Orlando Short Sale Expert | Orlando Short Sales, Orlando Short Sale Realtor / Agent

U.S. Representative Robert Andrews (D-N.J.) and Tom Rooney (R-Fla) offered up new legislation to Congress last week. H.R. 6133, “Prompt Decision for Qualification of Short Sale Act of 2010,” is an effort from Congress to help keep potential buyers from walking away from short sales, simply because lenders take months to respond to their offers.

The National Association of REALTORS are a strong supporter of the bill. Their President, Vicki Cox Golder, said, “The short sale, which requires lender approval, is an important instrument for homeowners who owe more than their home is worth. While the lending community has worked to improve the size and training of their short sales staffs, they still have a long way to go on improving response times.”

And in a sticky financial situation such as a short sale, where time really counts, this bill comes as welcome news to many homeowners and buyers.

This legislation aims to “require the lender or servicer of a home mortgage, upon a request by the homeowner for a short sale, to make a prompt decision whether to allow the sale.” (Library of Congress)

In this bill, the terms “short sale” means the sale of the dwelling or residential real property that is subject to the mortgage, deed or trust, or other security interest that secures a residential mortgage loan that:

• will result in proceeds in an amount that is less than the remaining amount due under the mortgage loan; and
• requires authorization by the securitization vehicle or other investment vehicle or holder of the mortgage loan, or the servicer acting on behalf of such a vehicle or holder.

Ms. Golder continued, “Unfortunately, homeowners who need to execute a short sale are severely hampered because lenders (loan servicers) are unable to decide whether to approve a short sale within a reasonable amount of time. Potential homebuyers are walking away from purchasing short sale property because the lender has taken many months and still not responded to their request for an approval of a proposed short sale price. Many consumers have mentioned that the delay in short sale price approval exceeds 90 days, and in many cases never arrives.”

Hopefully, if this bill passes into law, homeowners will find relief from their mortgage woes, and will be able to sell their home without having to be foreclosed upon.

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Jerry LaRose is an Orlando Area Residential Real Estate Expert, who can assist you with the purchase and/or sale of Real Estate in Orlando, Windermere, Winter Garden, Kissimmee, St. Cloud, East Orlando, Longwood, Altamonte Springs, Maitland, Winter Park, Oviedo, Apopka, Lake Mary, Clermont, Ocoee  Florida or any place in the country. Jerry has created a team of professionals throughout Orlando and the country to ensure that you enjoy a smooth transition to your new area. Please visit http://OrlandoShortSaleExpert.com,  http://OrlandoRealEstateVoice.com ,  www.JerrySellsOrlando.com, or http://InvestmentPropertyDealsOrlando.com for your Orlando real estate needs.  Please give me a call if you have questions about the Orlando and Central Florida real estate market.

P.S. If you are listing your home as a short sale in Orange, Seminole, Polk, Lake  or Osceola County Florida and Orlando, East Orlando, St. Cloud,  Davenport, Clermont, Longwood, Windermere, Winter Garden,  Kissimmee, Winter Park, Altamonte Springs, Maitland,  Apopka,  Lake Mary, Oviedo or Ocoee Florida make sure you hire an agent who knows how to do short sales and has the experience to get the job done. We are doing successful short sale packages. Call us at 407-580-7011 to find out more about Orange County Short Sales and Orlando Area Short Sales.

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.

Sellers with a second mortgage face particular challenges if they try to walk away from a short sale without any remaining debt.

Banks usually have five 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.

In cases where the seller has a second mortgage or can’t qualify for the federal programs, I would direct  you to a real estate lawyer and a tax adviser.

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Jerry LaRose is an Orlando Area Residential Real Estate Expert, who can assist you with the purchase and/or sale of Real Estate in Orlando, Windermere, Winter Garden, Kissimmee, St. Cloud, East Orlando, Longwood, Altamonte Springs, Maitland, Winter Park, Oviedo, Apopka, Lake Mary, Clermont, Ocoee  Florida or any place in the country. Jerry has created a team of professionals throughout Orlando and the country to ensure that you enjoy a smooth transition to your new area. Please visit http://OrlandoShortSaleExpert.com or www.JerrySellsOrlando.com for your real estate needs.  Please give me a call if you have questions about the Orlando and Central Florida real estate market.

