Miami Lawyer Blog

According to attorney Aaron Resnick, the foreclosure wave has not diminished in Miami-Dade County, Florida. Of the 50 largest metro areas, Riverside-San Bernardino posted the highest foreclosure rate, with one in every 62 housing units with a foreclosure filing during the quarter. In Miami, one in every 95 housing units had a foreclosure filing this past quarter.

Other metros with foreclosure rates that were more than twice the national average included Sacramento (one in 77 housing units), Las Vegas (one in 82 housing units), Phoenix (one in 87 housing units), Atlanta (one in 90 housing units), Miami (one in 95 housing units), Orlando (one in 101 housing units), and Chicago (one in 107 housing units).

RealtyTrac is an online marketplace of foreclosure properties, with more than 2 million default, auction, and bank-owned listings from over 2,200 U.S. counties, along with detailed property, loan and home sales data.

The metro areas that saw the largest increases in foreclosure activity among the 50 were Orlando (+52 percent); Indianapolis (+41 percent); Hartford, Connecticut (+38 percent); Miami (+37 percent); and Philadelphia (+33 percent).

Metro areas with foreclosure rates in the top 20 category included Atlanta (No. 11); Miami (No. 13); Orlando (No. 15); Rockford, Illinois (No. 16); Chicago (No. 17); and Prescott, Arizona (No. 19).

The Law Offices of Aaron Resnick, P.A. is positioned to help homeowners with short sales, loan modifications and foreclosure defense throughout the State of Florida.

According to attorney Aaron Resnick, based upon a preliminary report released by LPS, 2,060,000 properties are in foreclosure inventory. As of the end of the 2011 fourth quarter, 11.1 million borrowers were reported to be underwater, according to CoreLogic.

That's a lot of potential debt to be forgiven, and through the Mortgage Debt Relief Act of 2007, homeowners get a break from paying taxes on their forgiven debt - whether it was forgiven through a short sale, foreclosure, or a modification. The act though, is set to expire at the end of this year.

If extended, this could lead to thousands in savings for the individual borrower. For example, depending on one's tax bracket, every $10,000 in forgiven debt could incur as much as $1,500 to $3,500 in federal taxes. Thus, if $100,000 in mortgage debt is forgiven after a foreclosure, this could mean $15,000 to $35,000 in taxes owed for the borrower.

Rushing to hand over a deed before the December 31 expiration date could become a mistake though if Congress ends up extending the debt relief act, which it may.

"Obama did include it in his budget, to extend it to 2014," said Mark Luscombe, a principal analyst for tax research firm CCH, in a statement. "Congress..... might decide it's not as crucial as extending the tax breaks that already expired at the end of last year."

That doesn't mean Congress won't eventually act to extend the relief, Luscombe said.

"Usually the only fight about these things is finding a way to pay for it," he said.

The administration is proposing to extend the act until January 1, 2015.

The criteria to have forgiven debt excluded as taxable income is the debt must be from a primary residence, and the debt must be used to buy, build or substantially improve a primary residence.

Also, the exclusion applies only to acquisition debt up to $2 million, or $1 million for married taxpayers filing separately.

About the Law Offices of Aaron Resnick, P.A.

The Law Offices of Aaron Resnick, P.A. is a full service boutique law firm with offices in Miami, Boca Raton, Gainesville/Ocala, Jacksonville and New York City. For additional information, please go to www.thefirmmiami.com, or call 305.672.7495.

The tax implications of a short sale, more specifically the deficiency in the short sale, are a very common question; especially this time of year. Here, specified by a highly placed tax and financial professional, is the definitive answer. Combined with the imminent effect of the Home Affordable Foreclosure Assistance act by Congress, will enable all distressed short sale property owners to breathe a huge sigh of relief.

One more time, a short sale occurs when the mortgage lender allows the property to be sold for less than the balance owed on the mortgage. This can be negotiated with the lender as part of a financial hardship account by the borrower. Short sales are notorious for taking months to complete because the mortgage servicer stalls and ignores the application. A mortgage loan deficiency is the difference between the actual selling price of the distressed property and the mortgage loan balance at closing.

