" actually was the loan modification firm and not the distressed homeowner.

In my practice, which includes extensive work on short sales and loan modifications as well as foreclosure defense (whatever that means), we have people coming in showing us examples of: Attorneys sending non-legal "salesmen" out to solicit business for a company that the attorney then gets a "legal fee" from; giving false information - I can't say it is "wrong" information because it just isn't; and attorneys offering "delays" as a solution to a distress homeowner - typically saying, "we will delay and delay (for which you will pay me a monthly fee) while you don't pay your mortgage (and stay in the house for free, or collect the rent from your tenant) and then when the bank finally gets through the delays we will offer to settle with them for a modification or whatever". Sound lilke a plan to you?

Distressed homeowners should seek help -- BUT: 1. Be realistic in expectations; 2. If it is too good to be true, it isn't. 3. If you are being pushed to sign up, DON'T! 4. Get recommendations and actually check them out!

Copyright 2009 Richard P. Zaretsky, Esq.

Be sure to contact your own attorney for your state laws, and always consult your own attorney on any legal decision you need to make. This article is for information purposes and is not specific advice to any one reader.

Richard Zaretsky, Esq., RICHARD P. ZARETSKY P.A. ATTORNEYS AT LAW, 1655 PALM BEACH LAKES BLVD, SUITE 900, WEST PALM BEACH, FLORIDA 33401, PHONE 561 689 6660 RPZ99@Florida-Counsel.com - FLORIDA BAR BOARD CERTIFIED IN REAL ESTATE LAW - We assist Brokers and Sellers with Short Sales and Modifications and Consult with Brokers and Sellers Nationwide! Shortsales@Florida-Counsel.com New Website www.Florida-Counsel.com. See our easy to find articles at TABLE OF CONTENTS - SHORT SALE AND LOAN MODIFICATION ARTICLES.

In March I wrote about the problems tenants faced when the landlord was in foreclosure. See TENANT RIGHTS AND FORECLOSURE - A DISCUSSION OF SAFEGUARDS. Some, but not all, issues have been addressed in new legislation that went into effect May 20, 2009 called the Protecting Tenants at Foreclosure Act of 2009 (note: it is Title VII in this link). There is still the advance rent and security deposit issue as the ACT does not address how the tenant can protect itself from the loss of those monies.

New new Act is very broad and effectively covers every residential mortgage in every state. It does NOT apply to tenancies that are not "bona fide" - and that definition is also very broad. For example, if you are in foreclosure and the tenant is your child, the Act will NOT apply.

The key is when was the lease entered into - was it before or was it after the foreclosure was filed? If it was before the lease was signed, then it takes precedence over the mortgage foreclosure and the tenant cannot be evicted because fo the foreclosure - provided the tenant does not breach the lease. The ONLY exception is if the buyer is purchasing the property as its PRIMARY RESIDENCE, in which event the 90 days.

If the lease was after the foreclosure, then the tenant can be evicted 90 days after notice to vacate is given by the NEW owner after the foreclosure sale. In essence, any lender must give any bona fide tenant 90 days to vacate the premises AFTER the lender or any other buyer at a foreclosure sale acquires title to the property. Of course some state tenant laws still apply, for example, if the prior Landlord (the foreclosed owner) had given a notice to vacate prior to the foreclosure sale occuring (because of a tenant breach) in which event that notice start date would remain applicable.

The HUD explanation is simple regarding the notice to vacate:

(1) The advance notice applies to tenants in any foreclosed dwelling or residential real property, regardless of the type of loan or other security interest on the property.

(2) An advance notice of 90 days is the minimum period of notification. A longer period may be provided, for example, if greater protections are provided by state or local law.

(3) Responsibility for providing the advance notice to tenants falls on the immediate successor in interest of the property, which will generally be the purchaser.

(4) The notice must be given to anyone who, as of the date of the notice of foreclosure, is a bona fide tenant, whether or not there is a lease.

A detailed analysis of the Act is found at: PROTECTING TENANTS AT FORECLOSURE: NOTICE OF RESPONSIBILITIES PLACED ON IMMEDIATE SUCCESSORS IN INTEREST PURSUANT TO FORECLOSURE OF RESIDENTIAL PROPERTY.

Remember that during the remaining term of the lease or the 90 days notice period, the terms of the lease still apply - the tenant obligations to maintain the premises, pay rent, etc. must still be adhered to by the tenant or they can be sued and evicted by the new owner! This new law is NOT a free ticket for tenants!!!!

It is important to recognize that the new law is only a starting point - STATE LAWS that provide greater protections are still in place and will override the new federal law. I would also note that if the lease term was finished before or during the 90 day period, the lease term is NOT extended by this law and normal state remedies for holdover tenancy would be in effect.

MISSING SECURITY AND ADVANCE RENT PROTECTION FOR TENANTS -

The ACT does not provide any monetary protections that I spoke about in my previous article and therefore the game plan in that article still applies. The problem is that most tenants gave to the original landlord last month's rent and a security deposit. The new owner has no responsibility to the tenant for those monies!! So what to do - see my suggestions in TENANT RIGHTS AND FORECLOSURE - A DISCUSSION OF SAFEGUARDS.

