Borrowers who walk away from mortgages they can afford to pay – making “strategic defaults” – are running increasing risks that they’ll be penalized for doing so.
Starting in October, Fannie Mae says, strategic defaulters will be disqualified for new Fannie Mae-backed loans for seven years after their foreclosures. Fannie also says it will go to court where it can to recoup outstanding mortgage debt from borrowers who strategically default.
Under a bill that’s passed the House and awaits Senate action, the Federal Housing Administration would be barred from insuring mortgages for those who previously ditched a mortgage they had the ability to pay.
Get-tough policies are forming at the same time that about a quarter of mortgage borrowers owe more than their homes are worth.
Fannie Mae buys about 40 percent of all mortgages and packages them for resale to investors. The FHA insures about 30 percent of home mortgages.
Freddie Mac, which also buys mortgages, says it is examining Fannie Mae’s policy.
To determine if a borrower is in default, Fannie examines whether the homeowner still has access to credit and is paying that debt and others.
Cracking down on strategic defaulters is controversial. Some lenders say it is necessary to stem the tide of homeowners shirking their obligations.
“We need to start treating bad behavior with serious and measureable consequences so that we can get this nation back on its feet,” says Daniel Smith, vice president of mortgage banking at First Place Bank in Livonia, Mich. “Washington needs to come up with a uniform law on this issue.”
Others say homeowners who may appear guilty of strategically defaulting really can’t afford to make mortgage payments.
“It seems like an overreaction,” says Howard Banker, a founder of Fair Mortgage Collaborative, a consumer education non-profit in New York. “If you do default, it goes into foreclosure, and that’s already very damaging to your credit.”
Other policies may be more effective than penalizing strategic defaulters, says Mark Zandi, chief economist of Moody’s Analytics. Changing bankruptcy laws to allow bankruptcy judges to reduce debtors’ mortgages is an example, he says.
“I’m not a big fan of using the stick to get people to stay in their homes. There are instances where it makes no financial sense for them to stay in their homes,” Zandi says. “And how do you know, really, if someone is strategically defaulting?”
Two out of five homeowners say they would consider walking away from their mortgages if their homes were worth less than what they owed, according to a survey by Trulia and RealtyTrac.
WASHINGTON – July 19, 2010 –
© Copyright 2010 USA TODAY, a division of Gannett Co. Inc., Stephanie Armour.
WASHINGTON – July 26, 2010 – A viral email that keeps circulating seems to die out but then returns with a vengeance. Florida Realtors and the National Association of Realtors have received numerous calls from concerned members.
The email incorrectly states that “all real estate transactions will be subject to a 3.8% sales tax.” It then goes on to blame Democrats for inserting the language at the last minute into the recent health care package. To back up the email’s message, it includes an attachment that looks like a newspaper article from the Spokesman-Review, a Spokane, Wash., publication.
Part of the email is true: There is a new real estate tax that will help pay for Medicare, but it impacts a very small number of people. It applies only to sellers making more than $200,000 per year or $250,000 for couples.
The email fails to include information on the article, however, which is actually an editorial opinion of an outside writer and not a news piece. It was written by a representative of The Washington Policy Center (), which includes a link on its website outlining the group’s stance on health care reform.
The National Association of Realtors has created a page explaining the new law that includes rebuttals of the false email.
A Washington Post article created a fictional couple with a joint income of $300,000 (over the $250,000 limit) that made a $600,000 profit on a home sale. In the example, the couple could pay a new real estate tax equal to about $1,900. .
© 2010 Florida Realtors®
PONTE VEDRA BEACH, Fla. – July 19, 2010 – Under a new Florida law, homeowner association boards can go after renters for association fees when the homeowners fail to pay up.
The law has been attracting attention in Ponte Vedra Beach and elsewhere in the Beaches area because so many housing developments have homeowner associations.
“Associations are hemorrhaging,” said real estate attorney Barry Ansbacher, who represents the Marsh Landing homeowner association in Ponte Vedra Beach. “It’s not an isolated case anymore; there’s nobody that hasn’t been touched by this.”
Property owners are traditionally responsible for paying the fees, usually collected monthly or quarterly, to the associations. The fees are typically used to pay for common area maintenance in a residential development, legal and safety issues and enforcement of the covenants, conditions and restrictions set by the developer.
The law, which took effect July 1, says homeowner associations must notify renters that their payments should be paid directly to the association, not to a landlord who has failed to pay the organization.
