What Do I Need to Know About Loan Modification?
Video Summary
What do I need to know about loan modifications? Well, you probably need to know a lot. But the biggest thing you need to do is be very, very patient and very, very persistent because they are very, very hard to get. So whenever you get the information from your lender—sometimes they mail it to you to say you can do this to avoid foreclosure, or you can go on their website and have the home retention department or a collector call—get in touch with them and ask them to send you what documents you need to send them in order to try and get a mortgage modification. Whenever you complete the information and try to complete it as full as you can, completely as you can, it’s a real pain in the neck, but once you get it all completed and then you fax it to the lender, be sure you put your loan number on the bottom of every page that you fax to them because I haven’t ever been there, but rumor has it they have a common fax machine and they’ll forever tell you they didn’t get all the documentation.
So after you fax all your paperwork, count four days, and after four days, call them and say did you get everything or is there something that is missing. Be proactive. It takes time and persistence. Now, once you’ve done that, you need to calendar out in about a month. After about a month, you then need to send in new bank statements and paystubs, if you have them. And you fax them to the same number. Be sure you put your loan number on there, updated paystubs, updated bank statements.
Count four days, call them, ask them, “Did you receive everything? Is there anything else you need?” So be proactive. Continue to do this. Probably – hopefully after about six months—they will hopefully have someone actually look at your paperwork and you may have a shot of getting your mortgage modified. But you have to be persistent.
Now, don’t get your expectations up a whole lot about getting a principal reduction on your mortgage. You can ask for it. However, a lot depends on who owns your mortgage, whether it is owned by Fannie Mae and Freddie Mac or whether it’s owned by an investor, which is a trust. And it’s been my experience that the only time you get a principal reduction is whenever your loan is owned by an investor. Now, how they pick out who gets the principal reductions, I haven’t figured that out. But you’re not gonna get it necessarily.
Your chances are increased I would think if you go ahead and apply for a mortgage modification. So whenever you go about trying to get it, go ahead and start applying and keep applying, and if they turn you down, well, just turn around and apply again and pretty soon, you’ll be a master at sending the paperwork in and continue to be persistent. And then once you get your modification, well, give us a call. We’ll be glad to review it with you and then we can tell you whether it’s acceptable to you or not – acceptable to you or not acceptable, and then if they wind up filing a foreclosure action while you’re in the middle of this modification program, you have another bite at the apple, which you may be successful with is whenever a foreclosure action’s filed, to then also modify your mortgage.
Now, if you’re current with your mortgage and you want a modification, there are several programs out there for people who are current to be able to modify their mortgage to a lower interest rate, even if the value of your property is below what you owe on it, you still may be qualified and you need to contact your lender about those programs. And you have to have made all your payments for the past 12 months and be current. So if you have any questions about mortgage modifications, give me a call at (727) 847-2288. Thank you.
- Published in Real Estate - Foreclosure, Videos
2013 Estate Tax Update
Video Summary
What are the estate taxes for 2013? Everyone’s heard a lot about the fiscal cliff. Well, what happened as far as our estate taxes? They were due to be reduced to $1 million, meaning that if your estate exceeded $1 million, there would be Federal estate taxes. Well, in the bill that was passed through Congress, they adopted an exclusion for Federal estate taxes of $5 million, which takes care of most of my clients anyway. And so if you have less than $5 million in assets whenever you pass away, there is no Federal estate tax.
Florida does not have an estate tax. And in fact, the $5 million has been adjusted for inflation, so for the year 2013, you can have up to $5.25 million and have no estate taxes. It even gets better than that if you’re married and you leave all your assets to your spouse. When your spouse passes away, the two of you can leave to your children or whomever you would like up to $10.5 million. That’s called portability, meaning that the unused portion of the estate tax exemption that you did not use, that portion of the $5.25 million, can be transferred to your surviving spouse so that that can be applied to the assets which they leave behind for your children or whoever they leave them to.
