Tag: Orlando Foreclosure

Short Sales Run Parallel to Foreclosure

Posted on by Jenny Zamora

There is a common myth in the world of short sales that once you begin the short sale process, it stops the foreclosure process. I’ve been doing short sales in Orlando since 2005 and I can tell you from experience that it’s just not true. Don’t get me wrong… in some situations, it can happen and often does happen, where the lender suspends foreclosure proceedings if a house is in the short sale process and they want to see how it plays out. However, some people have the impression that starting a short sale with their lender will automatically stop the foreclosure process and the truth is that nothing can be further from the truth. The fact of the matter is that the foreclosure process and the short sale process run parallel to each other and sometimes it just comes down to a race to see which situation arrives first.

Although we have an outstanding track record when it comes to getting short sales done, even with a pending auction date, I will still tell my clients that nothing is guaranteed. And anyone who tells you differently is either lying or they’re just ignorant on the subject. The problem occurs when a real estate agent tells someone that they guarantee to complete their short sale just to get them locked in as a client and the property ends up getting sold at the auction anyway.

When I hear about this happening to someone, it makes me absolutely furious because a short sale is only one of many options to avoiding foreclosure. Not only that but sometimes it’s not even the best option for someone, especially if the seller wants to try and keep the house. It’s true that realtors get paid a commission when they complete a short sale but this is no reason to try and steer somebody into this situation when they know that another option may suit them better.

Here are some alternatives to short sales.

1- Loan Modification- This is when we try to get the terms of your loan adjusted thus making it more affordable to the homeowner.

 

2- Deed-in-Lieu- A deed-in-lieu occurs when you sign the house back over to the lender as opposed to going through the foreclosure process.

 

3- Bankruptcy Chapters 7 or 13– This will offer the homeowner the opportunity to either buy some time and try to get reorganized or eliminate their debt as well as their assets in order to satisfy their outstanding debts once and for all. Bankruptcy situations should be discussed with a bankruptcy attorney.

I learned 9 years ago when I first started in the real estate business, that to be a successful real estate agent you should always, always do what’s best for the client that you’re representing and not what’s best for your bank account. This mindset has always served me well and I truly believe that I am more successful because of it.

 

 

 

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Orlando Foreclosure Discounts Shrinking

Posted on by Jenny Zamora

Orlando Foreclosure properties just aren’t the bargains that they used to be. In August of 2009, the average discount on a foreclosed home was about 24%. As of September of this year, it’s now down to about 7% compared to what a home buyer would’ve paid for the same property in a conventional transaction.

Orlando, which is one of the cities that was hit the hardest by the foreclosure crisis has such a strong demand right now for properties that the discounts are pretty much gone unless the house is in need of major renovations. Our company specializes in Orlando short sales and I can tell you that just about every one of our listings receives multiple offers for the listing price or above.  It’s extremely rare these days that we get an offer that’s lower than the listing price because buyers know that it’s a very competitive market right now. As a matter of fact, about half of our properties end up selling for over the listing price.

Regular homebuyers [not investors] are the main reason for the increased demand for Orlando real estate. Everyone wants to take advantage of the historic affordability, which means the combination between lower home prices and great mortgage rates. This doesn’t mean that you still can’t get a good deal in Orlando, but be prepared to submit multiple offers on multiple properties. It’s because of this that it’s much more work to be a buyer’s agent where you have to show multiple homes and submit multiple offers before you find what your buyer is looking for. It’s very common these days to go see a house that has been listed for less than 24 hours and find out that the home already has multiple offers on it.

Orlando Re-Habbers Still Turning a Profit

The average home buyer wants nothing to do with remodeling a home after they’ve purchased it. This is why there’s soo much competition for Orlando homes that are move-in ready. However, for the home buyer that is willing to roll up his or her sleeves and dive into some major home repairs, there’s still a profit to be made. There are some lenders that will complete the renovations on their own foreclosed properties before putting them back on the market, but most of the time they just want to sell them as-is.

Homes that are in need of repairs can still be good investment opportunities if you know what you’re doing. Using an experienced Orlando realtor to help with your search is highly recommended. It’s also important to know what repairs need to happen and how much the repairs will cost before you commit to buying a fixer-upper. Although profit margins are quite a bit smaller than they were a few years ago, a full-time rehabber can still make a decent living from flipping houses.

 

 

 

 

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Orlando Homeowners Rush to Short Sale Their Homes before the Mortgage Forgiveness Debt Relief Act of 2007 Expires

Posted on by Jenny Zamora

Orlando homeowners are in a panic to sell their homes before the end of the year when the Mortgage Tax Debt Relief Act of 2007 is set to expire.

There’s a chance that the Act could be extended but, if Congress fails to extend the Mortgage Forgiveness Debt Relief Act of 2007 before the end of the year, homeowners will have to start paying income taxes on the portion of their mortgage that is currently being forgiven in a foreclosure, short sale or principal reduction.

That would mean that a homeowner who sells a $150,000 home for $100,000 in a foreclosure, could be taxed by the IRS on the remaining $50,000. If you’re in the 25 per cent tax bracket that would mean paying $12,500 in taxes and similar taxes would apply to forgiven amounts in short sales and principal reductions.

