SOUTHWEST FLORIDA - The Lee County Court Clerk says just in the first five days of May, They've had 306 foreclosure filings in Lee County. For the month of April, they received 2478 filings,120 more than in march. We know many of you have questions, and here's a list of the most common ones we've received and the answers.



HOW DOES THE FORECLOSURE PROCESS WORK?

Foreclosure can start after a single missed payments, but most banks give a grace period for missed payments.

After 30 days late, you'll start getting calls from the bank--and usually they will not accept partial payments--only the entire amount to bring the loan current. Once you get three months behind, the bank will file foreclosure papers in court.

The court will send you a letter demanding payment, and you'll need to respond in the time they give you (typically 20-30 days) to avoid foreclosure.

If you don't pay, the suit waits for the judge to make a decision about allowing the mortgage company to go forward with selling the property. After a judgment comes down--the sheriff will send a deputy to your home to evict you.

The whole process can take about 180 days or six months.



WHEN DO I HAVE TO MOVE OUT?

"When do you have to move," Attorney Steven Martin told us, "I suppose the real world would be when the sheriff's deputy comes and removes you from the house. So some people think they can stay at their home rent free until the foreclosure comes through and I guess that can happen. Is that the best way to approach it? Probably not. You should probably call the lender and work out the situation."


    
WILL A SHORT SALE SAVE MY CREDIT?

A lot of you told us you're short selling your home--that is making an agreement with the bank that they'll take less than you owe for the home--to save your credit. We had a lot of questions about how much a difference it might make. The short answer? Not much.

In fact, Fair Issac, the people who developed the system for FICO credit scores--say they rate short sales and foreclosures the same. Both will appear on your credit as not paying the account as agreed. The short sale could even leave you with the same financial liabilities.

Attorney Carmen Dellutri told us, "The overwhelming majority of the time its not in the sellers best interest to engage in a short sale. They're giving a third party ownership of their home and they may have significant tax consequences associated with that sale."

Most lenders don't make their decision based solely on a numerical cutoff--so there are a lot of questions about how lenders will look at the words "short sale" instead of the word "foreclosure" on your credit.

There is a myth that a foreclosure will ruin your credit forever. Fair Isaac says that's not the case. If you pay all your other obligations on time, you could see your score rebound in as soon as two years.
 


I CAN'T PAY MY CONDO ASSOCIATION DUES/WE CAN'T GET OUR NEIGHBORS TO PAY THEIR DUES. WHAT CAN THEY/WE DO TO MAKE US/THEM PAY?

We've heard from those of you on both sides of the *condo dues* issue. There's those of you who've called us because you're a condo owner who can't pay.
Then there's the rest of you in the condo unit who are having to pick up the other guys tab.
Here's what you need to know about condo rights in Florida.
The sunshine state has a very strong law for condo associations. If you're not paying your bill, the condo association does have the right to come after your property. Attorneys tell us they've seen it happen right here in southwest florida.
Attorney Carmen Dellutri told us, "We see it a lot. There are firms who specialize in Condo and Homeowner Association law and that's what they're retained to do-- to protect the interests of the Homeowners Association and if that means foreclosing, yeah by all means they're gonna do it."



IF I FORECLOSE OR SHORT SALE, COULD I OWE MONEY TO THE IRS?

In the past, this was never an issue, because homes almost always sold for more than the loan amount. So when banks foreclosed, usually they were getting back more than they loaned out.

Because a lot of homes are selling for less than what you paid for it, the IRS could see the difference as "income."
That means you could have to pay taxes on it. Congress did pass a law so the IRS wouldn't come after people for that difference on their personal home, but attorneys say that law is less clear for investment properties or if you also have a home equity loan.



I THOUGHT MY BANK HAS TO WORK WITH ME. WHY WON'T THEY?

That's not true--most want to work with you because it's expensive to go through the foreclosure process--but they legally don't have to. Many of the banks are overwhelmed right now with people in your same situation. Be persistent and consider talking to an attorney who may be able to help you explore the best options for your financial situation.



MY BANK AGREED TO A SHORT SALE, NOW THEY WON'T ACCEPT THE OFFER. CAN THEY DO THAT?

Even if your bank agrees to do a short sale, they can reject every and all offers if they want to. Usually they'll do this if the offers come in lower than the appraised value of the home. Make sure you have a clause in your contract that your short sale is contingent on bank approval. Otherwise, you may legally have to honor the contract with your potential buyer even if the bank hasn't accepted the deal.



WOULD A BANKRUPTCY MAKE MY SITUATION WORSE?

Attorneys say if you think this, you could be blocking yourself off from a great avenue to protect some of your other assets.



I CAN'T AFFORD AN ATTORNEY, WHAT DO I DO?

"I think the biggest mistake by far is that a lot of people wait very very long in to-- unfortunately-- their financial downfall to seek an attorney's counsel and if they meet with an attorney much earlier in the process we might be able to find ways to save some or all of their cash before they deplete it," says attorney Chuck Phoenix.
 
Many attorneys offer free consultations--and there are also some organizations who offer free legal services for those with low income. You can call the  Lee County Bar Association Lawyer Referral Service at (239) 334-4491to get a recommendation for an attorney that's right for you.
  


I TRIED TO MAKE MONEY ON THE HOUSING BOOM. NOW THAT IT'S BUST, WILL FORECLOSING ON MY INVESTMENT PROPERTY JEOPARDIZE MY PRIMARY HOME?

We had a lot of questions from people wondering if they foreclose on one of their investment properties, would it affect their primary home.

"Your primary residence is probably not in jeopardy because of homestead protection so long as you can make your payments which is another issue entirely. Its, again, why people should seek counsel from a bankruptcy or at least a foreclosure attorney to see what might happen if they can't continue to make their payments," attorney Chuck Phoenix told us.



IF I FORECLOSE ON MY HOME, CAN THE BANK GARNISH MY WAGES TO MAKE UP FOR THE DEFICIENCY BETWEEN THE LOAN AMOUNT AND WHAT THEY SELL THE HOME FOR?

A lot of people wanted to know if they short sale or foreclose, and the bank sells the property for less than the amount of the loan, can they be held responsible for the difference. One person emailed us wanting to know if the bank could garnish your wages.
"The wage garnishment issue-it's very difficult in florida to do that. It is possible. It would take an analysis of their financial situation not just how much they make but how much they spend," attorney Chuck Phoenix told us.



I'M A RENTER. HOW DO I FIND OUT IF MY HOME IS IN FORECLOSURE?

Because the foreclosure problem involving renters is relatively new, there are not a lot of rules governing "tenant rights" when it comes to foreclosure. Still, there is a little bit of legwork you can do to check out your new home before you rent to make sure there are no obvious signs the property is in foreclosure.
First of all, check the property appraisers website to see if the person you're renting from actually owns the home. If not, check with that person and make sure they know their property is being rented. If you notice the property is owned by a bank, most likely, it is in foreclosure. You can also check the Lee County Clerk of Courts to see if your landlord has what's called a "Lis Pendens" filed against the property. You can also check with the Lee County Clerk to see if the property has any other liens from the city or homeowners association.

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