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Teresa Turner, Realtor & Broker, with The Teresa Turner Realty Group at Keller Williams Town & Country Realty, is one of the most established and respected names in NW Florida Real Estate with 25+ years of experience in Residential Real Estate. Over that time, she has developed a superior pipeline of connections and is the go-to person for getting results in Residential Real Estate. She understands and cares for people and is excellent at coming up with unique marketing strategies to solve complex problems and get homes sold. She keeps your personal information confidential and considers discretion to be her duty in dealing with your real estate situation. Teresa maintains a strong work ethic and is committed to building relationships based on trust and integrity. She is a Real Person with Real Solutions to your real estate needs.
Tag Archives: equator short sales
Formula for Successful Short Sale
Everyone has heard a Short Sale horror story or two. However, the reality is that Short Sales are here to stay and we are experiencing more success for both buyers and sellers than failure. The banks have gotten much more streamlined with their Short Sale processes and the length of time to close them has decreased as well.
What you need to know most is for your transaction to be successful there’s a formula…2 good & knowledgeable agents (Buyer’s Agent and Listing Agent) + a cooperative bank with a good process in place + very patient buyers = Short Sale Success!
Understand the Language of Distressed Properties
Bank-owned /real estate–owned (REO): Properties that have been taken back by the lender during the legal foreclosure proceeding to become an asset of the lender bank.
Broker price opinion (BPO): When the estimated value of a property is determined by a real estate broker or firm based on property characteristics, appropriate comparable properties, and market analysis.
Deed-in-lieu (DIL) of foreclosure: When borrowers can no longer make their mortgage payments, a DIL transfers ownership of a property to the lender, allowing the home owner to avoid foreclosure.
Distressed property: A property that is under a foreclosure order (pre-foreclosure), has undergone the foreclosure process, and is now an REO, or is being marketed as a short sale.(See lender-mediated properties.) Historically, this has also referred to properties in dilapidated condition.
Distressed sellers: Home owners in default on their mortgage or at risk of becoming late on their mortgage payments, due to financial hardship.
Forbearance: A reduction or suspension of loan payments as agreed upon by the lender for a predetermined period of time.
Foreclosure: The legal process in which a lender takes possession of a property as a result of a mortgage default by the owner-borrower.
Home Affordable Foreclosure Alternatives (HAFA): A federal program for home owners who can no longer afford their mortgage.HAFA provides two options for transitioning out of a mortgage: a short sale or a deed-in-lieu of foreclosure.
Eligibility requirements:
- You live in the home or have lived there within the last 12 months.
- You have a documented financial hardship.
- You have not purchased a new house within the last 12 months.
- Your first mortgage is less than $729,750.
- You obtained your mortgage on or before January 1, 2009.
- You must not have been convicted within the last 10 years of felony larceny, theft, fraud, forgery, money laundering, or tax evasion in connection with a mortgage or real estate transaction.
Home Affordable Modification Program (HAMP): A federal program that provides foreclosure-prevention initiatives to help borrowers in or at risk of default avoid foreclosure via loan modification or principal reduction to lower their monthly mortgage payments. The FHA and VA also offer HAMP programs for struggling home owners. See second-lien modification program.
Eligibility requirements:
• You obtained your mortgage on or before January 1, 2009.
• You have a mortgage payment that is more than 31 percent of your monthly gross (pre-tax) income.
• You owe up to $729,750 on your home.
• You have a financial hardship and are either delinquent or in danger of falling behind.
• You have sufficient documented income to support the modified payment.
• You must not have been convicted within the last 10 years of felony larceny, theft, fraud or forgery, money laundering or tax evasion, in connection with a mortgage or real estate transaction.
Home Affordable Refinance Program (HARP): A federal program for mortgage borrowers who are current on their payments but having trouble acquiring traditional refinancing because the value of their home has declined. These borrowers are usually underwater, meaning they own more on their mortgage than what their home is currently worth.
Eligibility requirements:
- The mortgage must be owned or guaranteed by Freddie Mac or Fannie Mae.
- The mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009.
- The mortgage cannot have been refinanced under HARP previously unless it is a Fannie Mae loan that was refinanced under HARP from March-May, 2009.