Homeowners associations govern a subdivision, condominium or planned community. Some associations have lost thousands of dollars because of non-payment. That negatively impacts the upkeep of the community and future home values, said Anna Marks, president of May Management Services, a property management company in Ponte Vedra Beach.
“Their [associations’] job is to protect the asset of the community; if they can’t do this, then property values go down,” she said. “The associations need to be prepared for when the economy turns.”
Joe Ankiewicz, a senior client accounting manager for May Management, said the issue has been ongoing for about two years.
“There are some communities struggling to pay their bills on a week-to-week basis,” he said. “It’s gotten to the point where the Legislature had to come up with a statute.”
If the tenant is ordered to make a payment to the association, it counts as rent credit. The tenant pays the remaining balance to the landlord. For example, if a lease agreement calls for the renter to pay $600 a month including $100 association fees, traditionally they would have paid the whole amount to the landlord. Now, under the law, the tenant would pay the landlord $500 and the association $100.
When a renter is required to pay the association directly, they should keep a copy of the notice from the association seeking payment, as well as cancelled checks and/or receipts. If the landlord demands the entire $600, the tenant should send them copies of the documents and receipts showing their payments to the association.
“If the landlord files an eviction, it’s very important that the tenant doesn’t sit back and assume the payment to the association will protect them; they need to answer the eviction lawsuit,” Ansbacher said.
Typically, landlords who are not paying their mortgage are also not paying their association dues, officials said. Before people rent from a homeowner, they should seek documents showing that they are up to date on their mortgage payments and association dues.
“A prudent tenant raises the question whether the mortgage and association dues are current before signing the lease,” Ansbacher said.
Janice O’Connell, president of Amelia Mortgage in Nassau County, said delinquent owners can also affect bank financing for future owners looking to buy into the community.
“If the delinquency is more than 15 percent in [association] dues, then you can’t get a loan on the project no matter how great your credit score is,” she said. “This just happened to one of my clients two days ago.”
How much people pay monthly or quarterly depends on the community’s size and amenities, Marks said.
“It’s all over the board,” she said. “It could be low to extremely high.”
Also under the law, a tenant is not required to pay the association more than what they pay in rent. The law helps the tenant if they are doing what they’re supposed to do while the landlord isn’t, officials said.
“This cuts both ways, to avoid the association from having to foreclose the unit if the tenant is in place they can pay,” Ansbacher said.
Ponte Vedra Beaches Coalition member Clara Cowan said it’s about time the Legislature helped struggling associations by giving them some tools to work with. The coalition is a group of homeowner associations.
“Everybody’s struggling right now and that includes [associations],” she said. “Associations have bills to pay. When people don’t pay their bills, they are left in a lurch.”
Many questions about the bill remain unanswered, including whether associations can charge for the notice they issue to tenants and what their rights are if the owner files for bankruptcy, Ansbacher said.
“Any time you have a new law, you have people getting a feel for it,” he said.
If an association isn’t paid, they can file a lien on the house and foreclose on the property.
The bill doesn’t address mortgages, which means that a tenant can still be evicted if the homeowner fails to pay the mortgage holder.
Copyright © 2010 The Florida Times-Union, Jacksonville, Shakaya Andres. Distributed by McClatchy-Tribune Information Services.
Millions are looking for ways to shave dollars and dimes from their daily expenses. To share your own tips, send us an e-mail telling us how you save. You can save money on everything, but here's how you can get started around your home.
Use up to 60 percent less energy by boiling water in a microwave rather than on an electric stovetop. When you do use the stovetop, make sure pots and pans fully cover the heating element. A 6-inch pan on an 8-inch element translates to an energy waste of more than 40 percent.
Improve freezer efficiency by keeping the thing as full as possible—with bags of ice, for instance. But keep a 1-inch open space on each side of the interior for better air exchange.
Lower your thermostat in the winter. For each degree that you drop, you cut your heating bill by 3 percent. To feel more comfortable at lower temperatures, place pans of water near heating outlets or radiators. Water-filled air retains heat better, and the added humidity reduces itching and dry skin.
Mix your own garden dirt. Those “enriched” bags of soil boost flower and vegetable growth—at about $8 a bag. Instead, for each one part of dirt or topsoil mix in about two parts of compost—shredded from leaves and branches and available for free at many municipal recycling centers.