It's important to get the mortgage deficiency negotiated before closing when the distressed homeowner has control. After foreclosure, the homeowner gives up all control and the mortgage servicer is free to come after the deficiency amount for years.

It has been demonstrated inumerable times that mortgage loan servicers benefit more from a foreclosure than a short sale or mortgage modification. Engaging an experienced short sale negotiator and investor like the ones I represent assures that the lender will not be allowed to stall the process. The one mistake in the expert article is the statement that a short sale decision is clearly up to the lender. By getting the REST Report and an unbiased short sale amount, the homeowner will be supported by their local foreclosure court and the mortgage servicer will not be able to foreclose without good faith negotiations. The REST Report has been sanctioned by every judge who has seen it.

Typically, the lender will issue a form 1099C (cancellation of debt), and the amount canceled would be taxable as income to the borrower (seller). Current law allows short sales of a principal residence completed during 2007 through 2012 to exclude the forgiven balance from taxable income, up to $1 million for a single filer and up to $2 million for a joint return. For more detailed information, consult IRS Publication 4681 or your tax adviser.

While the Home Affordable Foreclosure Assistance law states that the lender will no longer be allowed to come back to the former homeowner for that deficiency, no one who has completed the HAFA process is happy with it. Everyone will tell you that they would have been better off using an independent short sale investor and negotiator.

Obviously the easiest way to stay of foreclosure is to make mortgage payments on time. In today's faltering economy, this is not possible for everyone. If you are struggling to make your house payment each month or are already a month or two behind, you might be worried your bank will foreclose on you. With foreclosure rates so high across the nation, this is a valid fear. However, you have more power to negotiate with your lender than you probably think. High foreclosure rates means there are a lot of homes on the market, and banks are having trouble selling them. You have a few tools to keep yourself out of foreclosure.

First, make sure you contact a Miami foreclosure attorney to help you. They are experienced in dealing with banks. While you may want to keep your home, you really must be realistic. If you are out of work or making way less money than when you purchased the home then keeping your home might not be in your best interests. A foreclosure attorney can sit with you and figure out your financial situation. If keeping your home is a realistic option for you, you still have several tools to work with.

Short sales in Miami occur you will ask your bank for permission to sell your property for less than the mortgage balance. Why would they let you do that? They will let you do that when the loss through short sale is less than the loss through pursing a foreclosure. If your bank agrees, you sell the house to the buyer with the best offer. If you do not foresee being able to afford payments anytime soon, this may be a good option to avoid foreclosure. You get to get out of a mortgage while avoiding a foreclosure on your credit, the bank avoids losing more money and the buyer gets a great deal on a home. Your bank does have to agree to a short sale, so you will need to hire a lawyer and contact your mortgage company to apply for a short sale.

Loan modification in Miami is another tool to avoid foreclosure. This way will allow you to keep your home and save money at the same time. A loan modification occurs when you notify your mortgage company that you having trouble making payments. The best way to convince them of this is to miss a few payments, unfortunately. A loan modification can be lower interest rates, a grace period where you can miss a few payments without penalty or a longer payment period. Again, your bank must agree to a loan modification.

If you are one of the lucky ones, the economy has yet to have you consider the prospect of Chapter 13 bankruptcy in Miami. If you have considered a chapter 13 bankruptcy in Miami, you are not much different than anyone else in Miami. Many of us have considered the idea of bankruptcy, particularly when you have so much debt that you feel as though you are drowning in it.

A chapter 13 bankruptcy in Miami involves the restructuring of your debt. This type of bankruptcy may allow you to keep your home and much of your assets as a chapter 13 bankruptcy will help you reorganize your debt into payments that are more affordable. The only problem with this type of bankruptcy is that your spending and finances will be thoroughly scrutinized by the court appointed liaison until you have finished repaying your debt.

When considering a chapter 13 bankruptcy in Miami, you may want to take a step back, decide if there is a way to liquidate some of your assets to repay your debt first as this will be more preferable to your credit report. Regardless, you should seek the advice of a chapter 13 bankruptcy attorney in Miami, long before you actually file for a chapter 13 bankruptcy.