- The current loan-to-value (LTV) ratio must be greater than 80%.
- The borrower must be current on the mortgage at the time of the refinance, with a good payment history in the past 12 months.
Insolvency: When a borrower does not have enough liquid assets to pay down a mortgage.
Lender-mediated properties: Homes that are in the pre-foreclosure process, are already bank-owned, or are subject to a lender-approved short sale.
Loan modification: Changes to the loan terms and conditions to reduce monthly payments for the borrower.
Portfolio loan:A loan or asset owned and controlled in-house by the lender itself.
Principal Reduction Alternative (PRA): A federal program forhome owners who owe significantly more on their mortgage than what their home is currently worth. The program encourages non-GSE mortgage servicers and investors to reduce the principal loan amount.
Eligibility requirements:
- Your mortgage is not owned or guaranteed by Fannie Mae or Freddie Mac.
- You owe more than your home is worth.
- You occupy the house as your primary residence.
- You obtained your mortgage on or before January 1, 2009.
- Your mortgage payment is more than 31 percent of your gross (pre-tax) monthly income.
- You owe up to $729,750 on your 1st mortgage.
- You have a financial hardship and are either delinquent or in danger of falling behind.
- You have sufficient, documented income to support the modified payment.
- You must not have been convicted within the last 10 years of felony larceny, theft, fraud or forgery, money laundering, or tax evasion, in connection with a mortgage or real estate transaction.
Refinance: The replacement of a loan (mortgage) with a new loan at a lower interest rate and under different terms and conditions, often reducing monthly payments, the term of the loan, or the loan risk.
Second Lien Modification Program (2MP): A federal program for borrowers who have two mortgages on the same property and the first mortgage was permanently modified under HAMP. 2MP provides a modification or principal reduction on the second mortgage as well.
Eligibility requirements:
- Your first mortgage was modified under HAMP.
- You must not have been convicted within the last 10 years of felony larceny, theft, fraud or forgery, money laundering or tax evasion, in connection with a mortgage or real estate transaction.
- You have not missed three consecutive monthly payments on your HAMP modification.
Servicing agent: A lender or other entity that services a loan or asset on behalf of the investor that owns the loan. Often, the lender that originates the loan is neither the owner nor the servicer.
Shadow inventory:The cache of homes that have undergone the foreclosure process and are on the balance sheets of banks and GSEs but are not yet on the market for resale.
Short sale:A property transaction in which the lender or lenders agree to accept less than what is owed by the current home owner. Because the net proceeds from the sale are not enough to cover the sellers’ mortgage obligations, the difference is forgiven by the lender, or other arrangements are made with the lender to settle the remainder of the debt.
Workout sale: A situation in which the lender agrees not to move forward with foreclosure proceedings for a specific period of time, allowing the home owner to sell the property and pay off the loan.
Information provided by: National Association of Realtors 2/2012
Understand the difference between a “backup contract” vs “multiple contract”
Most short sale addenda have provisions for backup offers if your Realtor checks the appropriate box. It is the opinion of Berlin-Patten Attorneys that, generally speaking, your Realtor should not check the box permitting backup offers when dealing with a short sale. It creates too many unnecessary legal and practical issues.
Most importantly, many lenders and their automated systems (such as Equator) will not allow two contracts to be under review simultaneously. As such, once a second contract is presented to the lender, the time frames run anew with that second contract. Moreover it has been have found that the two buyers are not adequately counseled with respect to the implications of permitting two or more contracts, and it is the attorney’s universal experience that one buyer will be very unhappy (sometimes to the point of legal threats) when all is said and done. In other words, the buyer with the lower offer will obviously have an issue if a higher offer is subsequently submitted to the lender. As such, if the seller is going to entertain more than one contract, they had better do so very carefully, with proper legal counsel, and with adequate disclosure.