Save on a flush in an old toilet by putting a plastic bottle full of water, weighted with pebbles, in your tank.
Get a rain barrel. Connected to your home’s storm gutters, it will collect water for later use on your lawn, vegetable garden or car.
Stop that dripping faucet. Sixty drips a minute will waste about 6,428 gallons of water per year, according to the U.S. Geological Survey.
Shower quickly and save. A 15-minute shower a day costs about $310 a year, even with a low-flow shower head. Cutting the time by a third will save about $100 annually.
Buy torn bags of mulch. Home centers usually set these torn bags aside, then sell the day’s mishaps at a big discount. Your best chance to get these deals is at the end of a weekend shopping day. Bring duct tape to close them, and a tarp to keep your car trunk clean.
Rent that extra room or space in your garage, basement, backyard. Visit sparefoot.com or storeatmyhouse.com to list its availability and your asking price for free. SpareFoot gets a transaction fee equal to half the first month’s paid rent (a spare bedroom can fetch $150 a month). The site also sells legally vetted lease agreements for $19.
Save on printer ink by using the Century Gothic font, which a recent study showed consumes about a third less ink than industry-standard Arial. That saves about $20 a year for a home user printing 25 pages a week.
Do it yourself or hire someone? You can get estimates of the difference in cost for a home improvement project at diyornot.com, as well as advice on whether you should go it alone.
Get your castoffs picked up for free by more than 60 nonprofit furniture banks nationwide. (Your items generally need to be in good condition.) Find one near you at nationalfurniturebank.com.
Boost your knowledge with free online college courses. (You may need to buy books or download special software.) Yale, MIT and Stanford are among dozens of universities offering no-cost knowledge. Visit education-portal.com and click on “OpenCourseWare” for a list of offerings by topic.
Sell your junk, but first get an idea of what it’s really worth by going to itaggit.com, an online “blue book” for pack rats and collectors. The site analyzes recent sales at online markets.
Free photo editing online is available at citrify.com, where your uploaded photos can be tweaked with nifty effects like teeth-whitening and wrinkle-removing. Pixorial.com provides free video online editing and up to 10 gigabytes of free storage.
Sell your books. At cash4books.net or sellbackyourbook.com, you type in an unwanted book’s ISBN number to get an offer. If you like what you see, fill out a prepaid mailing label, box the books and send them off. Payment comes by check or as a credit to your PayPal account.
Volunteer techies give free advice on common computer problems at fixya.com.
Don’t dump, recycle. Join the local bulletin board at freecycle.org and post what you want to give away or something you’re looking for. No money changes hands, and your unwanted stuff won’t add to a landfill. If there’s no group in your area, the website tells how to set one up.
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WASHINGTON – July 13, 2010 – It’s a common Realtor complaint: A property going to contract appraises for less than expected. The buyer cannot put more down; the seller will not lower the price; the sale falls apart.
In some cases, however, the appraiser is not the cause. Banks – fearful of Fannie Mae and Freddie Mac policies that mete out punishment if a house is over-valued – err on the side of caution by shaving value off the appraisal. If guilty of price inflation, they could be forced by Fannie Mae to buy back the mortgage at a substantial cost. By dropping the appraisal value, they hope to avoid any suggestion that they inflated the numbers.
Frank K. Gregoire of St. Petersburg, vice chairman of the National Association of Realtors’ Appraisal Committee, calls the problem widespread. Many sales are “sabotaged by lenders and underwriters arbitrarily reducing the (appraiser’s) value estimate.”
According to Gregoire, many lenders try to double-check an appraiser’s work by ordering a low-cost electronic valuation. The electronic version uses only readily available public records and no on-site inspection, making it less reliable than a true appraisal. However, banks many times get scared if the electronic version is lower than the physical version, and they downgrade the true appraisal value to protect themselves. At other times, they ask the appraiser to explain the price difference, which can also delay closing.
The rules are about to changeRecognizing a problem, Fannie Mae instituted a new rule that becomes effective on Sept. 1. After that date, banks selling their loans to Fannie Mae can no longer simply drop the appraisal value. In guidance issued June 30, Fannie Mae told its participating lenders that they must contact the appraiser to “resolve” disagreements. If that fails, banks must order a second appraisal. In either case, lenders cannot simply drop the original value that supports a sales contract.
A number of appraisers hailed the change as great news.