There can be other more imaginative ways to proceed - but remember that because the old landlord that lost the house isn't the owner anymore does not mean that you get a free 90 day pass to live in the house (althought that is how it is likely to pan out for new owners). The new owner can sue the tenant for unpaid rent for the 90 days. That leaves the tenant in a conumdrum of how to recover the deposit and advance rent and that is why participation in the foreclosure suit with a request to the court to deposit monies to the court registry is going to be the best legal route a tenant can take to demand and get fair treatment regarding its financial obligations. My suggestion is to get involved as a tenant in the foreclosure suit when served with the foreclosure summons and complaint. You may want to seek the advice of an attorney in your State when doing so.

Copyright 2009 Richard P. Zaretsky, Esq.

Be sure to contact your own attorney for your state laws, and always consult your own attorney on any legal decision you need to make. This article is for information purposes and is not specific advice to any one reader.

Richard Zaretsky, Esq., RICHARD P. ZARETSKY P.A. ATTORNEYS AT LAW, 1655 PALM BEACH LAKES BLVD, SUITE 900, WEST PALM BEACH, FLORIDA 33401, PHONE 561 689 6660 RPZ99@Florida-Counsel.com - FLORIDA BAR BOARD CERTIFIED IN REAL ESTATE LAW - We assist Brokers and Sellers with Short Sales and Modifications and Consult with Brokers and Sellers Nationwide! Shortsales@Florida-Counsel.com New Website www.Florida-Counsel.com. See our easy to find articles at TABLE OF CONTENTS - SHORT SALE AND LOAN MODIFICATION ARTICLES.

In the preceding blog article I addressed the issues when a borrower waits until they get before a judge to determine that they may want an attorney to represent them. Foreclosure is NOT a Remedy deals with the issues when a borrower has been served with a foreclosure complaint (sometimes mistakenly called a "lis pendens") and more than the time allowed for a response to be filed with the court has come and gone, and no attorney is involved on the borrower's behalf to pursue any available defenses to the foreclosure proceeding. But don't lose sight of the caveat that the borrower should always be looking for alternatives to foreclosure.

These articles discuss:

1. "I have a hearing next week before the judge to tell him my story."

2. "I was served with a foreclosure complaint (lis pendens) months ago".

3. "What does this ‘Final Judgment of Foreclosure' mean?".

This article addresses the 2^nd item on the list - I was served with a foreclosure complaint - months ago.

The time to see an attorney is ideally when the borrower realizes that a financial distress problem is likely on the horizon. As for delaying that meeting - it all depends on what threshold events are occurring or have already occurred. Planning and defenses can take time to put into effect or to create, and alternatives to foreclosure take time to establish and put into effect. Any block of time taken off the timeline by procrastination or delay can create a loss of the ability to use that alternative or raise a particular defense to the foreclosure.

The Initial Response

The first thing to realize when you get a foreclosure (lis pendens) complaint served upon the homeowner is that it MUST be responded to within the time stated on the Summons - usually 20 days from the date it was handed to you or posted on your door. Sometimes service is accomplished by "Notice of Action" publication and special rules apply to that type of "substituted" service of process. A "must read" to understand this process is A LAWYER'S EXPLANATION OF THE FORECLOSURE PROCESS.

The Type of Response - Motion to Dismiss / Answer / Affirmative Defenses

The type of response depends on the strategy of the borrower. If there are defects in the complaint then a Motion to Dismiss should be filed. Failure to file a Motion to Dismiss can be a waiver of the defects in the complaint. Defenses should not be confused with defects. Defenses can be pleaded in the Answer as Affirmative Defenses. Failure to plead Affirmative Defenses are waived if not plead. There are specific time restrictions when a defect or defense can be plead (filed). An untimely motion or defense will not be allowed by the court, even if it has merit. For a discussion on the effect of defenses, see FORECLOSURE DEFENSE FALLACY for what may or may not be a valid usable defense.

The Foreclosure Complaint Motion for Default

The key event if the borrower has not responded to the Complaint in a timely manner is whether or not the lender's attorneys have filed a Motion for Default against the borrower. The granting (sometimes by the Clerk of Court instead of the Judge) of a Motion for Default or Entry of Default, prevents the borrower from filing any responsive or defensive pleading for the rest of the case! A default can be set aside by the Judge, but only in certain situations for good cause and it is completely within the Judge's discretion.

The Amended Response

What happens when the borrower filed a letter or some other inadequate pleading in response to the Complaint before retaining us? If we can show that there are likely viable defects in the Complaint or arguable defenses to the Complaint, usually the Judge will allow an amended Answer and the filing of amended or first time defenses. Less seldom is a Motion to Dismiss allowed, unless we can show that the Motion raises good grounds for a jurisdictional defect or significant inadequacy in the Complaint.

After the initial pleadings the case will usually proceed to a Motion for Summary Judgment. This was discussed in the previous article Foreclosure? When is the Best Time to See an Attorney? (click on this link).

Foreclosure is NOT a Remedy

During this process the borrower should be pursing other remedies. Our policy is that Foreclosure is NOT a Solution. That is why I just didn't use the term "alternative remedies". Foreclosure is NOT a REMEDY for the borrower - it is a RESULT of unfortunate events.

Copyright 2009 Richard P. Zaretsky, Esq.

