You are seven months behind in your mortage payments to your first and second mortgage
and in fear of a foreclosure complaint being served upon you. A company then contacts you
stating they will handle the short sale of your property,claiming it will be a smooth process.
The company requires that you leave the property and also deed your residence to them. They
give you a check for $2,000.00 and you feel secure that you will not have any liability for your
two mortgage payments.
Well, the company will simply rent your house to a third party until your house has been
sold at a foreclosure auction which could take up to two years after you have left your home.
In addition, the unscrupulous company ,who you believe is there to protect your interests,will
attempt to short sell the property and keep the monies paid by lenders as a short sale incentive.
Often, the short sale will never be accomplished and months or even years later, you will be served
with a foreclosure by the lender for the property,which you thought had taken care of by the company
which had paid you the monies to leave the property.
In May 2012, an owner of a company in South Florida was arrested for scamming dozens of individuals
who deeded their property to the company with a promise of a "short sale" and no liability on their
mortgages for the property. A short sale is often a poor scenario to resolve the negative equity issues of owners of real property. Please contact the law office of John E. Mufson P.A. at 561-272-1003 to discuss
the ramifications of a short sale.
Tuesday, May 22, 2012
Tuesday, April 3, 2012
The Goal of Retaining your Property in Bankruptcy.
Often an individual seeking to file bankruptcy in Florida is often fearful of having some or all of their property seized by the trustee. In most chapter 7 cases handled by a competent attorney, the debtor will
be able to retain ownership of their real and personal property while discharging their unsecured
debts. With respect to household furnishings and appliances,the items will in many cases fall within the allowed exemption of $1,000.00 for individuals and $2,000.00 for married couples. Only where the residence contains antiques,collectibles or an expensive piano will there be an issue with respect to the allowed exemption.Also,if the debtor is renting or surrendering their home through foreclosure the the "wildcard" exemption is applied and which is $5,000.00 per individual and $10,000.00 per married couple.
For motor vehicles the allowed exemption is $1,000 unless you are renting,whereby you can then use the $5,000/$10,000 wildcard exemptions. As the value of used cars has increased significantly since the March 2011 earthquake in Japan, it has become more difficult for a debtor with equity in their car to file Chapter 7. If a debtor has a car with $5,000 in non exempt equity in a car, in order to keep the car,they will have to either borrow money from a relative or take money out of a 401K/IRA to pay the trustee the non exempt value.
Sometimes,a debtor is unable to use either of these options and thus does not want to file Chapter 7. The other option would be to file bankruptcy under Chapter 13. Thus, if the debtor has $15,000 in equity in two cars, the debtor would remit ($15,000 divided by 60 months) for a total of $250.00
per month plus an additional $25.00 to the Chapter 13 trustee who administers the case. In addition,the debtor would have to be able to establish that they have the ability to make the chapter 13 payments.
If you need further information about property exemptions, please contact the law office of John E. Mufson P.A. at mufsonlaw@aol.com
be able to retain ownership of their real and personal property while discharging their unsecured
debts. With respect to household furnishings and appliances,the items will in many cases fall within the allowed exemption of $1,000.00 for individuals and $2,000.00 for married couples. Only where the residence contains antiques,collectibles or an expensive piano will there be an issue with respect to the allowed exemption.Also,if the debtor is renting or surrendering their home through foreclosure the the "wildcard" exemption is applied and which is $5,000.00 per individual and $10,000.00 per married couple.
For motor vehicles the allowed exemption is $1,000 unless you are renting,whereby you can then use the $5,000/$10,000 wildcard exemptions. As the value of used cars has increased significantly since the March 2011 earthquake in Japan, it has become more difficult for a debtor with equity in their car to file Chapter 7. If a debtor has a car with $5,000 in non exempt equity in a car, in order to keep the car,they will have to either borrow money from a relative or take money out of a 401K/IRA to pay the trustee the non exempt value.
