Video Summary

What is the Save Our Homes Amendment?  It is an amendment to the Florida Constitution that caps the annual increase in the assessed value of your home.  Whenever you apply for homestead exemption, you receive the Save Our Homes assessment.  This keeps your tax bill from rising, as a result of the assessment, by no more than three percent in any particular year.  Your assessment is capped at the cost of living increase or three percent, whichever is less.  These past few years it’s been very, very small.  (This amendment has been in effect, I think, since 1996 or ’98.)  But anytime that you apply for a homestead exemption, you’re entitled to the Save Our Homes Amendment which locks in your assessed valuation for the year in which you apply for homestead exemption.

They’ve added a feature to this amendment which allows you to transfer your exemption if you buy another home in Florida- that’s called portability.  You have to buy a home within two years in order to be able to transfer your Save Our Homes Amendment valuation to your new property. (There’s a formula that is pro rata if you’re upsizing or downsizing on how they calculate the benefits you have.)  If you’ve been a resident of Florida for some time, you’re able to transfer it if you buy another property here in Florida and sell your old property.  You do have to notify the property appraiser that you do wish to use portability in transferring your Save Our Homes assessment. 

So it caps your assessment and was passed back in the ‘90’s whenever we had fast depreciation, particularly in waterfront property.  People who were on fixed income were getting priced out of their homes because they couldn’t afford to pay the taxes.  So, they passed this amendment in order to keep people in their homes and not have the tax bill go so high that they couldn’t afford to stay in their homes.  The longer you stay in your home, the better you’ll like it.  Of course, with the recent decline in property values, the value of Save Our Homes has diminished substantially, but it’s always a nice in a depreciated market.  If you buy now, you’ll love it if you stay in the same house, hopefully in about five or six years when the prices take off again. 

So if you have any questions about the Save Our Homes Amendment, give me a call at (727) 847-2288.

Video Summary

  What is a deficiency judgment?  A deficiency judgment is the amount of the money judgment that a lender can obtain whenever they foreclose on the property and after the foreclosure sale. 

  The amount of the deficiency judgment is the difference between the amount that is owed to the lender at the time of the final judgment, less the market value of the property on the date of the foreclosure sale.  Many people are very concerned about deficiency judgments, but my experience has been that most lenders at this point are not pursuing deficiency judgments after they foreclose on the property. 

  Many people are very concerned about whether or not a lender can take any of their bank accounts or has a judgment against them when they file a foreclosure action. Not only does the lender not have a right to any of your money, they don’t have a judgment against you for a money judgment that can be collected against any of your assets, even after the mortgage foreclosure or the foreclosure sale. 

 In order to establish this judgment, the lender has to go through a supplemental proceeding (or a deficiency judgment proceeding) in order to establish the amount of the deficiency judgment.  This is somewhat technical and therefore many of the lenders (from my discussions with this legal community in West Pasco) have not pursued these deficiency judgments.

 So, until such time as the lender establishes deficiency judgment, you do not owe the lender any money, or it has not been reduced to a judgment amount to determine the amount of it.  Also, if you go through a foreclosure, you won’t get a 1099 because the amount has not been established.

 If you have any other questions about deficiency judgments, give me a call at (727) 847-2288.  Thank you.

Video Summary

Who can foreclose a piggyback mortgage?  Well, first let’s talk about a piggyback mortgage.  Piggyback mortgages were used to avoid having to obtain mortgage insurance whenever you acquired a home.  The purchaser would borrow 80 percent loan to value for a first mortgage, which would not require any mortgage insurance.

They would then see about getting a second mortgage, which was a home equity loan (for either 10, 15, or whatever amount they could obtain over and above the 80 percent) so they would have a very small down payment.  Home equity loans do not require mortgage insurance, so they would avoid the mortgage insurance premium that would have to be paid if they obtained, let’s say, a 95 percent loan to value.

So the question then becomes, “Well, who can foreclose?” If you don’t make the payments under the first mortgage, they have the ability to foreclose and take the property away from you.  If you don’t make the payments on the second mortgage, well, they can foreclose also.  In this day and time, though, value of property has decreased so much that there’s usually no, or very little equity in the property – so the second mortgage is basically unsecured.