Be sure to contact your own attorney for your state laws, and always consult your own attorney on any legal decision you need to make. This article is for information purposes and is not specific advice to any one reader.

Richard Zaretsky, Esq., RICHARD P. ZARETSKY P.A. ATTORNEYS AT LAW, 1655 PALM BEACH LAKES BLVD, SUITE 900, WEST PALM BEACH, FLORIDA 33401, PHONE 561 689 6660 RPZ99@Florida-Counsel.com - FLORIDA BAR BOARD CERTIFIED IN REAL ESTATE LAW - We assist Brokers and Sellers with Short Sales and Modifications and Consult with Brokers and Sellers Nationwide! Shortsales@Florida-Counsel.com New Website www.Florida-Counsel.com. See our easy to find articles at TABLE OF CONTENTS - SHORT SALE AND LOAN MODIFICATION ARTICLES.

First in a series:

My law practice encompasses assisting and guiding many borrowers that are in financial distress and we take the position that Foreclosure is NOT a Solution. Most borrowers come into the office for guidance and if they are lucky, planning for solution options once they realize that financial distress is a likely scenario. However there is a significant trend this third quarter of the year where we are seeing many more people coming to us with foreclosure suits that were filed many months ago, and now it may be too late to discuss all of the solutions that may have been available to the borrower had they come into the office for a consultation before or at least at the beginning of the process. Unfortunately, some lender representatives encourage their borrower to NOT seek the advice of an attorney or have attorney representation for a short sale or loan modification process - and the borrower often listens to that clearly self-serving advice.

These late comers fall into 3 categories:

1. "I have a hearing next week before the judge to tell him my story."
2. "I was served with a foreclosure complaint (lis pendens) 4 months ago".
3. "What does this ‘Final Judgment of Foreclosure' mean?"

This article will address the first category.

"At the hearing I am going to tell the Judge my story."

I am amazed at the number of borrowers that call or come in and tell me that they have a time to speak to the judge in just a few days. They are usually under the impression that this is a meeting, or maybe a hearing, where they can tell their story to the judge of how the lender promised them a loan modification. Usually part of their story is that the lender also told them to not pay their mortgage for 60 or 90 or more days (see SHOULD I PAY MY MORTGAGE?) and now they have a foreclosure pending.

These people usually also have no clue that they are going into what is 99% of the time, the one and only time they will have the opportunity to see the judge in their foreclosure proceeding. What they also do not realize is that this hearing is NOT an opportunity to present evidence to the judge.

The hearing is almost always a Motion for Summary Judgment. This type of motion allows the judge to only look at the existing court file and consider (a) the legal pleadings (the complaint, exhibits and testimony such as a deposition) that are in the court file. Often there are rules (depending upon the state your case is filed in) that require and limit the consideration of the judge to papers that made it into the court file a certain minimum number of days before the hearing. In Florida, the Lender must have their side of the file complete 20 days before the hearing (see MOTION FOR SUMMARY JUDGMENT OF FORECLOSURE - DEFEATED! AND HOW I DID IT ). NO TESTIMONY is taken at these hearings, which means the court cannot listen and consider any testimony of facts at this hearing - all it can do is see what is in the court file and then listen to argument from the lender and borrower based on and limited to what is in the court file. (A corporate lender needs an attorney but an individual borrower doesn't and can appear without one).

So, the client "telling my story" concept usually does not end up helping the borrower, and frankly, coming in to my office at such as late stage will probably result in my tuning away the potential client unless it is clear that there is some benefit that my representation will possibly bestow upon the potential client

When a person comes into the office and they show me a piece of paper that says that they already had their day before the judge (whether or not they went to the hearing does not matter) and it is a Final Summary Judgment of Foreclosure, it usually is too late to bring into discussion most of the alternative solutions that would have been available if the client came to me months earlier. Now all that is available are fast solutions - a short sale for example, but at a price that will move the property within the next two weeks. The problem is that the low price may not be conducive to the lender approving a sale at that price. In the meantime, the clock is ticking on the date for the foreclosure sale to occur. That date will be stated in the Final Summary Judgment of Foreclosure. We have certainly been successful in getting the foreclosure sale delayed. [Right now I am fighting to further extend a sale from occurring because the lender is actively determining if a short sale contract that was submitted to them 4 months ago at their suggested price is in fact acceptable - the original foreclosure sale was to have occurred 4 months ago.] However, a borrower should proceed with caution such that it is an uphill battle to have a lender cancel an already scheduled foreclosure sale and delaying it is something that cannot be relied upon. Chances are about the same as an amateur playing Roulette.

The sooner a borrower seeks help, the more solutions that may be available. One thing should remain clear - Foreclosure is NOT a solution - it is a result that often times can be avoided.

Copyright 2009 Richard P. Zaretsky, Esq.

Be sure to contact your own attorney for your state laws, and always consult your own attorney on any legal decision you need to make. This article is for information purposes and is not specific advice to any one reader.