So what does this mean to you? If you already have a trust, you need to call and make an appointment and come in and see about us revising your trust because more than likely, it has a provision in there that you provide that your assets are to be held in an irrevocable trust upon your death for your spouse. That was in an effort to avoid estate taxes when it was less than the present dollar amount. And you probably want your spouse to have the use of all those funds and discretion, which they will not have under your current trust provision.
So I urge you to set up an appointment to review your trust documents. So give me a call at (727) 847-2288 and I’ll be glad to check with you about the taxes and also set you up an appointment to review your trust.
What Are Some Common Types of Deeds?
Video Summary
What are some of the most common types of deeds? Well, the deed that I get questioned about the most is what some people call a quick deed when they are really referencing a quit-claim deed. A quit-claim deed is simply a deed that says I transfer to you whatever interest I have on a particular property and that is used whenever there’s uncertainty as to what your ownership may be.
The other most common deed that is used in real estate transactions whenever you’re selling something is a warranty deed, and that’s a statutory warranty deed. As it indicates, there are warranties in that you warrant of something – that you have good title to the property, you have a right to transfer possession, all these warranties go with it. There are seven of them which come through the common law and are adopted in our Florida statutes. I can’t give them all to you, but everybody now pretty much relies upon the title insurance in conjunction with the transfers under a warranty deed since you can sue the seller under the warranties. But if you have title insurance, well, you’ve got a solvent company and you don’t have to go looking for the seller or worry about whether the seller still has any money for you to sue them. So that’s the second or probably the most common deed that is used as far as selling real estate.
Also, what we’re seeing more and more of life estate deeds, and that’s sort of hard to explain, but it’s a deed whereby a person conveys to someone the property, however reserves a life estate. Well, how do you measure a life estate? Well, the person who does the conveying says, “Well, look, I’m gonna keep the property during my lifetime, and so you really don’t have any interest in this property until I die.” And so that is a life estate deed.
You may have heard the word Ladybird deed. That is a name that was affixed to what they call an enhanced life estate deed, and that was put on a publication and the person named the deeds after famous people, and that was named after Ladybird Johnson. Well, what is a Ladybird deed? Well, a Ladybird deed says that I convey to you this property after I pass away. However, I reserve the right to sell the property during my lifetime, mortgage it, or transfer it, change my mind, and I don’t have to give you any of the money if I sell the property. So it’s really considered an enhanced life estate deed because you’re just not retaining a life estate. You’re also reserving certain power. So those are probably the three most common deeds that I deal with on a day-to-day basis.
There are any number of other types of deeds that are used: special warranty deeds, trustees’ deeds, guardianship deeds, the simple deeds.
So the big thing is is if it’s a deed, it has words of conveyancing, which says that I hereby transaction, I hereby convey, I hereby quit-claim. These are all words of conveyancing, and so when they’re contained in the deed, that means they are transferring the title and the property. So if you have any questions about deeds, well, give me a call at (727) 847-2288.
- Published in Real Estate, Videos
What is a Lifetime Personal Services Contract?
Video Summary
Good afternoon. My name is Tom Mitchell. I’m a partner with the law firm of Waller & Mitchell. We’re located at 5332 Main Street in Downtown New Port Richey, Florida. I’m an elder law attorney, which means that I do wills, trusts, estates, powers of attorney, living wills, healthcare surrogates, will and trust administration, public benefits qualifications, asset protection, guardianship work. All of those things pertain to the elder law area.
It frequently comes up in my practice that we have a family that has a senior member who has to go to a nursing home. Either they’re in the nursing home now, or they’re going to be going in the next few weeks, and the family wants to try and get the individual qualified for public assistance.
There are several federal and state programs that will pay for the nursing home care of an individual who is indigent. Now, indigency is defined somewhat differently under these federal regulations than you and I might think.
