Tag: Florida short sales

Orlando short sale vs. Deed in Lieu

Posted on by Jenny Zamora

 

A deed in lieu/ foreclosure with a smile

By now just about everyone living in Orlando has heard of terms such as “short sale” , “deed in lieu”, loan modification, etc. It’s important to know exactly what the difference is between these terms are and what the implications are. For  example; many  homeowners believe that a deed in lieu is  the same as doing a short sale.  This couldn’t be further than the truth. A deed in lieu is simply put is a foreclosure with a smile on it’s face or a “voluntary foreclosure”.

An overlooked downside to a deed in lieu of foreclosure is the possible forgiveness of the deficiency balance. Under federal law, a creditor is required to file a 1099C whenever it forgives a loan balance greater than $600. This may create a tax liability for the former property owner because it is considered “income.” However, the Mortgage Forgiveness Debt Relief Act of 2007 provides tax relief for some loans forgiven in 2007 through 2012.

The key issue in a deed in lieu of foreclosure is whether the lender is willing to forgive the deficiency balance. Make sure to read the contract carefully to see how the deficiency balance issue is handled. If the document is unclear, take it to an experienced Orlando real estate attorney with experience in property law. An attorney’s time is not cheap, but will be a bargain compared to signing an agreement you do not understand and are surprised later to realize its implications.

 

Consider Doing an Orlando Short Sale Instead of a deed in lieu

I’ve had a countless number of Orlando homeowners over the years come into my office asking me to explain the difference between a deed in lieu and a short sale. By doing an Orlando short sale the lender agrees to accept less than the balance owed on the mortgage at sale. The deficiency balance may be forgiven and you also may qualify for a “Cash for Keys” program which means that by doing a short sale, your lender may give you a cash incentive [between 3- 30 thousand dollars] . On the other hand a deed in lieu of foreclosure is basically a voluntary foreclosure n which you sign the deed over to the lender and walk away. However, a foreclosure, unlike a deed in lieu of foreclosure, the ownership of the property is not transferred to the mortgage holder, and remains with the owner.

The lesson here is if you are considering either a deed in lieu of foreclosure or a short sale you must review the terms and conditions carefully and make certain you understand whether the deficiency balance is forgiven. This is why it’s absolutely crucial to consult with an Orlando Real Estate expertwhen making such an important decision.

Lenders prefer short sales over taking a property to foreclosure because they don’t want to own distressed properties. They would much rather see the owner sell the property and lose the deficiency balance than be forced to take the property through foreclosure, as foreclosure is a costly and time-consuming process.

Another reason to consider a Orlando short sale over a foreclosure is that Foreclosure auctions tend to bring significantly less money than a normal sale would bring. If the sale brings less than the amount owed on the loan, the remaining balance of the loan is called a deficiency balance. This means that you could end up with a deficiency judgment against you for the balance.

If you still have questions about Orlando short sales, come see us for a free consultation. We’ve been specializing in Florida short sales and our team of Certified Distressed Property Experts are up  to date on the latest laws and regulations when it comes to Orlando real estate ensuring that our clients get the best options available to them.

 

Jenny Zamora, Lic.  RE  Broker, CDPE

 

 

 

Orlando short sale expert

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Lenders Forcing Homeowners to purposely default on Orlando Real Estate

Posted on by Jenny Zamora

Financial Hardship is not the only reason why Orlando homeowners are not paying their mortgage

Strategic Default is when a homeowner decides to stop paying their mortgage, not necessarily because they can’t afford it, but because it’s a bad investment not worth paying into anymore. Even if the consequence means to possibly lose their house to foreclosure and damage their credit.

Orlando homeowners have been purposely defaulting on their mortgages for several years now. When people become aware of the reality of their situation, they make a conscious decision to stop paying their mortgage. In most cases, I can’t say that I blame them. Don’t get me wrong, I would never tell a client to stop paying on their mortgage. However, I do tell my clients what their house will sell for and about how long it will take to sell and they do the rest of the math on their own.
Although Orlando real estate is making a steady recovery and I believe will continue to do so. There are Orlando homeowners that will never get the money back that they’ve put into their property.