The second mortgage holder (if you didn’t pay them) can sue the borrower on the promissory note and probably just avoid the foreclosure process.  The first mortgage holder could foreclose its first mortgage and include the second mortgage holder in the foreclosure action and wipe out any lien that the second mortgage holder would have.

Sometimes this is a little bit problematic when the first mortgage holder and the second mortgage holder are the same lending institution.  In this case, the question becomes, “Can they sue themselves?”  Many times they don’t, which then raises another question in the event of a foreclosure where the second mortgage is not included – whether or not you’ll have a problem if you buy the home at a foreclosure sale and be required to pay the second mortgage holder.

So an answer to the question “Who can foreclose a piggyback mortgage?” – either party can, if you default under either mortgage.

If you have any questions about foreclosures (whether it be piggyback or otherwise), give me a call at (727) 847-2288.  Thank you.

Video Summary

What’s the first thing you should do if your property’s going to go into foreclosure? Well, the first thing that I suggest you do is contact an attorney who specializes in foreclosure defense. He should be able to tell you the foreclosure process and tell you what your potential liability is for the bank coming after your other assets. Also, he can give you some idea as to how long it will take the bank to foreclose on your property, give you some kind of timeline.

You also have various options, one of which is to try and do a mortgage modification, which many people try and do before they ever contact an attorney and come in very, very frustrated. But my suggestion to you is to continue to send to the lender your financial information in order to try and do a mortgage modification. I will say that the lenders have not, in my experience, reduced your principal amount. What they try and do if they do a modification is to reduce the amount of your monthly payment rather than your principal balance. Depending on who your lender is and who the owner of your loan is, you may or may not be successful.

One of the other options is a deed in lieu of foreclosure. Chase Bank does have a program – it’s called Cash for Keys – where they may agree to give you relocation money if you deed your property over to them rather than them having to go through a foreclosure action. That program was available several months ago. I haven’t seen too much activity lately, but I know that Chase did have that program. It’s a problem if you have a second mortgage because you have to be able to transfer your property to them without a second mortgage.

The other process or option you have, which the banks really encourage, is to do a short sale, meaning that you sell the property to someone for less than the amount of money that is owed and then negotiate with the lender as to whether or not they’ll approve the sale and agree to release you from any responsibility for the remaining money that’s owed under your loan. The problem with a short sale is, you need to have some place to move once you sell your property because when you sell it – well, you no longer have a house. And so, that is something you must consider.

So, I suggest you contact a knowledgeable foreclosure defense lawyer and he will explain your various options, what your timeline is and even answer your questions as to whether or not bankruptcy is an option. If you have any more questions, give me a call and I’ll be glad to try and answer them for you. The number is (727) 847-2288.

Video Summary

When is the best time to let your house go under foreclosure? Well, that’s a very subjective question, and a lot depends upon your facts and circumstances. Many people find themselves not having the option as to whether or not to let their property go into foreclosure or not, and that if they don’t have the money to make their mortgage payments – well, it’s inevitable that it will go into foreclosure.

When is the best time to do it? You need to understand the various alternatives and the consequences of a foreclosure action; or the alternative of a short sale; or the alternative of a possible deed in lieu of a foreclosure; or even attempting to do a mortgage modification. So, the answer as to when’s the best time to let your house go into foreclosure is one that depends upon your individual circumstances. If you’re unable to make your payments because you lost your job and you’ve been unable to modify your mortgage – well, you probably want to go through a foreclosure process because of the time it takes the bank to foreclose. And you may even want to research some defenses so that you can remain in your home as long as possible.

The foreclosure process, without defense, usually runs nine months to a year. If you hire an attorney to defend you in a mortgage foreclosure, that time period can be anywhere from a year to two years, or possibly longer. Of course, there’s no guarantee, and so you should consult with an attorney whenever you’re facing a problem with your property, whether the mortgage is more than the market value and you think it’s a bad investment or whether you can’t make your payments and it looks like they’re going to be foreclosing on you. So, if you’d like to discuss the mortgage foreclosure process and your various options, give me a call at (727) 847-2288. I’ll be glad to discuss those with you. Thank you.