Miami Condo Foreclosure Rescue Fraud

Miami condo and home buyers, sellers and owners were recently given some protection and education when recent laws were passed by the Florida Legislature to help educate and inform Florida residents about fraudulent foreclosure rescue and avoidance schemes.  A recent article byJ. B. Davis of Attorneys Title Insurance Fund, Inc., describes, in part, the basics of the legislation as follows:

“Session Law Ch. 2008-79, HB 643, concerning foreclosure fraud and the regulation of mortgage rescue companies, was passed by the Florida Legislature creating Sec. 501.1377, F.S., which became effective Oct. 1, 2008. The newly created statute targets “foreclosure-rescue consultants” and “equity purchasers” in an attempt to protect homeowners who may be vulnerable to fraud, deception and unfair dealings as a result of being in default on their mortgages, in foreclosure or at risk of losing their homes. Sec. 501.1377(1), F.S. Under the statute, persons or entities engaging in foreclosure rescue schemes must now disclose the terms of the transaction in a written agreement and provide homeowners with the opportunity to cancel a conveyance of their home in advance of a closing.

At the outset, it may be helpful to recognize that the statutory scheme differentiates between “foreclosure-rescue consultants” and “equity purchasers.” Sec. 501.1377(2)(a) and (b), F.S. Foreclosure-rescue consultants provide services defined as “foreclosure-related rescue services” and the written agreement required to be provided is a “foreclosure-related rescue services agreement.” Sec. 501.1377(2)(c) and (4), F.S. An equity purchaser, on the other hand, seeks a conveyance of the homeowner’s subject property to the equity purchaser and the homeowner retains a legal or equitable interest in the property being conveyed. Such transaction is defined as a “foreclosure-rescue transaction” and the written agreement required to be provided to the homeowner is a “foreclosure-rescue transaction agreement.” Sec. 501.1377(2)(d) and (5), F.S. A foreclosure lis pendens must be of record in connection with a foreclosure-rescue transaction by an equity purchaser, but a foreclosure lis pendens may or may not be of record where a transaction involves a foreclosure-rescue consultant who provides foreclosure-related rescue services.“

Although the details of what is and what is not improper foreclosure rescue services may be unclear or otherwise difficult to fully understand, the important thing is to always get the appropriate WRITTEN agreement of the terms of service, and always get a second or even a third opinion from a Board Certified Real Estate Attorney and/or an experienced mortgage and lending law attorney.

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Miami Condo Short Sale

Short sale transactions for Miami condos and homes are becoming very common now, and many third parties such as short sale processing companies and real estate agents are involved in the process.  Despite Miami condo short sales becoming a common occurrence, there are still problems out there with the information given to short sale sellers about the ramifications of accepting a short sale.

Miami Condo Short Sale Tax Issues.  Every tax rule has limitations, thus, in a nutshell no seller should rely on any one person regarding the possible tax consequences of completing a short sale, especially if that person suggests that his or her answer is both simple and 100% correct.  A good method to understand the possible tax consequences is to ask three people from different professional fields, and ask each for the published source supporting their opinion.  Experienced investors selling through short sale will verify the consequences by asking their Realtor, Attorney, and Accountant. 

Miami Condo Short Sale Deficiency Judgment.  Lenders have the right to attempt to collect what is due on a debt by any legal means available.  Do not trust that just because a short sale was approved that the underlying debt is forgiven.  It is usually not forgiven.  Before you sell your Miami condo or home through short sale, schedule a meeting with a Florida collections and litigation attorney and ask what the worse case scenarios could be by completing the short sale as applied to your particular situation.  Include details about your job, assets, bank accounts, safety deposit boxes, property, etc., for the comprehensive answer. 

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Be wary of any entity promising you that they can save your from foreclosure and take care of your upside down mortgage and repair your credit, especially when they demand substantial fees up front.

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