Pat Turner, an appraiser in Richmond, Va., said that electronic appraisals don’t consider property condition and “are often inaccurate.” According to Turner, he once did a physical appraisal of a property that a California-based firm also did electronically. Afterward, the lender’s review company asked Turner why he did not use one of the comps the electronic firm used. Turner investigated and said he found out that one “comp” was actually a vacant lot, and worth far less than the property being sold.
Fannie Mae’s rule change also attempts to deal with other appraiser complaints, such as the use of inexperienced appraisers who travel to unfamiliar territory by clarifying “appraiser selection” standards.
Fannie Mae and Freddie Mac back about half of all U.S. mortgages, and Freddie Mac officials, when asked about Fannie Mae’s announced rules, said they’re “looking at it.”
Source: Kenneth R. Harney
© 2010 Florida Realtors®
ORLANDO, Fla. – July 6, 2010 – With more than half of the Central Florida’s homeowners owing more for their homes than the properties are worth, the question for some has become: How do I get out of this?
Of all the existing-home sales reported by Realtors in the core Orlando market in May, 23 percent were short sales. They are called “short” sales because the sales price come up “short” of, or less than, the amount owed on the mortgage.
What these homeowners, whose loans are “underwater,” may not realize is that they could successfully complete a short sale of their house but then face a lawsuit from their lender for not paying off the entire loan, a shortfall known as a “deficiency.”
At particular risk of being hit with such a debt judgment are owners of second homes and investment properties, homeowners who haven’t faced any kind of financial hardship, and owners who have a second mortgage.
“That’s going to be a huge problem moving forward in the next few years,” said Orlando lawyer Matt Englett, who specializes in home foreclosures. “These people who use Realtors to advise them on the transactions can end up facing deficiencies, and the deficiency notes will go to third-party collections agencies, and they will start suing and progressively pursuing those people.”
Homeowners have several options if they wish to avoid getting calls and lawsuits from debt collectors.
In a mortgage document called the “payoff letter,” a lender may include a blanket provision stating that it reserves the right to sue the seller at any time for unpaid mortgage debt. At the very least, Englett said, sellers need to make sure they do not give lenders that right.
Some lenders, particularly smaller ones, have been willing to state just the opposite -- that they will not pursue any mortgage debt from the seller, he added.
Simply asking the lenders to cooperate by removing any wording about collections isn’t enough, Englett said. The seller is usually faced with building a case that details errors and omissions made by the lender in its mortgage documents, to gain leverage and force the lender to forgive the debt.
A new option that emerged in June is a federal program that calls on banks to forgive some of the mortgage debt of certain, qualified short-sale sellers. To qualify, sellers must:
Meet the criteria of the federal government’s Home Affordable Modification Program.
Have the house as their primary residence.
Face a financial hardship, and their mortgage payment must be more than 31 percent of their gross income.
The new program makes short sales a good option for homeowners facing a financial hardship, though it’s not meant for homeowners who can afford their mortgage but want to walk away from an upside-down loan, said Frank Rubino, vice president of the Chase Homeownership Center in Orlando.
“It’s not right. It’s not moral. It’s not the right thing to do,” Rubino said. “Why should customers look to the bank to substantiate a loss for the house they bought? ... If they bought the house and sold it for $100,000 more than they paid, they wouldn’t share those profits with the bank.”
The decision of whether to pursue a former homeowner for outstanding debt varies from mortgage servicer to mortgage servicer, Rubino said, and can hinge on such things as whether the customer mismanaged his or her finances, Rubino said.
Sellers with a second mortgage face particular challenges if they try to walk away from a short sale without any remaining debt.
Jennifer Davis, a real estate agent for Lifestyles Home Sales Inc. of St. Cloud, said she recently almost lost a sale because of outstanding debt the seller owed on the house. Fortunately, she said, the buyer wanted the house badly enough to cover the outstanding note.
Banks usually have four years in which to file a deficiency judgment, but they can sell it to a third-party collection agency -- “and the collection firms can chase you down for 20 years,” Davis said.
In cases where the seller has a second mortgage or can’t qualify for the federal programs, Davis said, she usually directs them to a real estate lawyer and a tax adviser.
Copyright © 2010, The Orlando Sentinel, Fla., Mary Shanklin, Knight Ridder/Tribune Business News. Distributed by McClatchy-Tribune Information Services.
