Category: Florida Real Estate

The Window is Closing on Orlando Short Sales!

Posted on by Jenny Zamora

The Mortgage Debt Relief Act of 2007 is set to expire

The tax-relief provisions enacted by Congress during the housing crisis to help financially strapped homeowners is about to come to an end. This is the 2007 law that allows taxpayers to exclude from income the amount of debt that is forgiven or canceled by their lender. The good news is that if your considering an Orlando Short Sale,  there is still time to take advantage of this very important law.

Although the law doesn’t officially expire until Dec 31, 2012, anyone considering a short sale should get started now. We’ve had short sale files in our office that have taken up to two years to complete. It’s true that banks are moving Florida short sales along much faster now but overall they still move pretty slow.

I’m not saying that people who are struggling to hold onto their Orlando homes should throw in the towel solely because of the pending tax bite, but it is certainly something to consider.

According to the law, borrowed money doesn’t need not be reported as income because you have an obligation to repay. But if your lender subsequently cancels what you owe, the IRS requires that you report that debt as income because the duty to repay it no longer exists. So, if you owe $350,000 and your lender forgives $50,000 of that debt in a $300,000 refinancing, that $50,000 is considered income. If your combined federal and state marginal tax rate is 36 percent, you would owe $18,000 in taxes. Ouch!!!

However, under the Mortgage Forgiveness Debt Relief Act of 2007, taxpayers are allowed to exclude from income the discharge of debt on their principal residence when they do a short sale— at least until 2013.

This means that when your lender agrees to a short sale, there is no tax on the difference between the selling price and the amount you owe. When your lender forecloses, there is no tax on the canceled debt. Even when you refinance at a lower loan balance, there is no tax on the difference between what you owed on the old loan and what you now owe on the new one.

Unless Congress extends the law, [and there is no indication lawmakers are even thinking about that] all residential mortgage debt relief that takes place on or after Jan. 1, 2013, will once again be considered taxable income.

If you are on the fence about doing a short sale on your house, consult with a short sale expert and get informed about your options.

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Orlando Short Sales Overtaking Foreclosure Sales

Posted on by Jenny Zamora
 For the first time Orlando short sales are becoming more popular than sales out of foreclosure.  As a matter of fact, in Florida short sales have outnumbered bank-owned home sales since July.
 
Lenders are favoring short sales more and more these days, with good reason. Short sales have proven to be faster and more lucrative process than foreclosure. Short sales accounted for 24 percent of all home sales nationwide while foreclosure sales represented 20 percent.
   

Top 3 reasons why lenders favor short sales over foreclosure sales

 
•    Taking a home to foreclosure is a long, drawn out process and can take up to a couple of years sometimes. Even then, there are soo many things that can go wrong if things aren’t processed correctly by the attorneys, which happens more often than you would think.
 •    Lenders can avoid paying a ton of money in legal fees. You can’t foreclose on a home without attorneys. I’ve seen attorney’s charge as high as $15,000.00 for  1 single foreclosure case.
 •    Better sales prices on Orlando properties. Statistics show that banks get higher and better offers when they short sale as opposed to the foreclosure sale. Many times it won’t even sell at the auction and it ultimately becomes the banks problem…Again!
 
In the end it’s all about the almighty dollar.
 
Lenders are finally realizing that Orlando short sales are a win for everybody. Mortgage companies are even offering large cash incentives to homeowners who agree to do a short sale. I’ve gotten some of my clients up to $20,000.00 back at closing from their lender. How’s that for a bailout plan?
 

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Butterfly Destroys the Roof on an Orlando Property! Would Your Homeowners Policy cover This?

Posted on by Jenny Zamora

Orlando Homeowners Insurance Policies are getting cut left and right

Citizens Insurance is a Non-Profit state-run insurance company started in 2002 because of the fact that private insurance companies were leaving Florida due to the risk of hurricanes.
It used to be that when nobody else would cover your Orlando home or business, you could always go to citizens for a policy.  So when citizens sent out a letter to their policy holders late last year informing them that they would no longer be covering carports, screen rooms, patios, pool cages or awnings- expensive items to get fixed – many people were alarmed…Including me.
Even Florida based home insurance companies that we thought were Florida’s future are selectively cancelling policies in higher risk zip codes.

