Video Summary

What is a lease option?  Well, I like to rephrase that clause, and I’ll explain later that saying.  It should be a lease with an option to purchase.  It’s utilized whenever you want someone to purchase some property; however, they don’t have a lot of money to put down on the property, and they’re not able to obtain financing to purchase property for cash, yet they want to move into the property.  So what you do is you enter into a lease to lease them the property for a certain period of time, and then you attach to that an option to purchase.  Well, what does the option do?

It sets the price of a certain dollar amount so during the option period, which usually coincides with the lease term, the tenant is in a position to purchase the property for that amount.  So you have someone that is recovering from a foreclosure that needs some additional time to get their credit back up so they can go get a bank loan is one circumstance.  Other circumstances would be if they’re looking for the down payment to come as a result of a lawsuit settlement, or there are any number of scenarios wherein the parties do not have a sufficient down payment to be able to purchase the property.  And if you have a mortgage on the property, you’re not in a position to take back a mortgage, or if you did, it would be a wraparound mortgage.

Now one of the advantages over a lease with the option to purchase versus a sale of the property under an agreement per deed or a deed in mortgage is that the foreclosure process takes about a year to accomplish, and is very expensive.  It will probably cost in the neighborhood of $3,500.00 to $5,000.00 to foreclose.  Whereas with a lease with an option to purchase, you’re looking at an eviction action, which would take approximately 30 to 45 days in which to get rid of the tenant if they failed to make the payments.

Now the term “lease option” is a problem if you combine the lease payments with the option payments.  Then it can be considered an agreement for deed, and you can be required to foreclose those.  So it’s very important that if you’re going to enter into a lease with an option to purchase that you specify or keep the option separate from the lease.  Although it would be contained in the lease, it needs to be very clear that they are two separate rights: one is tenancy, and the other is the option to purchase.

So if you’re interested in selling your property under a lease with an option to purchase, well, give me a call at 727-847-2288.  If you’re going to enter into a lease with an option to purchase, and you’re concerned about the landlord, I suggest you give me a call, and it might do well to do a title search to make sure that the property isn’t in foreclosure; that the mortgage on the property does not exceed the purchase price.  So that once you’re in a position to purchase the property, you know that the seller will be in a position to sell it to you.

So if you have questions, give me a call at 847-2288.

Thank you.

Video Summary

Does a final judgment of divorce convey real property?  It can convey real property; however you have to have express language that the judgment serves as a conveyance.  In particular when we have these final judgments that are done by the parties rarely do they provide for the judgment to serve as a conveyance of the property to the one particular spouse who’s supposed to receive it.

Some of the final judgments I see prepared by divorce counsel they say that the other party is to execute a deed conveying the real property.  So the proper language that needs to be incorporated in a final judgment of a divorce is that the judgment serves as a conveyance to real property from one spouse to the other. So if you want the final judgment to convey real property to one spouse, to the other you need to pay particular attention to the wording in the final judgment.

There is language that can be used in deeds whereby a spouse conveys their interest to the other spouse. If there’s a mortgage on the property ordinarily they would require documentary stamps.  However, if it is their homestead property and it is being conveyed pursuant to a marital settlement agreement and divorce proceeding then the Department of Revenue does not require the documentary stamp be placed on the conveyance.

If, however, we have more property than just the home then other property that is conveyed from one spouse to the other, pursuant to a marital settlement agreement, would require documentary stamps on the transfer based upon one-half of the unpaid balance of the mortgage that encumbers it.  If there’s no mortgage on the property then there would not be any documentary stamps.

So if you are getting divorced and you want the final judgment of divorce to convey the real property from one spouse to the other you need to pay particular attention to the judgment that is entered.  And it is a great idea to provide for that so that there is not a problem with judgments attaching to the spouse who is supposed to convey the property, their interest after their divorced or preexisting judgments.

So if you need some help with that well give me a call at 727-847-2288.

Video Summary

What happens to past due property tax when I short sell the home? Well that’s a fairly easy one. It’s when you short sell your home the property taxes are paid out of closing money and it reduces the amount that your lender receives or agrees to take in satisfaction of their lien and hopefully releases you from any liability on the loan. So those taxes are paid just like any other closing, when you close on your property and sell it to someone else. The back due taxes are paid, since they’re a lien against the real property rather than your personal obligation. So they are all taken care of and it is only up to you to negotiate with your lender that they’ll take the net proceeds less the payment of the real property taxes in satisfaction of the mortgage.

So if you have any questions, well give me a call at 727-847-2288.

Video Summary

Does transferring your property relieve you of the financial obligations of a promissory note and mortgage? The answer is no. When you sign a note and mortgage, you sign the note that says, “I promise to pay you, the bank, or a lender, the money, plus interest,” and it outlines the payments. Then you also sign another document, a mortgage, which is a lien against the property so that if the payments are not made on the promissory note, then the lender is in a position to foreclose and take the property away from the owner.  So by transferring the property to a third party or to an entity, the bank still has a lien against the property since the lien was recorded before the conveyance and you still have the responsibility under the promissory note. 

This is particularly frustrating when you have what they call a “white knight” who says, “Oh, I’ll help you with your foreclosure action.  Just deed me the property and I’ll see about trying to make the payments or get the payments paid.”  Well, what that does is you lose control of the property but you still have the liability under the promissory note and it still affects your credit.

So transferring property or some people would say deeding your property to a third party, does not relieve you of any debt on the property and you can still be sued and be held responsible for the promissory note if the lender so elects. 

So if you have any more questions about transferring the property, trying to avoid liability under your note and mortgage, give me a call at (727) 847-2288. Thank you.

Video Summary

What is the significance of recording a satisfaction of mortgage? Well, the significance is it means you paid the thing off and so that’s just terrific! And so by recording a satisfaction, the lender signs it and you put it in the public record that shows that the mortgage is no longer a lien against your property. Many people talk about taking a name off of a deed or satisfying a mortgage, the way the official record books operate is you put documents in the official record books and you never take them out, and so then you simply file another document to show a change in the chain of title for whenever does a title search. 

So by recording a satisfaction of mortgage, it shows in the public records there’s no longer a lien, and they usually state that the debt has been paid in full. Certainly if you do pay your mortgage off, you’ll want to obtain the promissory note and ask that it be paid because it is considered sometimes a negotiable instrument so that’s important to have. But the satisfaction of mortgage indicates that there’s no lien on the property and does indicate that the lender has probably been paid in full. Hopefully you have a satisfaction of mortgage that you need to record, but if you have any questions about it, give me a call at 727-847-2288. 

Thank you.