Richard Zaretsky, Esq., RICHARD P. ZARETSKY P.A. ATTORNEYS AT LAW, 1655 PALM BEACH LAKES BLVD, SUITE 900, WEST PALM BEACH, FLORIDA 33401, PHONE 561 689 6660 RPZ99@Florida-Counsel.com - FLORIDA BAR BOARD CERTIFIED IN REAL ESTATE LAW - We assist Brokers and Sellers with Short Sales and Modifications and Consult with Brokers and Sellers Nationwide! Shortsales@Florida-Counsel.com New Website www.Florida-Counsel.com. See our easy to find articles at TABLE OF CONTENTS - SHORT SALE AND LOAN MODIFICATION ARTICLES.

Richard Zaretsky's Short Sale and Modification Blog Articles

A Periodic Listing of Articles by Richard P. Zaretsky, Esq.

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Be sure to contact your own attorney for your state laws, and always consult your own attorney on any legal decision you need to make. This article is for information purposes and is not specific advice to any one reader.

Richard Zaretsky, Esq., RICHARD P. ZARETSKY P.A. ATTORNEYS AT LAW, 1655 PALM BEACH LAKES BLVD, SUITE 900, WEST PALM BEACH, FLORIDA 33401, PHONE 561 689 6660 RPZ99@Florida-Counsel.com - FLORIDA BAR BOARD CERTIFIED IN REAL ESTATE LAW - We assist Brokers and Sellers with Short Sales and Modifications and Consult with Brokers and Sellers Nationwide! Shortsales@Florida-Counsel.com New Website www.Florida-Counsel.com

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WHEN A BUYER BROKER CHANGES THE MLS LISTING PRICE - A FLIP SCENARIO CAUGHT

This week a real estate broker came in to retain me on a complaint filed by a buyer on a flip and it is important enough to understand why the Department of Professional Regulation is going to prosecute this broker.

SHORT SALE LENDER CANNOT REDUCE COMMISSION TO BROKER One of the great drawbacks to a broker taking on a short sale listing is the fear and often the reality that the short sale lender will demand a reduction in the broker commissions. This has created all sorts of contraptions to make the broker whole.

MORTGAGE FRAUD and SELLER FRAUD = WE PAY THE BILL

Does anyone in Versailles have any decency? Two years ago a potential client working as a mailroom clerk for 35 years - came into my office regarding a mortgage modification. He and his wife each made $35,000 annually and he purchased a new Versailles Wellington Florida home costing $1,400,000 for his family and in-laws to live in. He already had a home in Miami with a $170,000 mortgage that he wanted to keep. The 100% financing mortgage was a 1.4% pay-rate negative amortization and had no escrows.

DISTRESSED HOMEOWNERS DEFRAUDED BY ATTORNEYS - EXPOSED IN CALIFORNIA

I have previously written about how attorneys can be great and how they can be bad in the field of helping distressed homeowners. Now the California Bar Association has published the preliminary results of an investigation into those attorneys supposedly offering services to help distressed homeowners in one of the hardest hit states

TENANT PROTECTION LAW AND FORECLOSURE PROBLEMS

In March I wrote about the problems tenants faced when the landlord was in foreclosure. See TENANT RIGHTS AND FORECLOSURE - A DISCUSSION OF SAFEGUARDS. Some, but not all, issues have been addressed in new legislation that went into effect May 20, 2009 called the Protecting Tenants at Foreclosure Act of 2009. There is still the advance rent and security deposit issue as the ACT does not address how the tenant can protect itself from the loss of those monies.

Foreclosure is NOT a Remedy - 2nd in a Series

In the preceding blog article I addressed the issues when a borrower waits until they get before a judge to determine that they may want an attorney to represent them. Foreclosure is NOT a Remedy deals with the issues when a borrower has been served with a foreclosure complaint (sometimes mistakenly called a "lis pendens") and more than the time allowed for a response to be filed with the court has come and gone, and no attorney is involved on the borrower's behalf to pursue any available defenses to the foreclosure proceeding. But don't lose sight of the caveat that the borrower should always be looking for alternatives to foreclosure.

Foreclosure? When is the Best Time to See an Attorney?

First in a series:My law practice encompasses assisting and guiding many borrowers that are in financial distress and we take the position that Foreclosure is NOT a Solution. Most borrowers come into the office for guidance and if they are lucky, planning for solution options once they realize that financial distress is a likely scenario. However there is a significant trend this third quarter of the year where we are seeing many more people coming to us with foreclosure suits that were filed many months ago, and now it may be too late to discuss all of the solutions that may have been available to the borrower had they come into the office for a consultation before or at least at the beginning of the process.

LOAN AUDITS - FORECLOSURE DEFENSE FALLACY?

The concepts of foreclosure defense preparation have started a cottage industry, unregulated as with most of the home saving concepts, called "loan audits".

WALK AWAY FROM THE PROPERTY - STRATEGIC MORTGAGE DEFAULTS GROW TO 26%

A mortgaged homeowner is likely to "walk from the property" or "give it back to the bank" based more on loss of equity than the ability to make the mortgage payments, a recent research paper emanating from the University of Chicago says. The paper researches and analyzes when American homeowners are likely to "walk away from their mortgages" These actions by mortgaged homeowners when the indebtedness substantially exceeds the equity value of the property, is called a "strategic default". The study found that 26% of all homeowner defaults today are strategic defaults.

SHOULD I PAY MY MORTGAGE?