Strategic default  Vs. Moral Obligation

Some Orlando homeowners are worried about their moral obligation to pay the mortgage. The truth is that the homeowner entered into an arms-length transaction with their lender in which both parties had competing interests thus spelling out their obligations in a clear, signed contract. Unless the contract states that the homeowner has a “moral obligation to pay,” then it’s plain and simple – they don’t.
Here are the facts;  when a homeowner borrows the money to buy an Orlando property, they have entered into a business transaction. The lender evaluated the risks and concluded that it was a risk worth taking. For its protection, the lender also required that the homeowner put the property up as collateral, as well as any equity that they had in the house.
The contract spelled out that if the homeowner doesn’t pay, the lender has the right to take the property and sell it before the homeowner gets any equity back – if there were any equity left, which of course in these cases, there isn’t. The lender would not have approved the loan if they didn’t think it was a smart business decision. The homeowners choice to enter into this agreement was also a business decision.
It’s now obvious, that both the homeowner as well as the lender made a bad decision. Now, the contract spells out what happens if the homeowner stops paying, the lender gets the property.

However, there are other options available to homeowners like doing an Orlando short sale or a loan modification. In my opinion, most loan modifications that get approved just don’t make financial sense unless they reduce the principle balance of the loan.

Strategic default is actually something that is caused by the lenders. The fact is, lenders won’t even consider entertaining a short sale unless a homeowner is behind their mortgage thus forcing the homeowner stop paying the mortgage.


By doing a short sale, the homeowner is able to get their house sold and walk away from the responsibilities of the mortgage. Also, there are now several “cash for keys” programs available where lenders offer substantial cash incentives for doing a short sale, sometimes up to $30,000.00 depending on what kind of loan they have and who the lender is.


Your value as a person is not determined by the value of your real estate, or how much money you owe to a bank.  You are worth more as an individual than your bank will ever understand. Life is too short, and there are so many things more important than an underwater mortgage. For many Orlando homeowners, it’s literally the difference between happiness and depression.


If you’re in a situation where you need to do an Orlando short sale on your house go speak with an Orlando short sale expert and find a solution, you owe it to yourself and your family.

 

 

Jenny Zamora, Lic Re Broker/ Orlando Short sale Expert

Orlando short sale expert

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A typical work day for an Orlando Short Sale Specialist

Posted on by Jenny Zamora

It’s all in a day’s work for an Orlando Short Sale Realtor

Being a successful Orlando short sale realtor involves many things. For one thing, working with a short sale listing is a lot more work than a traditional listing. Listing the property is just the tip of the ice burg. There’s a mountain of paperwork involved that needs to be updated every 30 days, so I guess the correct term would be “mountains” of paperwork because short sales can take several months to complete and sometimes even up to a year, depending on the lender.

Daily checklist for a Top Orlando Short Sale Agent

1- Check emails- These days most realtors and most negotiators prefer to communicate by email and when you are handling upwards of 100 short sale files, this means hundreds of emails to read. [Daily] 2- Follow up with the short sale lenders over the phone- This is a very tedious task and can take several hours of your day, but it is a necessary evil when it comes to processing short sales. It’s not uncommon to spend up to 45 minutes on one file just trying to get the right person on the other end of the phone to see how the file is moving along. 3- Check on approaching foreclosure sale dates with the Orange County Courthouse- It’s always good to ask the short sale rep about pending auction dates. However, a lot of times there is a communication breakdown between the lenders, lawyers and the courthouse and unfortunately, that’s just the way it is. This is why at Orlando Realty Consultants we have someone that is in charge of calling the Orange and Osceola county court houses and finding out what the latest information is on each and every case. Many times we inform the lenders of an approaching sale date before they even know about it. 4- Creating accurate CMA’s- With the ever changing Orlando Real Estate market, it’s extremely important to make sure that the properties are priced correctly in order to ensure success with a short sale. Pricing the property too high or too low will only drag things out and can sometimes push the bank to just flat out refuse entertaining a short sale. 5- Scheduling the BPO’s- The BPO [Brokers Price Opinion] is a very important part of the short sale process. The BPO is almost always performed by a local realtor. Whatever the BPO comes in at is the point of negotiation between us and the lender. 6- Negotiating with HOA dues and other 2nd lien holders– It used to be easy to get an Home Owners Association to accept a massive discount on what’s owed on a client’s delinquent dues. Not any more! HOA’s are now notorious for being difficult to negotiate with. We’ve had countless cases where closings have been delayed because of waiting on the HOA’s to send us a simple payoff letter, Even for a full payoff. 7- Coordinating Closings- Having a great title company helps a lot. However there are still many things that fall on the short sale realtor such as scheduling inspections and making sure that everything runs smoothly with all parties involved on both the buyer’s and seller’s side. 8- Update our Short Sale Clients- To us, this is one of the most important things on the to do list. Here at Orlando Realty Consultants, we understand that our short sale clients are going through a tremendous amount of financial and emotional stress because of their situation. This is why we keep our clients informed about everything every step of the way. The more you know about something then the less you will fear it or stress out about it, that’s just human nature. Our clients depend on us to help them through one of the most important processes of their lives and this is something that we take very serious. Well, there you have it folks, a peak into the day of an Orlando Short Sale Expert.   If you need help with an Orlando Short Sale or just some free advice from an Orlando Real Estate Expert, contact us, we’re here to help. Jenny Zamora, Lic RE Broker
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“Florida Hardest Hit” program makes Qualifying for foreclosure prevention easier than ever

