A new Florida law, the new F.S. 501.1377, which was approved by Charlie Crist On May 28, 2008, goes into effect on October 1, 2008. While it’s well intentioned and aimed at protecting homeowners in Florida who are facing foreclosure and being targeted by foreclosure “rescue” scam artists, the new law will effectively deny Florida homeowners legal representation in foreclosure cases.
The law defines a “foreclosure-rescue consultant” as “a person who directly or indirectly makes a solicitation, representation, or offer to a homeowner to provide or perform, in return for payment of money or other valuable consideration, foreclosure-related rescue services.” Unbelievably, attorneys are not excluded from the statute and as a result are prohibited from receiving payment for a bankruptcy filing or other foreclosure defense “before completing or performing all services”.
In other words, if I am interpreting the new law correctly, come October, attorneys in Florida will no longer be able to collect a retainer to assist Florida homeowners in defending a foreclosure action. It would also seem to prevent bankruptcy attorneys from collecting a fee in advance when assisting a homeowner in the throes of foreclosure with a bankruptcy filing.
So what should a homeowner do, if they find themselves in this situation and facing a possible foreclosure? The Better Business Bureau advises consumers who are at real risk of losing money, equity, their home or all three to carefully consider the following if their mortgage is in arrears or they are facing foreclosure:
We have recently partnered with Save Our Home From Foreclosure, LLC, which is a service aimed at helping Florida home owners avoid foreclosure and mitigate the damage that usually results from going through this process. If we are unable to work with the home owner’s lender to modify the loan and keeping the home is no longer an affordable option, we will coordinate an effort to “short sell” the home to avoid the lasting scars caused by a foreclosure. We have relationships with Realtors who specialize in “Short Sales”, and understand the complexities and urgency of these transactions and aggressively market properties. There are no up-front fees for these services, as SOHFF is paid out of the proceeds of the sale by the lender and/or purchaser.
If you or someone you know is currently facing this issue, you are not alone, as millions of home owners are now finding themselves in the same position. We urge you however to be proactive to minimize the damage to your credit and avoid the hardship and embarrassment of foreclosure. Help is available at (727) 209-0372, or you may call our 24-hour toll free help line at (800) 652-5567 ext, 201 for more information.
Seniors today often live with a great deal of financial uncertainty. The retirement they imagined may not be consistent with the reality they face.
Incomes are flat or declining, living and medical expenses are higher than ever and few income boosting alternatives exist. Even those who have heard about Reverse Mortgages may be unsure about how they work or what questions to ask. As they search for information, they often turn to their Mortgage Broker or other financial institution for guidance and information.
A Reverse Mortgage is a special type of loan that allows a homeowner to convert a portion of the equity in their home into cash they can access. The funds are not taxable to the homeowner and typically don’t interfere with eligibility for Social Security or Medicare benefits. (However, in the federal Supplemental Security Income program, beneficiaries must keep their liquid resources under certain limits.) The customer retains title to the home as well as right to any appreciation in home value when the loan terminates after it is paid off. The loan remains in force until the last titleholder dies, permanently leaves the home or sells the property; the borrower can't be forced to sell or move by the lender. The loan may be repaid at any time. But unlike a traditional home equity loan or second mortgage, no monthly payments are required. Instead of putting further pressure on an already stretched budget, a Reverse Mortgage can free a senior homeowner of monthly debt obligations.
Most Reverse Mortgages today are Home Equity Conversion Mortgages (HECMs) and are FHA-insured and guaranteed. Because HECMs are subject to FHA lending limits, proprietary products have also been developed to help homeowners with properties in excess of the FHA lending limits.
Who qualifies for a Reverse Mortgage?
All titleholders must be 62 or older and own a home with some equity. There are no income or credit qualifications. Existing mortgages or liens must be paid off, but are often paid with proceeds from the Reverse. The homeowner must also remain current on insurance and property taxes, but these can also be paid with proceeds from the Reverse.
How can a borrower use the money?
The funds can be used for any purpose from making ends meet to living retirement dreams. The top reasons for funds used given typically by borrowers are:
The amount available depends on the borrower’s age, the value of the home, interest rates and local FHA lending limits. Older borrowers can receive a higher percentage of their equity than younger borrowers. Funds can be received in a lump sum, a monthly payment or a line of credit.
What are the costs?
As with most any loan product, there are origination fees and closing costs, but they are typically paid from the proceeds of the Reverse Mortgage. HECM loans also have a charge for the FHA’s Mortgage Insurance Premium (MIP). There are usually no out-of-pocket costs to the borrower.
What consumer protections are in place?
Reverse Mortgages are non-recourse consumer loans – the loan payoff can never exceed the value of the home. To get a Reverse Mortgage, the customer must attend a mandatory counseling session and review their financial situation with a trained, professional Reverse Mortgage counselor. Many of the counselors are certified by the AARP. The counselor ensures that they understand the transaction, the costs and their other alternatives.
If you have questions regarding Reverse Mortgages or how they may provide life-changing benefits to you or someone you know please complete the questionnaire on or website tab "Reverse Mortgages", or contact us at (727) 209-0372.
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