This seems to be THE NUMBER ONE question I get. Unfortunately there are several answers and which is correct for you depends on the Circumstances. I will address the common scenarios in this article.

Your Property is Underwater - What is the solution?

The Distressed Property Owner's "Goal" is an interesting situation for each individual and for each individual experiencing this event, it is different. I like to help my client visualize creating a solution or "goal" by telling a visualization story.

SHORT SALE FLIPS - TITLE INSURANCE PROHIBITED

The short sale flip apparently is alive and well for some investors - and it is causing havoc with title insurance underwriters. Now the title insurance underwriters are making their case simply by declaring that they won't insure such transactions.

BUYING A FORECLOSURE - DUE DILIGENCE AND STATUS OF TITLE

More and more I have been receiving telephone calls and emails wanting me to discuss issues relating to buyer foreclosures and short sales and REO properties. Everyone (both qualified but usually unqualified) seems is writing or buying books on the process, so I figured it may be time to put in my two cents and talk about title issues and due diligence

MOTION FOR SUMMARY JUDGMENT OF FORECLOSURE - DEFEATED! AND HOW I DID IT

Today I used a new technical defense to successfully defeat a motion for summary judgment for foreclosure and I wanted to pass it on to other attorneys (or those who know attorneys) helping homeowners in foreclosure.

SHORT SALE BUYER CANCELLED CONTRACT EPIDEMIC - DIAGNOSIS AND CURE

This past week my office had 5 short sale buyer's walk from their contracts! Although I use an exclamation mark, it is not an unusual occurrence. In fact it seems that it takes 4 contact buyers to make a short sale finally happen. If that was an average for a traditional sale situation, Realtors and title agencies would be climbing the walls.

MORTGAGE FORECLOSURE RESCUE - THE BAD GUYS DON'T WEAR BLACK!

In last week's New York Times an article focuses on how Home Savers Consulting is accused of committing fraud and profited handsomely at the expense of the former homeowner. Worse, the former homeowner thought she still owned the home - she did not.

FORECLOSURE RESCUE AND MORTGAGE MODIFICATION FRAUD - ALERT ISSUED

This week the Florida Bar made public the outlandish and misleading representations that have recently plagued the mortgage modification industry in this state and probably nationwide. The mortgage modification industry has sprung up faster than mushrooms - mostly through mortgage brokers that have seen their ability to make loans dry up in this recession and are applying net office sales techniques to the mortgage modification boom. The problem is that many states have enacted new laws to put them out of business.

SHORT SALES PRIMER - BACK TO BASICS UPDATED

Short Sale Primer For Brokers, Sellers and Buyers - A Primer -

Since I wrote the Short Sale Primer the short sale methodology used by lenders has morphed several times. It is a different animal than it was almost 10 months ago. The passage of time requires that the original article, which was very popular (thank you) be revised to reflect new policies by the lenders. I have also added several pertinent links to more detailed discussions on the various subjects in this article.

SHORT SALE AND FIRPTA TAX WITHHOLDING - IRS ISSUES PRIVATE GUIDANCE

Back around Christmas, 2008 I co-authored a blog with Miami tax attorney Shawn Wolf, Esq. on the issue of a FIRPTA transaction coupled with a short sale. The analysis showed that there were no specific IRS regulations and no rulings regarding a short sale transaction that was subject to FIRPTA. See FIRPTA and SHORT SALES - DANGEROUS LIABILITY TO BUYER AND CLOSING AGENT.

Last month a communication came through from the IRS that confirmed the conclusion made in that article. I am providing to you the question that was posed to the IRS and the answer received from the IRS for those of you that meet this type of situation

TENANT RIGHTS AND FORECLOSURE - A DISCUSSION OF SAFEGUARDS

The unintended victims of the foreclosure process are often the occupant of the home that is a tenant. The landlord is a borrower under a mortgage that has gone into default and is now being foreclosed. What is going to happen to the tenant as a result of the foreclosure? How can a tenant or future tenant be protected from the ill effects of a foreclosure? This article will attempt to address these issues.

MORTGAGE MODIFICATIONS TEND TO FAIL

Here is an interesting article from the Washington Post that describes the difficultiy many homeowners have with modified mortgages.

LENDER SHORT SALE ACCEPTANCE LETTER EXAMPLES - READ WITH CAUTION!

What is a short sale? When giving lectures I like to use the definition as follows: The sale of a real estate property for a price that is less than the total amount necessary to fully satisfy the actual present encumbrance (mortgage) indebtedness on the real estate property. Often I see a different description, one that says, The sale of real estate when the lender accepts less than its mortgage amount and forgives borrower from paying the deficiency.

MULTIPLE SHORT SALE CONTRACTS AND HOW TO AVOID THEM

Why does it take 3.8 contracts to sell a short sale property? Why do Realtors insist on spinning their wheels and getting nowhere selling short sale properties?

FORECLOSURE DEFICIENCY JUDGMENT or SHORT SALE PROMISSORY NOTE or BANKRUPTCY - REVISITED

Whether to agree to a negotiated promissory note in a short sale or allow the house to go to foreclosure is one of the most discussed topics around. It deserves a simple comparison

FLORIDA REAL ESTATE MARKET CONDITIONS RELEASED TODAY

Today one of the state's largest title insurance underwriters release its 2009 Real Estate Forecast and Southeast Florida focus. To those of us that live here it is no surprise that the numbers are grim. To those outside of Florida the numbers are shocking! The report, issued by Attorneys Title Insurance Fund, makes several projections and findings.