Here are the hard facts

  • State Farm is planning on cancelling 125,000 Home owners policies in addition to the policies they’ve already cancelled
  • Nationwide is dropping an additional 60,000 home owners policies
  • The number of people that report  that Homeowners insurance is too expensive is increasing by the day.
  • Newly formed home insurance companies just can’t keep up with all the policies being cancelled by the larger companies
  • It’s harder than ever for Floridians to find quality Homeowners Insurance at a reasonable rate.
  • Both Citizens and the Florida Hurricane catastrophe fund have reported their concerns about not having the cash needed to pay for a major Florida Hurricane.

Get involved Floridians!
As tax payers and voters, we can make a difference by getting involved. Let’s keep the pressure on the Florida legislative representative to make something happen that would bring more Insurance companies to Florida and keep are rates affordable.

Let  your FL Legislator know how you feel!

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Orlando Homeowners Have all the Power!

Posted on by Jenny Zamora

We all know how thousands of Orlando homeowners have suffered through this foreclosure crisis since 2007.  There is another group of individuals that is also feeling the effects of all this…Lenders.

The truth is, banks have taken an extensive beating over the last few years and the effects are starting to show. Lenders don’t have many options when it comes to managing Orlando foreclosure properties. Even the usual process of foreclosure has been anything but reliable.

Orlando Homeowners have all the power.

A homeowner with the right strategy can stay in their home for over three years without making a single mortgage payment. I know this for a fact because several of my clients are in this situation.
Fact: It actually costs the lender less money to let the homeowner stay for free and maintaining the property than it does to evict the homeowner and pay to have the property maintained.

Don’t freak out, go see an Orlando Realty professional

I just cringe every time someone comes in to see us and they tell me that they moved out of there house because they fell behind on their mortgage and they thought that the “Big Bad Bank” was coming to kick them out. Unfortunately, most of the time it’s too late to do anything about it because they’ve already turned the key into the bank and moved into a new lease.
It kills me because if they would’ve just come in to see us when everything first happened, they could’ve saved tens of thousands of dollars and lots of stress.

That’s not the way it works!

Here are 3 things that you absolutely need to know if you’ve fallen behind on your mortgage.
1-    Don’t stop talking to your lender! As a matter of fact, call them often and tell them what’s happening with you. Ignoring the situation is the worst thing you can do!
2-    Even if the bank begins foreclosure proceedings, they have to inform you well in advance [in writing] of hearing dates, sale dates, etc. They can’t just kick you out from one day to the next.
3-    Talk to an Orlando Real Estate Expert. It’s free to speak with a top Orlando Realtor and an experienced agent will be able to inform you of all your options and help you come up with the perfect plan for you.

One thing is for sure, there has never been a better time in history to do an Orlando short sale than right now. There are so many homeowners facing foreclosure right now that banks are having to negotiate better and better deals.
We’ve gotten our clients anywhere from $3,000.00 to over $20,000.00 back from the lender depending on what program we‘re able to qualify them for.

Still have questions? Ask me anything, I’m here to help

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Orlando Short Sales Increasing because of Financial Incentives

Posted on by Jenny Zamora

Banks are finally starting to come to the realization that it’s much cheaper to pay off delinquent borrowers as an incentive to short sale their Orlando house than it is to take them through the foreclosure process. I think it’s about time they saw the bigger picture.

Bank of America as well as a few others are currently testing incentives from $5,000-$25,000 here in Florida to see if they should be expanded to more states.  JP Morgan Chase went national with incentives of up to $35,000, and Wells Fargo’s incentive ranges from $3,000-$20,000. If that’s not incentive then I don’t know what is.

These incentives are saving lenders big money compared with the expenses involved in completing a foreclosure. In Florida, where foreclosures go thru the courts, 50% of loans in foreclosure are more than two years past due. No one knows how long they will keep offering these incentives or what determines which sellers will qualify.  You can have two similar sellers, and one might receive the incentive and the other may not receive it.

One thing is for sure though, if you’re looking to do an Orlando short sale, right now is the best time to short sale your house. Never before in history have banks ever been so cooperative and generous to borrowers who have fallen behind on their mortgage.

Here’s more good news… You don’t have to pay the mortgage while the short sale process is happening.  That’s right you stay in the house for free until the short sale is complete.

If you’re considering an Orlando Short Sale on your house,  contact us for a free consultation with one of our short sale specialists and find out exactly where you stand. You’ll be glad you did.

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