Consequently, Orlando homeowners are rushing to short sell their homes before the end of the year. More than 50,000 homeowners face foreclosure each month so, should the tax breaks expire, a large number of mortgage borrowers would be affected.

Over the past three years, the number of short sales has tripled to about a half million per year. Under the terms of the foreclosure abuse settlement, about one million borrowers may have their mortgage debt lowered through principal reductions over the next couple of years. The cost of the settlement would be $25 billion.

It is speculated that, now that the election is over, there will be very little legislation moving forward before the end of the year. Plus, the cost of a one-year extension is estimated at $1.3 billion, which makes it a huge point of contention.

Others feel that Congress will act before the end of the year because both houses agree that the Mortgage Tax Debt Relief Act needs to be renewed and it’s only a matter of how quickly the process will move forward.

Some Orlando homeowners may have nothing to worry about, as not all borrowers with forgiven mortgage debt will have to pay extra taxes. Even if the Mortgage Forgiveness Debt Relief Act expires on December 31st, special circumstances could exempt them. Specifically, no taxes would be owed if a debt is discharged in a bankruptcy or in the case of a homeowner being insolvent, that is, they had more debt than assets at the time the debt was forgiven.

In addition, certain states treat foreclosures differently so that some borrowers are protected against paying the tax.

 

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Fixing your credit after an Orlando short sale

Posted on by Jenny Zamora

Getting your credit score back on track after your short sale is complete

 

The local economy is recovering “slowly but surely”, the housing market is getting stronger and the term  “Orlando short sale” has become a household name. Delinquent homeowners generally elect to pursue a short sale as opposed to going through foreclosure or bankruptcy.
Short sales have become so common in fact that it’s hard to find someone that hasn’t heard of a short sale as opposed to just a few short years ago when most people had no clue what a short sale was.

 

A short sale is when a mortgage holder tries to sell their property for less than what is owed. The delinquent homeowner must first get permission from their lender in order to pursue the short sale. Homeowners will typically seek out a short sale when they can no longer afford to pay the mortgage or the house owes much more than what the property is worth. Banks have come to the realization that they actually lose more money by taking a property to foreclosure as opposed to a short sale.

 

Many people will argue that a short sale will affect you far less than a foreclosure but the truth is that whether a seller does a short sale or foreclosure the points you lose are about the same. Fair Issac says the average points lost on a FICO score are as follows:

30 days late: 40 to 110 points
90 days late: 70 to 135 points
Foreclosure, short sale or deed-in-lieu: 85 to 160
Bankruptcy: 130 to 240

 

People who Opt for an Orlando short sale will have a much better chance of qualifying for a mortgage in the future.

It depends a lot on how the lender records or reports the sale once the transaction is complete. A short sale is usually recorded by the lender as a settlement as opposed to a paid debt. When the lender reports the sale as “settled”, it appears on a credit report as the lender accepting less than what  was owed. This will always have a negative affect on credit scores. However, if you’re able to get the lender to record the sale as “paid”, then your credit score will not suffer any further. The chances of this happening are slim to none and it takes some really good negotiating skills by your Orlando realtor with the short sale lender in order to accomplish this improbable task.

 

 

According to some mortgage brokers that I work with, it’s much easier to get someone a loan that has a short sale on their credit as opposed to having a foreclosure on their credit, even after several years have passed. The best thing to do once your short sale has gone to closing, is to contact several of these Credit repair companies and find out what they are offering. My suggestion, as always would be to  Google “credit repair companies” and contact all the companies that appear on page 1. Credit repair has become very competitive and most companies will work with you on an affordable payment plan.

 

 

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Frustrations Increase among active Orlando Real Estate Buyers

Posted on by Jenny Zamora

Active Orlando Realty buyers are more frustrated than ever

People that are actively searching for an Orlando property are getting more and more concerned about rising prices on quality Orlando homes and they have every right to be. Inventory is at an all time low while demand is through the roof. Many of them have even decided to put their home buying plans on hold and have elected to remain in their current housing situation.

One of the biggest concerns right now is the lack of inventory in Orlando real estate. Buyers get very frustrated when they find a property that they like only to find that there is already 10 offers on the table for the same property.

In Orlando there is about half as many homes for sale as there was this time last year. Some people still believe that prices will drop and are holding out for that “deal of a lifetime”.  Thinking that prices will drop in the near future is just not realistic and is just flat out not true.

The fact is that prices of Orlando real estate will continue to rise for quite a long time. Sure you can still try to get a good deal on a house needing to be refurbished, but in that market you’re competing experienced Orlando real estate investors. Re-habbers make their living on buying properties, fixing them up and selling them for a healthy profit. If you think that competition is tough on the retail side of real estate, try competing with local investors. The wholesale market is just as competitive if not more than buying an Orlando home that is move-in ready.

 

Orlando homeowners are staying put

For homeowners who were on the fence about selling but really don’t want to, have reconsidered and have decided to remain in their home. They see what’s going on in the Orlando Real estate market and they are loving it.  There seems to never be a time when both buyers and sellers are pleased with whatever the market is doing. Sellers will always want top dollar for their home and buyers will always want to get a fantastic deal on a great property.  Let’s face it, Who in their right mind would sell right now if they didn’t have to?

 

Jenny Zamora, Lic Orlando Real Estate Broker

 

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