FIRPTA and SHORT SALES - DANGEROUS LIABILITY TO BUYER AND CLOSING AGENT

It is critical for Realtors, Buyers, Closing Agents and Lenders to understand the important issues of the short sale when applied to the Internal Revenue Code's Foreign Investment in Real Property Tax Act of 1980 or FIRPTA transaction because disregard for following the FIRPTA rules will make the Buyer and Closing Agent and possibly the Lender liable to the IRS for the Seller's Tax Liability!!!!! The problem is that right now there is NO RULE by the Internal Revenue Service ("IRS") for FIRPTA Short Sales.

Hope For Homeowners Act a Failure

I have many desperate homeowners coming to my office begging for ways to save their homes. Often times the homeowners qualify under the published criteria for the hyped Hope For Homeowners program also called H4H by the FHA. The program, passed by Congress in July 2008 was to save the homes of 400,000 homeowners. So far only 300 or so have applied! Why?

A LAWYER'S EXPLANATION OF THE FORECLOSURE PROCESS

As an attorney I often consult with homeowners that are in distress along with the Realtors that represent them in trying to accomplish a short sale. Often a detailed explanation of the foreclosure process would be very worth while for my client to have a thorough understanding of what they may be facing as the lender seeks to enforce the promissory note and mortgage. We usually don't have enough time to explain the process in full, so here is an article that should help non-lawyers understand what is happening according to rules of procedure in the court system and what options lenders have for enforcing the money they loaned to the homeowner.

IS THE FORECLOSURE FINAL? - AND HOW DOES IT AFFECT MARKETING A SHORT SALE?

As an attorney involved in the procedure of foreclosures and short sales I have been asked this question an increasing number of times - which tells me the legal process is confusing when it comes to the full run of the foreclosure process. So this article will set it out from way in the beginning to the very end and hopefully it will answer your question.

WHAT'S WRONG WITH THE FAR SHORT SALE LISTING AND CONTRACT ADDENDA - AND HOW YOU CAN FIX IT

The Florida Association of Realtors took the lead in making some semblance of consistency, order, and standardized forms for use by Realtors for Short Sale transactions. I doubt many Sellers or brokers realize the draconian conditions of the documents they are using. If you are among them, this article may open your eyes. Because the evolution of Short Sales in 2007 and 2008 has been so dramatic, the forms became problematic at the outset.

FORECLOSURE DEFENSE FALLACY

If you are a listing Realtor or a person who has just gotten foreclosure notice from your lender(s), no doubt you have heard about a myriad of "Foreclosure Defense" firms that promise to delay or prevent foreclosure or even prevent the enforcement of the mortgage because if irregularities in the loan. What in fact are foreclosure defenses?

SHORT SALE DEFICIENCY DEMANDS AND DEFENSES - The Interstate Highway Analogy

"What chance is there that the bank is going to make me pay the difference (or deficiency) when we are through?" This is the most often asked question I get as an attorney that specializes in residential mortgage loan workouts and (avoiding foreclosure through short sales or modification). If you need basic information to understand the short sale and deficiency issue, see Back to Basics - a Review on Short Sales.

BAILOUT BOGDOWN

It is only 3 weeks since the new bailout programs "started" but don't ask for any testimonials from any homeowner whose home has been saved.

BANK REJECTS SHORT SALE OPPORTUNITY AND MAKES BIGGER LOSS

Here is more proof that the loss mitigators used by some banks just don't quite "get it". In an article this morning in the Palm Beach Post, by staff writer Eve Samples, Wells Fargo is targeted for its botched handling of a short sale opportunity, resulting in a loss to the bank of at least $40,000 more than it would have experienced in the short sale opportunity.

BAILOUT MISREPRESENTATIONS AND MISCONCEPTIONS

The government bail out of the housing crisis has created wonderfully conceived programs to keep homeowners in their homes with re-negotiated mortgages or refinanced mortgages. The specific programs for the home saving legislation are the HOPE for Homeowners (H4H) and FHASecure programs.

I THOUGHT IT OUTRAGEOUS THAT ANYBODY HAS TO STEP IN TO BAIL OUT A BUNCH OF 29 YEAR OLDS DRIVING MASERATIS

Sometimes you get a frank speaking knowledgable person that sums up the day's thought succintly and in one sentence. Speaking on the Financial Crisis, legenday investor Jim Rogers, in an interview reported on CNBC this morning said the irresponsible people need to go bankrupt if necessary. Here is the quote - you'll love it since it is So True!

ARE WE IN SHUT DOWN MODE?

The stock market is at equivalent lows to times dating back to the Great Depression (which for those of you needed date measurements is almost 75 years ago).

TOP TEN LIST OF SHORT SALE OBSERVATIONS

For all you short sale Realtors - Here is my list of the top ten short sale rules when dealing with sellers and buyers. What is your top ten list for YOUR favorite category involved in the short sale process (lender, buyer, seller, buyer Realtor, Seller Realtor, processor, loss mitigator and servicing agent, etc.)?