By CLAYTON PARK, Staff writer
Efforts to attract and retain businesses in Ormond Beach continue to produce tangible results, even in the worst economic downturn since the Great Depression, the city's head economic-development official said.
In the past three years, the city's economic-development efforts have resulted in the creation and/or retention of 850 jobs with 138,000 square feet of new commercial construction and $18 million in capital investments by area businesses for industrial-plant improvements and/or expansions.
But as communities across the state and country ratchet up business recruitment, the city needs help from as many partners as it can get to stay competitive in the game of "economic hunting," Joe Mannarino, the city's director of economic development, told a business gathering Monday.
Mannarino said the city's development goals for the coming year include working with Tomoka Holdings on its plans to create a massive 3,000-acre, mixed-use development called Ormond Crossings along North U.S. 1, with more than 2,900 homes and nearly 4.9 million square feet of industrial and commercial space, selecting an aviation firm to master-plan and develop the southwest quadrant of the city's Airport Business Park and working with Realtors and hospital-management officials to facilitate reuse of the former Florida Hospital Memorial building on Sterthaus Drive.
The Ormond Beach Chamber of Commerce, which hosted the breakfast at Halifax Plantation Country Club, pledged to step up its support by forming a business-recruitment team to assist the city. Details regarding the plans have yet to be worked out.
Kent Jones, the chamber's 2010 board president, and Patrick Opalewski, the chamber's president-elect, said the proposed recruitment team would be a pool of area business leaders who would make themselves available to work with the city in pitching the merits of Ormond Beach as a place to do business to companies considering relocating or expanding here.
The team would include commercial real-estate brokers and agents, business owners and/or executives from a wide range of industries and officials from a number of organizations, such as the Center for Business Excellence, the Small Business Development Center at Daytona State College, Volusia County's Department of Economic Development and the Service Corps of Retired Executives (SCORE).
If the concept sounds familiar, it should. Mannarino acknowledged the chamber's Ormond Beach Business Recruitment Team, in some ways, will be a more localized version of the Team Volusia Economic Development Corp., the new public/private partnership being formed to coordinate efforts throughout the county to recruit and retain businesses. Mannarino said Team Volusia should be a welcome complement to but not a replacement for his own department.
"We look at Team Volusia as an additional resource ... mainly to help us with business recruitment," said Mannarino, who added it will still be up to each city to make a pitch, separate from Team Volusia, as to why their community would be the best home for that business.
George Mirabal, president and CEO of Team Volusia, said his organization applauds efforts by the city and Ormond Beach chamber.
"We're thrilled that any city or chamber continues to view economic development as critical and important," said Mirabal. "Team Volusia's intent has never been to replace" those efforts, he said.
"Partnerships ... are what it's all about," said Mirabal. "We keep saying economic development is a team sport."
Copyright © 2010 The Daytona Beach News-Journal
TALLAHASEE, Fla. – June 18, 2010 – Florida’s efforts to renourish eroded beaches does not violate the rights of nearby property owners, the U.S. Supreme Court ruled Thursday in a case brought by Walton County landowners following 1995’s Hurricane Opal.
In a 15-page ruling, the nation’s highest court agreed with the state that beachfront owners are not severely harmed when renourishment efforts extend the distance their properties lie from the shoreline by, in essence, expanding the shoreline seaward.
The case stems from recovery efforts following Hurricane Opal, when Destin and Walton County began a process of pumping sand onto beaches, establishing a boundary line between public and private land to control future erosion.
Stop the Beach Renourishment, a not-for-profit group of six landowners, argued before the Supreme Court that these augmented beaches deprived them of direct beachfront access and should be considered a taking of their land. The First District Court of Appeal (DCA) agreed.
But the nation’s high court upheld the 2008 state Supreme Court opinion that overturned the earlier DCA decision. The state has a “constitutional duty to protect Florida’s beaches,” according to the Florida Supreme Court, and was within its rights by moving forward with renourishment.
Landowners’ rights were not violated, the U.S. Supreme Court ruled, even if the extra sand increased the distance between the landowners’ property lines and the water.
“Regardless of whether an … event exposes land previously submerged or submerges land previously exposed, the boundary between (private) property and sovereign land does not change,” Justice Antonin Scalia wrote for the majority. “It remains (ordinarily) what was the mean high-water line before the event.”
