Orlando Homeowners Get A Lifeline

I’ve been a real estate broker in Orlando for the past 16 years and in that time I’ve never seen the economy come to a screeching halt like this before. Not even when the market crashed back in 2008 and the market was suddenly flooded with Orlando short sale properties that weren’t selling.

This pandemic is a different kind of disaster that has nothing to do with unethical mortgage companies or homeowners living well above their means. This is a situation that took us all by surprise and is out of our control as homeowners. Luckily, there is help out there for homeowners who are currently in financial trouble.

Orlando homeowners who’ve lost their job because of COVID-19 are getting some help with their mortgage. Depending on the situation they’re in, they should be eligible to have their mortgage payments suspended or reduced for anywhere between 3 and 12 months.

Our Federal directors, with the help of Freddie Mac and Fannie Mae, are instructing lenders to help homeowners out by offering flexibility. This would cover about 50% of all the home loans in the U.S. [loans that are guaranteed by Freddie and Fannie]. Regulators believe, however, that the mortgage industry adopts a similar policy with their customers.

Under this new plan, homeowners who lost their income could qualify for reduced payments or a pause to the payments altogether. This forbearance can be for up to 12 months depending on the homeowner’s situation.

Homeowners should not just stop paying their mortgage without contacting their mortgage company. Doing this will surely damage their credit. Their lender will work with them to at least suspend 3 months of payments right off the bat without any penalties and without reporting it to any credit bureau. They will do this with verbal testimony without any supporting documentation because of the coronavirus outbreak.

Within the 3 months, they should work with you to come up with a payment plan and may ask you for some proof of hardship to determine what your best options would be to get back on track.

COVID-19 mortgage help is not FREE MONEY!

You must know that help with your mortgage due to COVID-19 doesn’t mean free money. All homeowners will have to work out a repayment plan once they are back on track financially. This could also be simply extending the term of the loan.

Some may even have to repay the entire amount when the 90 days are up, depending on the banks’ criteria as well as the homeowner’s financial situation.

I believe this was a great 1st step by lenders. Could you imagine the mass panic throughout the US if, all of a sudden, homeowners couldn’t continue to make payments and all the lenders began foreclosure proceedings?!

There’s already enough stress about trying to not get the virus and keeping our loved ones safe and healthy that people should not have to worry about losing their homes.

Contact your mortgage lender

Homeowners needing help should reach out to their servicer immediately and find out what their options are. Explain to them that you are having financial problems because of the virus outbreak and request to be put into a forbearance program.

Some of the largest mortgage lenders in the country, like Wells Fargo and Chase, are also working to help homeowners who have been financially hurt by the coronavirus. These lenders have the responsibility to follow through on what our government directed them to do.

Mortgage companies have also been told to pause all foreclosure proceedings as well, although anyone in foreclosure right now would have had to be in trouble before the coronavirus even started spreading in the U.S. I believe this was more of a public health move than anything else.

Can a mortgage forbearance end up as a short sale?

Once a mortgage forbearance agreement has come to an end, there is still a chance that you don’t like the terms, or you still can’t afford what they’re offering. In this case, traditional loss mitigation procedures may resume. At this point, the usual options will be available to you like a short sale, loan modification, or a deed in lieu. Homeowners may feel that one of these options will benefit them more than agreeing to the terms they have laid out for you in the forbearance program.

Help for renters

These plans by mortgage companies don’t do anything to help renters. Renters, however, can apply for rental assistance through state and federally funded rental assistance programs. I would also suggest reaching out to your landlord and maintaining open lines of communication.

Landlords feeling the pain

Keep in mind, landlords are suffering as much and even more right now. Mortgage forbearance programs are designed for people’s homestead properties and not investment homes. Imagine you have 10 rental properties, 10 mortgages to pay… then, all of a sudden, you stop receiving 10 rental checks all at once!  

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A wave of Short Sales could be headed for Orlando due to COVID-19

While stay-at-home orders are keeping people at home, many Floridians could be falling behind on mortgage and rent payments due to loss of employment and an economy on a downward spiral.