Basically, a single individual can have up to $2,000.00 in assets and get $2,025 a month in income. For a married couple, the person who’s living at home, who we call the “community spouse,” can have $115,000.00 in cash assets, plus the house and the car. And the institutionalized spouse, the person in the nursing home, can only have $2,000.00.
So the problem is: what do we do if the individual is a single person, and they’re only entitled to have $2,000.00, but they have $100,000.00? Or maybe it’s a married couple, and they’re entitled to have $115,000.00, and they have $200,000.00. What do we do about that extra money, to try and get the person qualified for the Medicaid Institutional Care Program benefit, yet still get as much money as possible down to the junior generation?
Well, there’s a technique that we call a Lifetime Personal Services Contract. This comes about because even though it’s your parent, and you might provide care for them and provide management of their medical and personal needs for nothing, that isn’t the law. You’re not required to do that. And so the only thing, under the Medicaid regulations, you can’t do is give money away.
So you can’t give the money away. So what do we do? We sign a contract with one of our children that they will manage our affairs for the rest of our life, and we’re going to transfer money to them now in satisfaction of that obligation. The next question is: “Well, how much money can we transfer?”
And in doing that, we have a calculation that has worked with the Medicaid authorities for many years. Basically, what you do is – you compute the person’s life expectancy. There are tables to do that. You figure out how many hours per month you think that you’re going to be providing these services. You figure out the rate that you’re going to charge.
And currently, in this area, we use the rate that the courts allow for family member guardians. And doing that, you can come up with a number. And that number is the amount of money that can be transferred from the senior generation to the junior generation now, and not disqualify the individual for Medicaid purposes for having made a gift.
So if you’d like to investigate this, please give me a call. This is Tom Mitchell. I’m at 727-847-2288.
- Published in Medicaid Planning, Videos
What is a Special Needs Trust?
Video Summary
Good afternoon. My name is Tom Mitchell. I’m a partner in the law firm of Waller & Mitchell, and we’re located at 5332 Main Street in Downtown New Port Richey, Florida.
Did you know that ten percent of the families in America have a family member who is disabled, as defined by federal regulations? This could be a minor child who suffered malpractice at birth. It could be an adult who has been injured in a traffic accident or an industrial accident. It could be a senior citizen who has suffered neglect in a nursing home and incurred serious injuries.
If this describes anyone in your family, we at Waller & Mitchell can help you. There are federal and state programs designed to assist individuals who have these kinds of injuries and require special assistance. These programs are all means-tested. That means that you cannot have more than a certain amount of money and be qualified for these programs.
When these types of injuries happen to someone, typically there is a lawsuit filed on behalf of the injured party. And this lawsuit can result in hundreds of thousands or, in some cases, even millions of dollars that are to be made available to that person. The problem is twofold.
First, that money has to last for the entire lifetime of the individual. And, second of all, if they receive that money in their individual names, they will be disqualified from public assistance benefits because of the means testing that I mentioned earlier.
There is, however, a special kind of trust authorized under federal law that’s called a Special Needs Trust. In a Special Needs Trust, the money from the lawsuit settlement can be deposited to the trust account, and a trustee can be named, and the trustee can then pay for the special needs of the individual. The public benefits are still qualified for the individual, and they will pick up the basic nursing home and medical care.
What this allows for is that the special needs of the individual can be met – such things as advanced medical care, special caregiver services, education, entertainment. Any of those things would qualify.
In addition, with a Special Needs Trust, you can have a trust that’s set up by a third party. For example, a grandparent who has a disabled grandchild. In that circumstance, the grandparent sets up the trust, puts the money in the trust, and then the trustee administers the trust for the benefit of the injured party.
The injured party continues to receive their public benefits, so we don’t have any problem with the money being diverted or expended unnecessarily. And the good thing about the third public trust is that after the death of the beneficiary, the disabled child, the original person who set up the trust can put in the trust where that money is to go if there’s anything left.
So if you’re interested in any of these concepts, give me a call. I’m Tom Mitchell. My number is 727-847-2288.