Florida Foreclosure Cases Will Still Head to Court

In a victory for all Floridians, a piece of legislation that was backed by the Florida Banker’s Association died today in the Florida House of Representatives.

The controversial piece of legislation would have weakened the voices of the many distressed homeowners in Florida by depriving them of their basic due process rights to a hearing, and notice. If this bill had passed, the balance of power on foreclosures would have swung almost entirely in the bank’s favor, leaving the homeowner with little to no recourse to fight to save his home.

As reported in the Miami Herald, the Florida House of Representatives Criminal and Civil Justice Policy Council ended its session without hearing the controversy foreclosure bill.

The proposed bill would have allowed banks to skip legal proceedings all together unless the homeowner requested that the foreclosure go through the legal system. Such a bill would only further the struggles many homeowners are experiencing by significantly shortening the foreclosure process thereby making it more difficult to save the home.

Of significance, the proposed bill would have allowed homeowners to go to court, and avoid the non-judicial foreclosure process, only if they made a request within the first 20 days of the foreclosure process. That particular provision is indicative of the importance of immediately contacting our office upon receipt of any foreclosure related papers so as to best assess what options you may have to defend the foreclosure.

This fight, however, is not over. The banks will again attempt to pass this bill through the current legislative session. Please check our blog frequently for updates regarding this important piece of legislation.

If you, or a loved one, are facing foreclosure, please contact us today to discuss your situation in greater detail.

Miami Foreclosures Stem from Multiple Factors

The Florida Realtors recently released a report revealing that those that fell into foreclosure typically had one more reason other than a job loss or bad loan.

“Contrary to what some researchers have argued, many Florida homeowners were not driven into foreclosure by simply being trapped in bad loans, or losing their jobs or taking pay cuts,” said Joel Searby of Strategic Guidance Systems. “What we found in talking with people who’ve gone through foreclosure is that there’s a `plus one’ factor,’ ” meaning job loss coupled with other circumstances such as divorce or health problems usually led to homeowner distress.

Not surprisingly, the study also revealed the far reach of the foreclosure epidemic in that foreclosures have impacted homeowners across a broad range of incomes and demographic backgrounds. After researching many of the markets with the highest rates of foreclosures, including Miami, from March 2006 through February 2009, the report made the following findings:

• More than 20 percent of homeowners who were foreclosed upon had household incomes ranging from $50,000 to $75,000. Another 20 percent had incomes in excess of $100,000.

• One in four Floridians facing foreclosure were college grads. Another 30 percent had at least some college education.

• Ninety-two percent of foreclosed-upon Floridians were married homeowners, and 8 percent were single. Nearly two-thirds of Florida foreclosure cases involved families with children.

• Thirty-five percent of those in foreclosure had lived in their homes for 10 years or more. More than 40 percent had lived in the homes fewer than 5 years.

If you or someone you know is facing foreclosure, please contact our office today to schedule an appointment so that we may assist you in addressing your foreclosure related concerns. You can reach us at 305-263-7700.

Foreclosure Has Consequences with Uncle Sam

With tax season upon us, many homeowners are confronted with the reality that they may have to pay taxes for some of the mortgage debt that was forgiven during a foreclosure. A recent CNNMoney.com report discusses this unfortunate trend.

As reported by CNNMoney.com, it is IRS policy to tax forgiven debt you are personally responsible for as if it is income. Say, for example, your credit card company settled a $10,000 debt for 50 cents on the dollar. You’d have a debt forgiveness of $5,000, which the IRS would count as income, just like your wages.

The same policy held true for most mortgage debt until 2007, when Congress passed the Mortgage Forgiveness Debt Act. That ended the liability for many homeowners — but not all.

In general, if you lose your home to foreclosure or short sale, where you sell your home for less than you owe, the IRS won’t add insult to injury by counting the difference as income. At least until 2012.

However, there are four major exceptions to the rule:

1. You did a cash-out refinance and splurged.
2. You have a home-equity line of credit.
3. You lost your vacation home or investment property.
4. You owned a multi-million-dollar home.

Please contact our office today to discuss foreclosure related issues with you in greater detail. You can reach us by calling us at 305-263-7700.

South Florida Real Estates Sales Are Up As Foreclosures Steady

foreclosure 001.jpgAccording to the National Association of Realtors, sales of existing homes and condos in Miami-Dade, Broward and Palm Beach county rose 27% in April.

Additionally, and another positive trend, last month’s statewide existing home median price of $140,100 was 1% higher than the statewide median price in April of 2009. While the median price for single family homes also rose, the same can’t be said for condos. Statewide, condo prices fell 1%, to $79,300 from $79,000.

In the tri-county area, Miami saw the smallest increase in home sales in April. There were 594 sales, up 7% from 555 in April of 2009. The median price was up 8%, to $192,000 from $177,000.

There several factors behind these positive numbers. We previously anticipated this news, and discussed many of the many positive factors that are behind the recent news regarding the trends in the Miami, and South Florida, real estate market.

As for some of the reasons behind this trend, they include the following:

• The recent expiration of certain tax credits forced many to buy before the tax credit expired.
• We’re starting to see a stabilization of home prices.
• Home prices are starting to stabilize because inventory levels are starting to fall.
• Inventory levels are starting to fall because foreclosures are being absorbed in the market at manageable levels.

If you wish to discuss this article, or your real estate needs in general, please contact our office today to discuss further. Our phone number is 305-263-7700.