Posted on by Jenny Zamora

 

“Florida Hardest Hit” program is helping Orlando homeowners in a big way.

 

Florida Hardest Hit is part of a federal initiative to help states devastated by the housing crash. Last week state housing officials announced changes to a $1 billion foreclosure prevention program that will make it easier for qualified homeowners to get more money.  As an Orlando Realtor this makes me happy because although not everyone will qualify for this program, it will be a savior for many Orlando homeowners.

The program offers money to cover mortgage payments for homeowners who are unemployed or in jobs with salaries below what they need for basic living expenses. Funds also are used to bring delinquent mortgages current for people who have returned to work or found higher-paying jobs.

One of the major new changes to the program is that homeowners that apply to Florida’s Hardest Hit Fund don’t have to be at least 180 days late on their mortgage to get qualified. Also, it will no longer be a requirement that loans have to be originated on or before Jan 1, 2009 and If you were formerly denied by the program you will now be able to reapply.

Keep in mind that these changes must be approved by the U.S. Treasury and likely won’t be effective for at least six to eight weeks.
One of the proposed changes is that unemployed homeowners can receive as much as $24,000 back to pay their mortgage over 1 year. Right now it stands at $12,000 which is a huge difference. Orlando homeowners also may be eligible for as much as $18,000 to bring past-due mortgages current. Although the program only began in April 2011, homeowners are already complaining that the Hardest Hit requirements were too restrictive.

 

Florida Hardest Hit has helped more than 5,540 homeowners statewide.

 

“Florida Hardest Hit” current qualifications for an eligible Orlando homeowner:

 

*Must be a Florida resident

*Must occupy property as primary residence (the property cannot be vacant, abandoned or rented)

*Borrower/co-borrower must be unemployed or underemployed through no fault of his/her own, which makes the first mortgage unaffordable

*Must have documented total household income at or below 140% of the area median income (AMI), adjusted for household size

*Must have an active checking/savings account that can be debited by the ACH method of funds transfer

*May not have unencumbered assets of $5,000 or more, or three times the current monthly mortgage payment (whichever is greater)

*Cannot have a bankruptcy that has not been discharged or dismissed

*Cannot have been convicted of a mortgage-related felony in the last 10 years.

To learn more about the program, contact an Orlando Realty Expert 

 

Ask me anything, I’m here to help.

Orlando Real Estate Broker

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2012… Year of the Orlando Short Sale

Posted on by Jenny Zamora

Will 2012 be the Year of the Orlando Short Sale? 

Since mid-2006, residential values in Florida have declined by 51 percent. Hundreds of thousands of properties have been, or are, in foreclosure and huge numbers of homes have been repossessed. Check out these numbers for the state of Florida.
• 150,000 residential properties in Florida have been repossessed, and are now REO’s.
• 371,000 foreclosure cases are open in courts today.
• 530,000 residential mortgage loans are at least 90 days past due and in default.
•265,000 homeowners have not made a mortgage payment in more than two years.
•1 million residences are in some form “distressed,” whether in foreclosure, owned by banks or in default.
• 46 percent of mortgages are “under water” … in other words, the debt exceeds the current market value of the residential property.
809,… this is the average number of days to process a foreclosure in Florida — It’s easy to understand why Orlando short sales have become so popular with both lenders and sellers, because are the best option for both parties and they create positive movements in the total market.
Will 2012 be the Year of the Orlando Short Sale? I think so, I also think that 2013 might be an even stronger Year of the Short Sale in Orlando because of the volume of pending foreclosures.

There was a group of 150 people that consisted of analysts, lawyers, bankers, real estate agents and developers who attended a forum that more lenders are warming to short sales. They all agreed that distressed homeowners are overcoming their psychological hurdles and coming to terms with the financial implications of an Orlando short sale.

Although, the impacts of Orlando foreclosures and short sales and the fear of more to come are still a threat and prevent value appreciation from returning to its previous levels, there are still some positive signs of growth in the market.

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