There are also significant legal considerations. For example, one needs to understand the difference between “backup” contracts and “multiple” contracts. There is a significant legal distinction, a distinction that is important to understand when encouraging more than one contract for the same property at the same time. A backup contract is just that, a contract that is clearly subordinate to a prior contract. It contains a backup contract addendum or similar verbiage that makes it clearly subject to a prior contract. If, however, two contracts are executed for the same property, and neither contains a backup contract addendum or similar verbiage, this is a multiple contract situation and potentially creates significant legal liability to not only the seller, but the realtors as well. You cannot have two valid contracts for the same property without backup language in one of them.
As such, we strongly encourage any party who is considering the execution of more than one contract to consult with an attorney to determine (a) is it the best thing to do under the circumstances, (b) do they have the right to do so, (c) is the prior contract still in full force and effect, (d) if so, does it permit backup contracts, and (e) is adequate backup contract language contained within the second contract. Each of these decisions carry significant timing, factual and legal implications, and should not be taken lightly.
Information provided by Berlin-Patten, PLLC, Attorneys at Law
You may owe federal income taxes in 2013 if you have a short sale
You may owe federal income taxes in 2013 if you have a short sale on your primary residence after this 
year. Now is the time to make the hard decision: Are you going to short sale your home this year?
Uncle Sam is still giving homeowners until Dec. 31, 2012, to go through a short sale on their primary residence without tax consequences – as long as the lender officially releases the debt.
But on Jan. 1, 2013, the rules change: The amount a lender forgives, ether in a short sale on a primary residence will be taxable on federal income taxes.
So if a house sold $50,000 short of what is owed on the mortgage, then the selling homeowners will owe federal income taxes on that $50,000. Homeowners would owe $12,500 if they’re in the 25 percent bracket; $7,500 if in the 15 percent tax section.
Homeowners would be on the hook even if the house sold but the bank had not formally forgiven the loan in a letter: The banks must officially sign off in writing before Dec. 31.
“It’s a huge issue – it will be a shock to many taxpayers after 2012,” said Mark Steber, the Florida-based chief tax officer for Jackson Hewitt Tax Service.
The law first came into affect five years ago as the housing market went bust nationwide.
The Mortgage Debt Relief Act of 2007 “generally allows taxpayers to exclude income from the discharge of debt on their principal residence,” according to the Internal Revenue Service. “Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief.”
Up to $2 million of forgiven debt can be forgiven this year, $1 million if married and filing separately, according to the IRS.
Homeowners declaring bankruptcy could escape paying income taxes on any cancellation of debt income if the debt is forgiven in the bankruptcy even if the debtor is solvent, said Nick Jovanovich, a board-certified tax attorney in Fort Lauderdale, Fla.
“Bankruptcy trumps everything,” he said.
Or homeowners might not have to pay income taxes on any cancellation of debt income to the extent that they are insolvent immediately before the cancellation – that is, their debts exceed the value of their assets, Jovanovich added.
Steber and Jovanovich said homeowners should decide now what they are going to do – to give themselves time.
Short sales can take a long time and even if banks quickly approve a short sale, the would-be buyer may get cold feet and the deal fall through, Singer said.
Then the sellers have to begin again, he said.
Information provided by the Sun Sentinel (Fort Lauderdale, Fla.), Donna Gehrke-White. Distributed by McClatchy-Tribune News Service.
Update! State of Florida’s Foreclosure Mediation Program Ends
This information was just released…
Florida’s statewide managed mediation program for residential mortgage foreclosures is finished. Florida Supreme Court Chief Justice Charles Canady signed an administrative order on Monday, December 19th, 2011, terminating the 2-year old program. This follows a panel recommendation in October that Florida’s 20 judicial circuits should, instead, be allowed to set up local programs.
The Florida Supreme Court ordered the mediation program last year. It was designed to help clear foreclosure cases that have clogged Florida’s courts in recent years. Canady appointed the workgroup in September to determine if the program was working. However, Canady said reports suggest it didn’t work as well as hoped, and the courts could no longer justify the system.
The panel cited several problems, including economic incentives for lenders not to settle cases. According to some homeowners facing foreclosure, lenders did not take the process seriously.
Foreclosures already in the mediation process will continue on that path as they work their way through the system. New foreclosure cases, however, will not be referred to mediation.
Information provided by The Tallahassee Democrat and Florida Realtors®
