Global America Realty & Development, Inc.

Question- I want to keep my home. What are my options?

Answer from Kevin Sullivan.
The best and most cost effective way of keeping the home is to do what we call a Work Out. A work out consists of getting with the lender in the Loss Mitigation Department. They will send you a hardship package, which consists of documents that you must fill out such as your financial statement, reasons why you had the hardship, bank statements for two months and last two years income tax returns. Based upon this information they will make an offer on restructuring your payments to let you get caught up on your late payments. An example would be you are 5 months behind on payments of $500.00 dollars a month for a total $2,500.00 there are usually late fees and attorneys fees at this stage. They might offer you $1,000 dollars up front and an extra $200 dollars a month on top of your normal $ 500 dollar mortgage payment until you get caught up. The work out is open to negotiation from both parties. I suggest you ask them to waive late fees and attorney fees and put the missed payments on the end of your loan. BEWARE the legal process is continuing while you attempt the work out. It is sometimes hard to get to the right person in loss mitigation because all the clerks want to do is refer it back to their attorneys. Be persistent

Question- A bankruptcy attorney sent me a letter and said I should go Chapter 13 bankruptcy to keep my home. What are my options?

Answer from Kevin Sullivan.
Chapter 13 bankruptcy is what I call a court-imposed work out. A judge will decide how much you will pay your towards each of your debts, to get caught up within 5 years. I do not suggest this if the payments are just to high for you, because in 6 months, you will be in the same bad financial position and have a bankruptcy on your credit report. If you want to keep the home I suggest you do a work out as stated above because you can do it with out hiring anyone and you will not have a bankruptcy on your credit report. If you cannot come to agreement with the lender then Chapter 13 Bankruptcy should be an option to keep the home. RECCOMMENDATION: I always suggest you hire a competent attorney when you are in a legal situation, which could affect your family both monetarily and credit wise. I will be glad to give you names of bankruptcy attorney’s who may assist you.

Question- Should I do a Chapter 7 bankruptcy and reaffirm the house.

Answer from Kevin Sullivan.
A Chapter 7 bankruptcy wipes out your debt. If you re-affirm the mortgage and then lose your house in foreclosure 6 months down the road you will have already used your Chapter 7 Bankruptcy and will be barred from using it again for 7 years. You then might have a big judgment against you and no house. Recommendation: use your Bankruptcy options wisely. Consult a competent attorney.

Question- I owe more than my house is worth but I want out without having a Bankruptcy on my credit report. What are some options?

Answer from Kevin Sullivan
You first must know what type of loan you have, Conventional, FHA, VA or Seller held mortgage. FHA and VA are in my opinion the best because of the Governments pre-foreclosure program that you may be entitled to. These are government insured loans and the government does not want these homes, because after the lengthy foreclosure process, they then must liquidate these homes as HUD home foreclosures. The paper work is the same as a workout except we are selling the home to a buyer before the foreclosure sale. The lender will postpone the legal process for 90 days while we find a buyer. The lender will order an appraisal and the offer must be within the guidelines. If you owe more than what we are selling the property for, this is called a SHORT SALE. The lender is taking less than what is owed. The lender will pay our real estate fee per the guidelines. Conventional loans will also do short sales but it is up to the individual investors. MUST KNOW. If a mortgage company takes less than what is owed they report it to the IRS and you must report that loss that they forgive as ordinary income. Seek a competent accountant for IRS advice.

Question. I have two mortgages on my property and the first is in foreclosure.

Answer from Kevin Sullivan
Same process, now we must deal with both lenders.

Question. How does the legal process work?

Answer from Kevin Sullivan
The process starts by the lenders attorney filing a les pendens and foreclosure lawsuit. They will then have a process server, serve you and anyone else who might have a legal claim to the property, with the lawsuit. You must answer the lawsuit within 20 calendar days or a default judgment may be entered against you. Some law firms are giving thirty days because of the Fair Debt Collection Act. A default judgment is basically that you did nothing and therefore a judgment of default is granted (this is a quick win for the lender). As long as you put something on the record with the Clerk of Court a default will not be entered. Many of the attorneys for the lenders do not go for default judgments because they are easy to get overturned. But you need to answer the lawsuit in case they do. The lenders attorney then normally files a motion for summary judgment stating that there are no issues of law or fact in dispute therefore the lender is entitled to a judgment plus attorney fees and court costs. You should have notice of all hearings. At the summary judgment hearing the lenders attorney usually appears by phone and in most cases a judgment is granted unless you are represented by counsel or have a legal argument against the granting of the motion. The judge then sets a sale date of the property. It is normally approximately 30 days after rendition of the judgment. All foreclosure sales in Brevard County are on Wednesdays in Titusville. PLEASE do not let it get this far.

Question. What happens at the foreclosure sale?

Answer from Kevin Sullivan
The sale starts at 11am. A representative of the lender will start the bidding when your case is called. They normally start bidding at $100.00. To buy a property at the foreclosure sale you must have cash in hand. No getting financing. Therefore the people bidding are normally investors only looking for sweet deals. If they cannot get a property with lots of equity they might not bid. The lenders usually bid up to their judgment amount if others are also bidding. If no else bids on your property accept the lender they just bought the property for $100.00 dollars. UNFORTUNATLY the judgment might be for $80,000 dollars. You still owe $80,000 - $100.00 = $79900 and you no longer have a house. That is called the deficiency