Attorneys for the landowners said Thursday they we disappointed in the ruling, saying it further diminishes private property protections guaranteed in the U.S. Constitution.
“Private property rights are a legacy forged in the American Revolution by our Founding Fathers and passed on to us through the generations,” attorneys Kent Safriet and Richard Brightman of Hopping, Green & Sams wrote in a joint statement following the high court ruling. “They are a cornerstone of our society’s prosperity and freedom. Today’s ruling weakens those rights to the detriment of private property owners everywhere.”
Source: News Service of Florida, Michael Peltier
WEST PALM BEACH, Fla. – July 2, 2010 – An estimated 14,830 Florida home buyers missed Wednesday’s deadline to receive an up to $8,000 tax credit on their purchase.
Good thing for them Congress extended the cut off date late Wednesday to Sept. 30. The bill now goes to President Obama.
Homebuyers still had to sign contracts for their purchase by April 30, but now have an additional three months to close the deal.
Nationally, the extension is expected to give about 180,000 homebuyers who signed by April 30 a chance to earn the federal stimulus.
Short sale purchases, which can take several months to close, were hampering many closings.
Buyers “didn’t know when they signed the contract it was going to take the bank four months to close the deal,” said John Sebree, vice president of public policy for the Florida Realtors.
Another problem was the failure of Congress to reauthorize the National Flood Insurance Program, which put the brakes on lender approvals for some loans. That program was also temporarily extended late Wednesday until Sept. 30.
Realtors are lobbying Congress to approve another bill extending the program for five years.
“It’s really not good for the real estate market to have such uncertainty,” Sebree said.
“All day there was anxiety as to whether or not numerous buyers that did the right thing signing a contract by April 30th would lose out on $8,000 due to slow short sale approvals or delays in financing that were no fault of their own,” said Realtor Shannon Brink, with RE/MAX Prestige Realty in West Palm Beach. “If the tax credit disappeared, there was a significant risk that many buyers would walk away from transactions because they may try and find a better deal.”
Some buyers grew frustrated and have already walked away, said Bob Goldstein, past president of the Realtors Association of the Palm Beaches and a vice president of the state organization.
The tax credit was initially for new homebuyers only and expired Nov. 30. It was extended to the April 30 and June 30 deadlines, and also expanded so that some current homeowners could earn up to a $6,500 credit.
Copyright © 2010, The Palm Beach Post, Fla., Laura Green and Kimberly Miller. Distributed by McClatchy-Tribune Information Services.
Obama signs extension bills On July 2, Pres. Obama signed into law HR 5623, the Homebuyers Assistance and Improvement Act of 2010, which extends the homebuyer tax credit closing date to Sept. 30, 2010, for qualified buyers with a purchase contract that was signed by April 30, 2010. He also signed HR 5569, which retroactively reauthorizes the Federal Emergency Management Agency (FEMA) to enter into new contracts for flood insurance under the National Flood Insurance Program through Sept. 30, 2010.
WASHINGTON – June 18, 2010 – The IRS has been rejecting first-time homebuyer claims from anyone who shows a Form 1098 Mortgage Interest Expense in their prior year files.
In many cases, the applicants are entitled to the credit because their previous mortgage interest deduction is for a timeshare, mobile home, boat or other recreational property.
If you have a client in this unfortunate position, here is some advice from Enrolled Agent Eva Rosenberg, who authors the Web site TaxMama.com.
• Respond to the IRS immediately and tell them why their rejection is wrong. Be prepared to prove that the mortgage the IRS is seeing isn’t on a personal residence. First-time homebuyers are entitled to own other types of real estate and still get the homebuyers credit, so provide proof that the previous mortgage was on something else.
• Send a letter explaining the situation and providing proof of a previous rental or other non-ownership living situation, including copies of rental contracts for the last three years, an old driver’s license showing that address, utility bills, etc.
• Homebuyers who believe the IRS may view their situation in this way should be proactive, providing proof that they are a first-time buyer when they initially file for the credit.
• Anyone who is rejected after two attempts to explain the problem to the IRS should call the Taxpayers Advocate Service toll-free,
(877) 777-4778 begin_of_the_skype_highlighting (877) 777-4778 end_of_the_skype_highlighting, their Congressman, and their Senator, Rosenberg advises.