Sometimes,a debtor is unable to use either of these options and thus does not want to file Chapter 7. The other option would be to file bankruptcy under Chapter 13. Thus, if the debtor has $15,000 in equity in two cars, the debtor would remit ($15,000 divided by 60 months) for a total of $250.00
per month plus an additional $25.00 to the Chapter 13 trustee who administers the case. In addition,the debtor would have to be able to establish that they have the ability to make the chapter 13 payments.
If you need further information about property exemptions, please contact the law office of John E. Mufson P.A. at mufsonlaw@aol.com
Monday, January 16, 2012
The Strategic Foreclosure
Millions of homeowners in Florida now own a primary residence with negative equity.
Many owners have two mortgages and the combined balances on them are so great,that
it will take as long as 20 years to realize positive equity in the property.Thus, the owner must
explore all options with respect to the debt. Important consideration should be given to situations
where either the owner will need to relocate or retire in five years. Continued payment of the first and second mortgages for a period of three to five years still will not allow the owner to complete
a conventional sale.
As wages and retirement plans are not growing at anticipated rates,an owner should strongly
consider a strategic foreclosure. Thus ,while the owner can afford the mortgage payments, he or she will have to attempt a "short sale" to sell the property if required to relocate. By choosing not to pay mortgage payments, a owner may be able to save money to relocate and in some cases pay "cash" for another property, thus enjoying substantial costs in the ownership of a home.
Two obvious questions arise, first the issue of liability of the owner on the mortgages and second,
the affect on the owner's credit score.In Florida,most foreclosures of a first mortgage are "in rem",
meaning that the lender will not pursue a monetary judgment against the owner and will proceed
only to take back ownership of the property.
If there is a second mortgage,most likely the lender will accept settlement from the owner at a deep discount form the balance owed, sometimes as highas 90% off the balance.While the owner's credit score will drop, he or she will still have use of all their credit cards, however there may reductions in the credit limits.
A viable option is the filing of either a Chapter 7 or Chapter 13 bankruptcy which will delay
the foreclosure process. In a chapter 13, which usually involves a 60 month payment plan of debt, the owner in some instances may "strip" a second mortgage, whereby at the end of the 60 months, only the first mortgage remains as a lien on owner's property. In either Bankruptcies,the owner will have to include all credit card and other unsecured debts.
A strategic foreclosure alone or in combination with filing bankruptcy may be a solution.
Please contact the law office of John E. Mufson at 561-272-1003 for all other questions.
Many owners have two mortgages and the combined balances on them are so great,that
it will take as long as 20 years to realize positive equity in the property.Thus, the owner must
explore all options with respect to the debt. Important consideration should be given to situations
where either the owner will need to relocate or retire in five years. Continued payment of the first and second mortgages for a period of three to five years still will not allow the owner to complete
a conventional sale.
As wages and retirement plans are not growing at anticipated rates,an owner should strongly
consider a strategic foreclosure. Thus ,while the owner can afford the mortgage payments, he or she will have to attempt a "short sale" to sell the property if required to relocate. By choosing not to pay mortgage payments, a owner may be able to save money to relocate and in some cases pay "cash" for another property, thus enjoying substantial costs in the ownership of a home.
Two obvious questions arise, first the issue of liability of the owner on the mortgages and second,
the affect on the owner's credit score.In Florida,most foreclosures of a first mortgage are "in rem",
meaning that the lender will not pursue a monetary judgment against the owner and will proceed
only to take back ownership of the property.
If there is a second mortgage,most likely the lender will accept settlement from the owner at a deep discount form the balance owed, sometimes as highas 90% off the balance.While the owner's credit score will drop, he or she will still have use of all their credit cards, however there may reductions in the credit limits.
A viable option is the filing of either a Chapter 7 or Chapter 13 bankruptcy which will delay
the foreclosure process. In a chapter 13, which usually involves a 60 month payment plan of debt, the owner in some instances may "strip" a second mortgage, whereby at the end of the 60 months, only the first mortgage remains as a lien on owner's property. In either Bankruptcies,the owner will have to include all credit card and other unsecured debts.
A strategic foreclosure alone or in combination with filing bankruptcy may be a solution.
Please contact the law office of John E. Mufson at 561-272-1003 for all other questions.
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