A chapter 13 bankruptcy lawyer can advise you on any options you may have in order to avoid filing for bankruptcy and if you cannot avoid the bankruptcy, your Miami attorney can then help you prepare, file and follow through with your chapter 13 bankruptcy. Utilizing a chapter 13 bankruptcy attorney can assure that you are making the best possible decisions for your personal and financial future.

Do you own or operate a small or large business in Miami? Is so, you may have noticed a rash of businesses filing for a chapter 11 bankruptcy in Miami. Why? Probably because the economy is not at its best at the moment, unemployment is up, interest rates are up and people are just not spending the same amount of money they used too. Filing for a bankruptcy sounds like a scary prospect, but in truth, a chapter 11 bankruptcy is not as scary as it sounds.

A chapter 11 bankruptcy in Miami is filed when a business, small or large, reaches a point when the income to debt ratio is off balance. Paying your monthly bills becomes a chore and you as a business owner decided that there is no other alternative.

Chapter 11 is a lot like filing a Chapter 13 bankruptcy in Miami. While a chapter 13 bankruptcy in Miami is for an individual person or family, chapter 11 is for businesses. It is a restructuring bankruptcy. It is the type of bankruptcy that will not eliminate your debt, but restructure business, your debt and your monthly bills so that the monthly payments are more affordable and at the same time allow you to keep your business open and running. Once you pay off the debt, you will be free and clear of debts. The only downside of this type of bankruptcy is that you will have someone oversee your expenses and you will basically be under a microscope with your business accounts to assure that you are able to pay your monthly payments.

There may be alternatives to filing a chapter 11 bankruptcy in Miami. You should talk to a chapter 11 bankruptcy attorney in Miami about your options BEFORE you file bankruptcy. A chapter 11 Bankruptcy lawyer can help you file bankruptcy, give you support and defense when needed during your bankruptcy and explain the ramifications of filing a chapter 11 bankruptcy in Miami. With a phone call you can obtain a free initial consultation to discuss your chapter 11 bankruptcy options.

As foreclosures continue to rise in Florida, many home owners are falling victim to Miami foreclosure lawyers who work for firms that do not provide results or companies that make unsubstantiated claims.

Before you hire a company or a lawyer who promises they can keep you in your home without having all of the facts of your situation, consider the following news.

As foreclosure rates continue to increase and the courts are clogged with a back log of cases, one Florida judge has finally had enough. Tired of two law firms that specialize in foreclosures missing court dates or sending in unprepared underlings, Judge Campell called the firms top lawyers in to her court room. The judge stated she was sick of seeing the same cases come back to court over and over again for hearings that were not productive because the lawyers were unprepared. Both law firms heads apologized and insisted they will do better. In addition, the judge has stated that the two firms will no longer be able to call in for hearings that do not require any evidence.

The state of Florida has begun to crack down on law firms who are making unsubstantiated claims to homeowners, insisting they can help save them from foreclosure. In fact, the state has sued several firms who were charging up front fees for loan modifications. Charging up front is against Florida statues, but many local homeowners are desperate and will try anything and are often unaware of the law. Florida homeowner's are particularly susceptible to falling for schemes by companies offering to save them from foreclosure because of the continued high rate of foreclosures in the state. As many homeowners are finding themselves unable to make their monthly mortgage payments, they are attracted to companies who promise to help them keep their home. In reality, that is not always the case.

If you are struggling to make payments, hiring a Miami foreclosure lawyer can help you protect your rights and your home. However, every case is different and keeping you home may not always be an options. An experienced Miami foreclosure lawyer will explain the different options available to you and which will result int the best out come for your situation. These options may include a short sale, a loan modification or deed-in-lieu. It is important that you approach the situation with a clear view of your finances and attempt to set aside emotional attachment you might have to your home. While there are several options available to homeowners before they should consider foreclosure, it is important to have a realistic view of what you can actually afford. The final decision is yours, a Miami foreclosure lawyer can only give you advice. You must decide what is best for your family.