YOUR Ticket to Normalcy? THE BAILOUT BILL

The Emergency Economic Stabilization Act just passed on October 3rd is not the cure-all you might hope for. The Act authorizes the creation or expansion of governmental entities and departments to deal with the housing crisis. Implimenting these provision is what will create the "cures". Assuming the "cures" are in place, there are going to be effects upon Realtors, Mortgage Brokers and Distressed Homeowners. This is how I see the Act helping each group.

EMERGENCY ECONOMIC STABILIZATION ACT - WHAT IT MEANS FOR YOU

My wife asked a very important question this morning - so what does this new Act do for the housing market?

NUTSHELL VERSION - EMERGENCY ECONOMIC STABILIZATION ACT

The BIG news this week is the passage on Friday of the Emergency Economic Stabilization Act of 2008 - or more formally called "Secure Rural Schools and Community Self-Determination Act of 2000". Yes, that is how it started and it is known as H.R. 1424. What it says will change our economic horizon for decades and this article will discuss its major imports for the real estate buyer and seller and homeowners.

BAILOUT FOR HOMEOWNERS - WITHOUT WALL STREET

149 years ago today, Abraham Lincoln stated an important fact for today's financial crisis. But first a word of hope. It is human to think that when times are good, they will stay good. And when times are bad we all hope for good times. King Solomon went on a quest to find one item that would remind him to realize that good times or bad times, neither is permanent and to be prepared for the other. He found a ring imprinted with the saying, "this too shall pass".

FLORIDA FORECLOSURE FRAUD BILL - UPDATE

Government can react positively when enough people raise their voice - and the law is clearly against public policy. This post updates my article on the Florida Foreclosure Fraud Bill

Second Mortgage Short Sale - Holding Up the Railroad Loot

The Second Mortgage Dilemma can ruin your short sale - Like the old West, the stagecoach holding the railroad's payroll was always getting held up by the bad guys - at least in the movies. Has much changed in the Wild West environment of short sales and the fight between primary and secondary mortgage holders?

BANKS CREATE BILLIONS (MORE) IN LOSSES -

Short Sale Buyers are increasingly investors seeking to buy and flip or buy and rent for positive cash flow. Missing from the field are homebuyers seeking a place to live. Why?

Foreclosure Deficiency Judgment Compared to Deed In Lieu and Short Sale Scenarios -

Basic Primer - the Mechanics of a Mortgage Foreclosure Deficiency Judgment Compared to Deed In Lieu and Short Sale Scenarios - We get so many questions about having a "deficiency judgment" entered and how it differs from other possibilities in a deed in lieu of foreclosure or short sale, that a refresher article seems appropriate for Activerain. If you are unsure of what a Short Sale is, then first read the Back to Basics - a Review on Short Sales

Back to Basics - a Review of Short Sales

Short Sale Primer - Back Room Lender Decisions - Short sales are nothing new. When I represented a national lender for all of their foreclosures in the State of Florida several years ago, we negotiated "loan workouts" which are now called "short sales". Since they have been around so long, I did some digging with my old pals that were the executives I worked with in the loan workout and REO department of this national lender (the lender has since been merged into Bank of America).

THE BANK CHANGED THE LOCKS! -

There is discussion on Active Rain from time to time on whether in a short sale it is advisable to move out of the house. The real issue is the clause in the mortgage that says the bank can change the locks on the house if it is "abandoned".

A-T-T-O-R-N-E-Y Spells T-R-O-U-B-L-E in Short Sale -

Sad Facts about Attorney Misconduct in a Short Sale

FLORIDA FORECLOSURE FRAUD BILL - MY LETTER TO GOV. CRIST

See UPDATE to this blog and how it was resolved - at FLORIDA FORECLOSURE FRAUD BILL - UPDATE

SHORT SELLER STILL MUST DECLARE INCOME ON SALE! -

The Mystery of income you can't spend - but do you have to declare it? When DON'T you have to report forgiven debt (from a short sale, deed in lieu or foreclosure with release from the lender) as income?

CALLING ALL ETHICAL LOAN OFFICERS - HELLO? ANYONE THERE?

CREDIT REPORTING AND SHORT SALES / FORECLOSURES - REVISITED -

I received an email on my quest to find the real answers to the incessant question of how a foreclosure vs. short sale vs. deed in lieu all affect the credit report of the borrower.

1099 REPORTING - IT'S THE LAW! - OR IS IT??? -

1099 SHORT SALE REPORTING - IT'S THE LAW! - OR IS IT??? Since I have developed my SHORT SALE law practice I have a lot of clients that are in foreclosure or close to it. They all ask me about 1099 reporting and if the bank can forgive the debt and not issue a 1099. Now let's see what the law really says.

DIVORCE - CHAINS TO THE UPSIDE DOWN HOUSE VALUE CAN BE BROKEN!!! -

Chained to your home and can't get a divorce? You are not alone!

SHORT SALE FLIP - QUESTIONABLE METHODS -

SHORT SALE FLIP - QUESTIONABLE METHODS - This article is a follow up to an issue discussed in December titled Short Sales and Title Insurance - Critical Look at Hybrid Closing Schemes.