The real estate data-service provider, Attom Data Solutions, reported that 10 of Florida’s 67 counties are in the top 50 most vulnerable counties in the U.S. to the economic impact of the COVID-19 pandemic. Most of these counties are in either North or Central Florida, including Osceola, Hernando, Flagler, Clay, Lake. Surprisingly, Broward county was the most vulnerable of the South Florida counties.

The only state that ranked higher than Florida in this study was New Jersey with 14 counties in the top 50 most at risk in the nation. Also ranked near the top were New York, Connecticut, and California. Real estate markets in the Midwest and West are considered to be less likely to see big numbers of people losing their homes because of the virus outbreak.

483 counties throughout the US were studied to determine what percentage of homes we can expect that will be receiving foreclosure notices by the end of 2020 and what percentage of the local wages are needed to pay for homeownership. The study used data from the last quarter of 2019 to calculate the averages.

Central Florida has one of the lowest median incomes in the U.S. The local economy is largely dependent on tourism and convention revenue which could mean big trouble for homeowners. Many landlords are suffering right now… especially if they depend on rental incomes to pay the mortgages.

Central Floridian homeowners could be facing rough waters ahead

Realtors in Orlando are also starting to feel the pain. Activity has slowed for both buyers and sellers with only people who have no choice but to buy or sell eager to close. Home sales in Orlando are reaching the levels that we saw back in 2008 after the market crash. Orlando Realtors are losing almost $700,000 in daily commissions from the pandemic.

Right now it’s too early to say how this will all play out because we don’t know how effective the Federal stimulus will be in helping people through this financial rough patch. Banks are granting temporary mortgage forbearance to many homeowners and businesses will hopefully get enough help to pay employees through the crisis.

I believe lenders will have to step up and provide some major help to prevent foreclosures in Orlando and other Florida cities. In my opinion, it’s the only way to avoid large numbers of foreclosures and short sales in Orlando.

Potential for Mass Short Sales in Orlando

Like I said before, it’s too early to tell what will happen to Orlando real estate market as a result of coronavirus. However, I do think that if people don’t get back to work in the next couple of months, short sale Realtors in Orlando will be extremely busy by the end of 2020 and well into 2021.

Even lenders aren’t sure how everything will end up playing out because they don’t know how much time it will take for Floridians to get back to work. Short sales and loan modifications are used as an alternative to avoid foreclosure. The problem with loan modifications is that the homeowner will still be on the hook for the entire amount of the loan but with lower payments.

I’ve been a short sale Realtor in Orlando since 2004 and 9 out of 10 times when I present my clients with the terms of both a short sale and a loan modification, they choose short sale.

Doing a short sale, however, will allow the homeowner to sell the home for less than what’s owed on the mortgage. By doing this, the lender gets at least most of their money back and avoids a lengthy and expensive foreclosure process. The homeowner also benefits from a short because they can avoid having a foreclosure on their record and won’t be responsible for the difference between what they owed and what the home sold for.

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TOR 004: Can The Bank Take My Assets After Foreclosure?

Top Orlando Realtors Podcast Episode:004

Hello and Welcome to the show If, you’ve been here before, we are happy to have you back.
Anyone can submit a question or suggest a topic for the show, just go to https://orlandorealtyconsultants.com/blog/ and fill out the contact form.

I’m your host John Conde / Orlando Realtor and I hope everyone is still hanging in there with their New Year’s resolutions. I heard somewhere that most people don’t make it through January without breaking that resolution so if you’re still in the game then you’re doing better than most, so keep it up!

We currently have a client in the Dr. Phillips area that has a pretty unique situation going on.
His name is Dave and he is allowing me to talk about his case on the show as long as I don’t mention his last name. So Thank you for that Dave.

To make a long story short, Dave had a great job, got laid off, fell behind on his payments, and is now facing Orlando foreclosure. Dave wants to know if the bank can come after his other assets after the foreclosure sale of his house.

He doesn’t have much money in the bank, so he’s not worried about that. What he does have, is every toy that a man could want.  He has a ski boat, motorcycles, cars, RV, you name it..he’s got it, and everything is paid for.

Now, the best thing to do is stop Orlando foreclosure before it starts. Dave waited longer than he should have and only decided to take action after the lender had set a foreclosure date.
The sooner you take action, the better chance you have of stopping that foreclosure.