Links:

Judge Calls Heads of 2 Foreclosure Firms on Carpet, Revokes Their Phone-Appearance Privileges, by Martha Neil, May 5th 2011

Florida Sues Three Foreclosure Rescue Firms, by Mark Huffman, May 2nd 2011

Chase is offering short sales to delinquent Florida homeowners. Short sale is an option for homeowners who are behind on their mortgage and do not foresee themselves being able to make the payments in the near future. If you have been unemployed for an extended period of time or if you are now making far less than you were when you purchased your home, a short sale may be an option for you. A short sale will allow you to get out from under a mortgage you can no longer afford while protecting your credit as much as possible. And banking giant JP Morgan Chase has decided to sweeten the short sale process. They have decided to offer ten to twenty thousand dollars to owners who will agree to a short sale in addition to forgiving the remaining balance of the loan.

Banks never make any offers that they do not profit from, so what does JP Morgan get out of the deal? Actually, quite a bit. Florida foreclosures are notorious for taking an extended amount of time, sometimes as much as 2 years. Following the robo signing scandal last year, that process could get even longer. During the foreclosure process, the bank is not getting any payments on the mortgage. By getting homeowners to accept a short sale, the bank is avoiding having to pay fees for maintenance and property taxes on a home that could take years after the foreclosure to sell. In addition, the bank clears its financial records of bad mortgages quicker.

A JP Morgan spokesperson insists the move is intended to benefit the banks and homeowners, but would not give specific qualification requirements for the programs. Florida real estate brokers report that the offer is only extended to homeowners who live in areas with more sales and whose homes were building more recently. JP Morgan is also responding to short sale offers much more quickly than many other lenders, who sometimes take 60 to 90 days. The wait period causes many short sales to fall through as prospective buyers move on to other properties. JP Morgan is attempting to shorten that time in order to insure more short sales move forward. This step is a bold move by one of the larger mortgage holding companies in the United States.

If your family is underwater on your home mortgage and believe that a short sale might benefit you, contact a Miami foreclosure lawyer who can assess your situation. A short sale does still reflect poorly on your credit score, but is not as negative as a foreclosure. Every homeowner's situation will be different, and only a Miami foreclosure lawyer can help you make the best decision for you. Call a Miami foreclosure lawyer for a consultation before you make a final decision.

Links:

Chase offers mortgage holders a way out, by Mark Puente, April 30th 2011

The unemployment rates in Miami are consistently on the rise in today's economy. Because of this, many of the residents in Miami who own a home or multiple homes may begin considering options that will help them avoid foreclosure. One such option is that of a deed in lieu of foreclosure. What in the world is a deed in lieu of foreclosure?

A deed in lieu of foreclosure in Miami is an option when you feel that you cannot make your mortgage payments each month and wish to avoid a foreclosure in Miami. Depending on where you live, you may have different steps to follow, so while this advice is general, it is important that you speak with a deed in lieu of foreclosure attorney in Miami as soon as you see a need for one.

• A deed in lieu of foreclosure is when your bank takes the deed and forgives the remainder of the mortgage that you owe. Before you can obtain a deed in lieu of foreclosure in Miami, you will have had to exhaust every other alternative to foreclosure first. A short sale in Miami and a loan modification Miami will have been tried before attempting a deed in lieu of foreclosure.

• A deed in lieu of foreclosure is purely voluntary by both the borrower and the lender. The lender may have other requirements that need to be fulfilled in order to obtain a deed in lieu of foreclosure. Some basic requirements may include a letter sent directly to the institution of a "hardship", a hardship can include but is not limited to a divorce, loss of job and or a death in the family. You will also need to provide your lender with a list of your finances and assets.

It is essential that people understand that there are other options when it comes to a foreclosure in Miami. A deed in lieu of foreclosure will allow you to get out from under your home with minimal damage to your credit and your finances. It is also beneficial to the financial institution as it will add to their public reputation.

Seeking the advice of a deed in lieu of foreclosure attorney is an essential part of avoiding foreclosure. Because of all of the requirements needed to obtain a deed in lieu of foreclosure, it is helpful to have a deed in lieu of foreclosure lawyer to guide you step-by-step through the entire process. A deed in lieu of foreclosure attorney in Miami can make sure that you doing everything you can in order to avoid a foreclosure in Miami.