P.S. If you are listing your home as a short sale in Orange, Seminole, Polk, Lake  or Osceola County Florida and Orlando, East Orlando, St. Cloud,  Davenport, Clermont, Longwood, Windermere, Winter Garden,  Kissimmee, Winter Park, Altamonte Springs, Maitland,  Apopka,  Lake Mary, Oviedo or Ocoee Florida make sure you hire an agent who knows how to do short sales and has the experience to get the job done. We are doing successful short sale packages. Call us at 407-580-7011 to find out more about Orange County Short Sales and Orlando Area Short Sales.

A breaking new short sale trend for 2010 is shaping up that you need to know about…$500,0000+ deals.  That’s right, loans with principal balances above $500,000 are starting to default.  Bloomberg News recently reported that $500,000+ loans are defaulting more than twice as often as $250,000 or less loans.  What makes this so fascinating is that only a year ago, $500,000+ loans defaulted at a below normal rate of 4.7%.  This rapid rise in luxury house defaults is very predictable and the beginnings of the next wave of massive foreclosures that is going to slam the residential real estate market.

In 2007, we experienced the sub-prime meltdown.   The subprime debacle was the result of mortgage companies originating ARM loans to shaky borrowers.  Once the payments began adjusting upwards, the already shaky borrowers were sunk and unable to meet their new obligations.  Since the majority of these loans originated in 2005, the majority went into default at the same time and thus became known as the sub-prime meltdown.

In 2010, it is shaping up to be an Alt-A meltdown.  As you know, the peak of the real estate bubble occurred in 2005.  While subprime borrowers were slipping into ARM loans, homebuyers who wanted to buy a bigger home than they could afford began slipping into Alt A loan programs.  These borrowers were different though.  They had good credit, good income, and were a seemingly safe bet for lenders.  They just couldn’t afford the $500,000+ home that they really wanted so lenders invented interest only and option ARM loans.  These loans did not pay down the principal balance, and in the case of the option ARM loan, it actually made the loan bigger each month.  And these Alt A programs were on a 5 year clock. For example,  the borrower would have 5 years of low interest only payments and then at the 5 year mark, it would re-cast into a fully amortized loan.  That re-cast increased the payment considerably.  So do the math, 2005 plus 5 years equals…yap…2010.  So that is what is happening before our very eyes.  Great borrowers with great credit from 2005 who originated Alt A loans are now faced with a loan that is re-casting to a payment that they can’t afford.

But there’s more!  Nationwide, as a gross generalization (I know real estate is localized and this is not the case everywhere), most homes are worth less now than they were in 2005.  And interest only loans do not pay down the principle balance so whatever a borrower owed in 2005 is the exact same amount they owe in 2010.  For option ARM loans, they make actually owe more now than they did in ‘05.  Ouch!  So not only is the payment rising for Alt A loan borrowers, they are also stuck with a property that has no equity.  That’s why the number of defaults is skyrocketing.

So if you are facing any of these situations and you would like to get out but don’t know how then give me a call for a Free confidential consultation. Jerry LaRose 407-580-7011

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Jerry LaRose is an Orlando Area Residential Real Estate Expert, who can assist you with the purchase and/or sale of Real Estate in Orlando, Windermere, Winter Garden Florida or any place in the country. Jerry has created a team of professionals throughout Orlando and the country to ensure that you enjoy a smooth transition to your new area. Please visit http://OrlandoShortSaleExpert.com or www.JerrySellsOrlando.com for your real estate needs.  Please give me a call if you have questions about the Orlando and Central Florida real estate market.

P.S. If you are listing your home as a short sale in Orange or Osceola County Florida and Orlando, Windermere, Winter Garden,  Kissimmee, Winter Park, Altamonte Springs, Maitland, Lake Mary, Oviedo or Ocoee Florida make sure you hire an agent who knows how to do short sales and has the experience to get the job done. We are doing successful short sale packages. Call us at 407-580-7011 to find out more about Orange County Short Sales and Orlando Area Short Sales.