Source: TaxMama.com, Eva Rosenberg, EA (06/16/2010)
© Copyright 2010 INFORMATION, INC. Bethesda, MD
(301) 215-4688 begin_of_the_skype_highlighting (301) 215-4688
Florida, viewed by economists as a hot spot of the country's housing and mortgage meltdown, is having a pickup in builder interest and activity.
Sensing a pending recovery in some of the state's markets – including Orlando, Jacksonville, and Tampa – builders are amassing land at bargain prices and passing the savings on to buyers by developing subdivisions of smaller and less expensive houses. The trend sets home builders up to compete with banks that are trying to unload foreclosed properties.
While analysts previously believed that Florida would generate little new demand for housing for years, and that buyers would instead buy foreclosures at deep discounts, property agents note that purchasing real-estate-owned units from a bank has proven to be complicated, time-consuming, and more expensive than anticipated.
ORLANDO, Fla. – June 17, 2010 –
Source: Wall Street Journal (06/15/10) P. B6; Whelan, Robbie
http://www.yourhomeandlifestyle.com/pages/article/YHL_JUN_10_03/40033/index.html
A state group in Florida has unveiled plans for divvying up $317 million in federal foreclosure relief to mortgage-challenged Floridians struggling with unemployment, underemployment or medical hardships.
The Florida Housing Finance Corp. will distribute the money to counties based on local home-value declines, unemployment rates and totals of seriously delinquent mortgages. South Florida counties are tops on the distribution list, followed by Orange County, which would get $23.7 million. Volusia and Osceola each would get more than $8 million, while Seminole is slated for $2.3 million and Lake is due $1.6 million.
Of 352,893 seriously delinquent loans in the state, about 50,000 are in Central Florida. The state hopes to help 12,000 households with its Mortgage Intervention Strategy.
"Forty-eight million dollars sounds like a lot of money, but in a state like
Florida it won't go very far," said David Westcott, director of homeownership programs for the Florida Housing Finance Corp. "We are counting on lenders to pick out people who are part of the community and just need some help getting back on their feet so they can stay in the home they so desperately want to stay in."
The housing group last week gave housing counselors a preview of the plan in Orlando. It is expected to approve the distribution plan — and choose a pilot county — on Friday. The money could reach homeowners before the end of the year.
Homeowners who qualify would get at least nine months of their mortgage, taxes and insurance paid for through the U.S. government's Hardest Hit Fund program. Florida is one of five states that will share in $1.5 billion of the funds. Of the state's $418 million, most will go to the mortgage-intervention strategy.
Following that mortgage hiatus, homeowners also may qualify for an average $25,000 reduction in the loan principal that they owe. The hope is that, once their income increases, they can get a further loan modification and resume making mortgage payments.
The money is considered a loan to be forgiven incrementally — 20 percent a year for five years. If the homeowner can no longer make mortgage payments and the home goes into foreclosure, the loan is likely to be wiped away, Westcott said.
To qualify for the relief, homeowners must apply to a local housing-counseling agency; such agencies are now in the process of seeking the housing-finance authority's permission to screen applicants. Homeowners who are already in a loan modification are unlikely to qualify, officials said. And homeowners may need to sign affidavits stating that they are underemployed, for instance.
Westcott said the pilot program is likely to wind up in a hard-hit South Florida county, where the agency would test the program for two or three months before rolling it out statewide later this year.
Members of the Florida Housing Finance Corp. met Friday at the Peabody Orlando hotel with about four dozen housing-counseling agencies to introduce the program.
"We don't want to help people who, through their own mismanagement, got themselves into the situation they are in, using their home as an ATM and taking out all the equity to buy themselves a boat. … We are not going to help the strategic defaulter," said Nicole Gibson, federal loan-programs administrator for the corporation. "They don't want their home anyway."
Several of the housing counselors who attended the session questioned some aspects of the program, such as whether enough jobs would return to sustain the mortgages once homeowners have exhausted their funds.
"Unless people have some income, there's still going to be a problem," said Eddie Felton, executive director of the Home Ownership Center of
Lee County. "A lot of those jobs aren't coming back."
The program is also open to criticism from homeowners who have been making their payments all along and who will question, Felton said, why the government isn't helping them.
"Here it is: My tax dollars again are being given to people who aren't worthy," Felton said. "That's the way it's going to be perceived."
Mary Shanklin can be reached at
mshanklin@orlandosentinel.com or
407-420-5538 begin_of_the_skype_highlighting 407-420-5538 end_of_the_skype_highlighting.