Posted on 03/28/2011 7:16:39 AM PDT by dawn53
Think of it as Act 2 of Florida's foreclosure crisis.
In the first act, borrowers lose their homes.
In the next, lenders come after them for the debt still owed.
Unlike a foreclosure, which homeowners dread but expect once they stop making payments, deficiency actions can sneak up on people who thought their problems were behind them when they handed over the house keys.
"People have no idea of all the trouble that's coming," said Margery Golant, a lawyer in Broward County who is handling a growing number of deficiency defense cases.
(Excerpt) Read more at tampabay.com ...
“bank approved short sale, but were hit with a deficiency judgment”
Most States allow this. The bank can still claim you owe them the short sale difference. If you had a $100 mortgage but sold for $75, you owe the bank $25.
Also the bank can issue an IRS form 1099 if they write off that $25, claiming you basically were given $25 and must pay income tax on it.
Another part of the problem, is that many (in my experience) real estate agents -- especially in states where attorneys are not regularly involved in real estate transactions -- do more harm than good because they don't really know the law (they're rarely attorneys in those states), and are too reluctant to refer a client to a real estate (or bankruptcy) lawyer when it would make sense. Sometimes, sadly, the most well-meaning are the most dangerous because they want to give good advice, but the advice is either wrong, or incomplete.
‘Market rate is now higher for everyone. Check out what PMI has done in the past couple of years for example. “
Well perhaps we should all do a class action against the banks for the fraudulent, illegal, and downright stupid business practices they had for the last 10 years.
The IRS was forgiving 1099’s from banks last year.
“we should all do a class action against the banks for the fraudulent, illegal, and downright stupid business practices they had for the last 10 years.”
Well not being argumentative; but what have they done to hurt you?
Bottom line is that the market place has cleaned up most of the problems already in my opinion.
Just deed the property back to whoever the assigns is and walk. There is no foreclosure so there can be no deficit. Make sure you take lots of pictures of the property with witnesses when you leave, and call the local cops and inform them it is vacant.
Cancellation of debt income will be in effect through 2012, but ONLY on mortgages for personal residences. Check the regs, as the amount is limited.
Best rule of thumb, never trust a realtor, they misrepresent both sides, and are in it for the money. Hire an attorney in a short sell. Never let they property go to foreclosure, deed it back.
You’re right. I’ve worked with Realtors that are dumb as a box of rocks and will say/do anything while keeping an eye on only their ‘fee’ ‘commission’.
The first thing I have done (not too active at the moment) regarding a short sale is to prepare the client(s)mentally and tell them that I am neither an attorney nor a CPA and that they should seek the advice of those professions. However, there are some things that Realtors can do and should do (imo).
The real estate industry is just as responsible for the current condition of the market as the lenders, banks and mortgage brokers (particularly the mortgage brokers). It’s a dirty, corrupt business and still is, with prices still being inflated over current value just to get the deal done.
Realtors that are under agency are legally obligated to represent one or the other (or can be neutral). On occasion in ‘dual’ agency both sides, are being ‘serviced’ with full disclosure to each party. That’s the way it is in Missouri. But the advice regarding seeking an attorney is absolutely valid but attorneys are not looked at any more favorably than Realtors (at least that’s been my experience). Most of my clients do not wish to seek out an attorneys advice.
People sometimes confuse legality with morality. Legal stealing is no less immoral than the illegal sort.
I would not do it and yes indeed, I believe that makes me the better person for it.
Anybody who wants too, just go ahead and flame away, I'm not scared of F.R. members flames, it's those eternal ones, that literally scare the hell out of me.
Risk is inherent in borrowing and lending. Banks want the govt to protect them from all the consequences of losses. Screw ‘em.
“Well not being argumentative; but what have they done to hurt you?”
Well they:
1) accepted massive bailouts from the govt
2) put us into a massive recession
3) bought numerous politicians thereby subverting our govt and the rule of law
4) failed to properly care of houses they owned in my neighborhood thereby further reducing the value of my property
The list is long. The problem isn’t cleaned up until some banks do jail time.
The stories of the banks illegal and immoral activities are long and distinguished.
The banks no not deal in good faith with homeowners trying to work out deals.
The banks are willing to use the law to protect themselves, why shouldn’t the borrowers? Don’t borrowers deserve equal protection under the law? Seems like I’ve read that somewhere.
Well just a couple quick points.
Any bailout money has been repaid a large profit to the govt.
Banks did not put this nation into a recession; people pulling back from spending $$ they didn’t have is what started things.
3) every industry “has politicians in their pocket”
4) Did people complain when loans were made to make house prices go up? And what about all the other positive economic affects on the way up during the bubble times?
It does not do your profession on bit of good to adverstise now might be a good time to buy with the market still headed south. As a note of truth, I was a member of the board realtors for years as well as the chamber of commerce, I am ashame of both.
People will file for bankruptcy. The banks and mortgage companies are getting greedy over deficiency judgments.
It is most definitely a ‘buyers’ market. Foreclosures constitute a huge percentage of the current sales trend. I’m doing a BPO now for a property in a small town and in the previous 6 month sales period, 50% were foreclosures. Stunning really.
Disgusted is what we should be; not ashamed.
“Any bailout money has been repaid a large profit to the govt.”
And yet small business owners cannot get a loan. But banks will give loans to companies in foreign countries.
“Banks did not put this nation into a recession”
What the banks did led to the recession. People want to blame the govt, but the govt was only doing what the banks paid them to do.
Nobody complained when prices were going except people who were trying to buy with real numbers in mind. The banks pushed the numbers up because of the obscene profits they were making.
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