FORECLOSURE DEFICIENCY ORDER VS SHORT SALE NEGOTIATED PAYBACK -

I was negotiating on a very large problem mortgage today with a high-up executive at the servicing firm. He made a comment that I thought peculiar and I called him to task on the matter. The comment was that "after the foreclosure sale, lenders seldom bother to get a court ordered deficiency judgment". I knew this to be false, because lenders today - more than in the past - are investing a few hundred more in attorney fees to get a deficiency judgment. I will tell you why.

REAL QUESTIONS - HOW DOES A SHORT SALE AFFECT CREDIT SCORES???

In a discussion today with a client we addressed the question of credit scores and short sales. This is a hot topic and there is information everywhere on what happens and when and for how long.

FORM RELEASED BY IRS FOR DEBT RELIEF ACT FILING -

New IRS Form for Filing for Debt Relief

No-Conflict Considerations in Short Sale Fees

As short sales and pre-foreclosure assistance servicers proliferate, the type, style and amount of fees that these individuals and companies charge has become ingenious and varied. This article discusses the rights and wrongs regarding the most popular of the charging methods.

TOO MUCH MONEY IN THE BANK TO DO A SHORT SALE? - ECONOMIC LOGIC -

This week I spoke with several people that wanted to do a short sale of investment property that is upside down in value. They are sick and tired of the short fall on rental income (if they are lucky to have a renter that actually pays rent) vs the mortgage payment, taxes, insurance and maintenance costs.

Who Says Owner Doesn't Have Time To Do a Short Sale? -

Some writers to my blogs have commented that "they don't have time to do a short sale".

WHAT DO I DO? -- I'M UNABLE TO PAY MY MORTGAGE -

As an attorney, I receive plenty of telephone calls and visits from people that are no longer able to pay their mortgage on their home or investment property. They all have endless questions and usually tell me they are getting all sorts of advice that they don't like. They come to me to find their BEST solution.

SHORT SALE TRILOGY -

It is really amazing how many people - professionals as well as potential sellers - do not even know what the term "short sale" means. This blog assumes you have actually worked a short sale already -- if you have -- or if you are curious -- read on!

Mortgage Forgiveness Debt Relief Act of 2007- Another Look -

I have been getting a lot of calls and emails about the Mortgage Forgiveness Debt Relief Act of 2007. The new law became effective today, and applies to 1099's on short sales or foreclosures retroactive to January 1, 2007.

MORTGAGE RELIEF ACT - CHRISTMAS PRESENT TO PRIMARY HOMEOWNERS -

On Thursday the President signed into law - effective New Years Day, the Mortgage Forgiveness Debt Relief Act of 2007.

Underwater - The Cycle Repeats Itself -

I cannot be surprised at the stories in the newspapers about homeowners, investors and even commercial property owners being "Underwater" with today's depressed real estate market values. Many people that own real estate today were just pre-teens when the last deep cycle occurred. Or if they are older, they were not in the real estate market at that previous time.

Short Sales and Title Insurance - Critical Look at Hybrid Closing Schemes -

Recently I have seen various schemes for streamlining the short sale process for the buyer/investor. Some discussions have been somewhat heated and involved concepts like dual contracts or even insolvent borrower creating a Land Trust for use by the investor/buyer. At best, the agreement amongst the blog commentors has been to agree to disagree.

WHO CONTROLS THE SHORT SALE? -

In this environment of the short sale it seems apparent that the bank controls the sale. Some might say the buyer controls the sale. My opinion is that both statements are primarily incorrect. The seller owns the house. The seller must sign the contract. The seller must sign the deed.

TAX DEEDS - COURT DEVELOPMENTS NIX SALE! -

Tax Deed purchases are popular in many states as a way to acquire real estate at truly rock bottom prices. Generally a tax deed purchase is first in line after just a few significant "super" lienholders: (1) God, and (2) Code Enforcement Liens. Practically all others having an interest in the property are wiped out in a tax deed sale.

LOW BALL SHORT SALES - PLAYING THE ODDS? -

Short Sales are the buyer road to riches - if you believe the promo advertising that is all over the place. But the road is not a short one nor is it a smooth one. It is best covered with professional help and guidance.

BORROWERS FACING FORECLOSURE OFTEN OVERPAY - STUDY FINDS

Is our system of foreclosure out of control? Are the banks acting fiduciarily to their borrowers in the loan management process - are they requred to?

Beware the White Knight! -

Apparently there are lots of "White Knight Claims" being made against title insurance policies. Here are some of the fact patterns:

SHORT SALES AND IRS LIENS -

In my law practice we see a lot of short sales. Indeed, we offer a service to Realtors and Sellers to process their short sale material with the lenders (without the downward pressure and lowball influence from an investor handling the process). I have worked statewide with lenders - visiting their loss mitigation departments and sitting in on committee meetings. Knowing the process is key knowledge to improving the percent of short sale lender approval.

TRUE STORY - Renter forges deed, then conspires to sell house and pocket mortgage proceeds -

It is a day past Halloween, but here is a scary TRUE story

Some Sellers Think They Are ENTITLED To A SHORT SALE -

I had just too many borrowers that "should have known better" in the office this week - so I feel very conservative just now.

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Copyright 2007, 2008 and 2009, Richard P. Zaretsky, Esq.