Unfortunately, in this case, foreclosure was imminent. And being that he has well over $100,000 in assets, he has a legitimate concern because these assets or objects, are all he has left and he needs to sell them so that he could have some money to live.

Unfortunately, here in Florida, the lender can absolutely come after your other assets.
This usually happens when the bank takes a huge loss at the auction, especially if it’s a large loan.
And unsecured assets aren’t the only thing that people need to worry about, lenders can also garnish your salary and personal bank accounts.

You see, problems that can occur from a foreclosure sale don’t happen until after the sale has gone through. Here in Florida, lenders can solicit the court for a “deficiency judgment” so they can try and collect the rest of the money that’s owed to them. Once they have a deficiency judgment in their possession, banks can go after any of your personal assets like a car or a boat.

The good news is that Florida lenders don’t usually go after someone’s assets following a foreclosure sale. Especially if they don’t see much to tap into. Collecting judgments takes a lot of time and can cost the bank a lot of money.

Banks tend to pay more attention to jumbo loans because the larger the loan the bigger the loss.
In these cases, the lenders will dig deeper checking your bank accounts…. especially if the accounts are with the same bank as the mortgage.  And Depending on the situation, banks can try to freeze or garnish these accounts.

There is another risk for smaller loan holders that can also occur. Most of the time, banks end up selling off these smaller judgments to investors or collection agencies for pennies on the dollar.
These agencies then dedicate themselves to hounding people any way they can for a settlement on the money that’s owed. And,..since judgments are valid for up to twenty years, it gives them more than enough time to come after the borrower for the balance due.

The best way to avoid any of these things is for people to deal with their mortgage problems head-on. In Dave’s case, he waited too long to take action and he’s now out of options. If you know that you’re gonna fall behind on your mortgage, take action.

If you want out, do a short sale! If you want to keep your house, try a loan modification or bankruptcy. Burying your head in the sand and ignoring the problem is the absolute worst thing that you can do. You give up all your control to the bank. and It’s like having a financial ticking time bomb on your hands.

So remember, if you’re behind on your loan, take action! That’s it for today, please keep those questions coming so we can talk about it on the show.   See you next time!

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TOR 003: How Does The Bank Decide The Value Of A Short Sale?

Top Orlando Realtors Podcast Episode:003

Diego Fontana in the BVL area of Kissimmee asks…”How do they decide the value of a Short Sale property“? The valuation of a property, in my opinion, is the single most important factor in the whole short sale process.

Here’s the way it works. We start by submitting an offer to the bank, the bank will then order what’s called a BPO on the house AKA a broker’s price opinion. In some cases, the bank orders a full-on appraisal, but most of the time it’s going to be a BPO
The person that does the BPO is usually a local realtor hired by an agency that’s been hired by the bank.

So the realtor goes out to the property, takes some pictures, and does some research. then based on things like
• recent sales in the area
• repairs that the home needs
• and even upgrades that the house may have


They take all these things into account to create the BPO report. So this is the realtor’s opinion of what the property’s worth.

Whatever, the BPO comes in at will be the negotiating point between the lender and potential buyer.
The BPO happens…
Now At this point, there are 3 things that can happen that will dictate what follows.
The BPO comes in at a fair valuation, everyone’s happy, and we proceed to close.
The BPO comes in really low, so low in fact.. that the bank insists on another one being done… and although it doesn’t happen too often, it can and does happen on occasion.
The BPO comes in super high and the buyer threatens to walk.

When this happens, the Orlando listing agent has to Do whatever it takes to get the bank to order a second BPO. We do this by making a report of our own… called a CMA or comparative market analysis
This report has even more information than a BPO does.

The sole purpose behind sending them a CMA is to get the bank to order another BPO or if we’re lucky they’ll just use our report.
In the end, after all the dust settles, the lenders are the ones that decide how much they are willing to accept for the property.

So Diego, there you have it. I hope that answers your question.

That’s our show for this week, join us next week for the 3rd episode in our short sale series.

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TOR 002: Will My Lender Come After Me For The Balance After A Short Sale?

In this episode, Lucille from Metrowest asks if her lender will come after her for the remaining balance of the deficiency between her full payoff amount and what the property sells for if she decides to short-sell her home. 


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