Jacksonville Real Estate Ramblings

You've just received the letter you have been dreading and hoping would never come, the notice of Lis Pendens, which announces to the world that you're behind on your mortgage payments and the bank has begun the foreclosure process on your Jacksonville home.

Not long after your notice, your mailbox seems to be a popular place for all the mail your getting from all the "nice" people wanting to help you and your family. Some of those people are investors, real estate agents, attorneys, or companies who say they can negotiate a loan modification or a short sale on your behalf.

Some of these companies and people are good people who are honest and will do the right thing. Some are only wanting to take advantage of your situation and want your property to make a ginormous profit, dishonestly.

Here's one scenerio you need to avoid so you don't commit mortgage fraud: The investor who wants you to sign over your deed to them, without them paying off your loan first. This means you don't own your house but you're still responsible for your mortgage. You sign over your deed and the investor lists the property for sale, sometimes with a real estate agent. (Sometimes the investor doesn't take over the deed, so they may not always ask for you to sign over the deed) Let's say they list the house for 150k (with you owing more than 150k, making this a short sale) and get a buyer willing to pay that price. The investor submits a contract to your mortgage company for 100k, with them being the buyer. Your mortgage company has no idea about the other buyer with the 150k offer. The bank accepts the 100k offer and eventually 2 closings take place, the first with the investor as the buyer, then the 150k buyer. Guess what this is called? Mortgage fraud! You, the investor and the real estate agent have all committed mortgage fraud together. Even if you and the real estate agent are unaware, you could both be held responsible, along with the investor.

Why is it mortgage fraud? In a nutshell,since this is a short sale, the house was listed for a higher price, got a buyer at the higher price, but the investor's contract was for alot lower. The 150k buyer is never disclosed to the lender. Most of the time, the buyer isn't even aware of the offer the investor is making with the lower amount. The investor has pretty much stolen money, due to the lender.

How do you avoid this situation?

1. NEVER sign your deed over to anyone, unless it's at the closing table because you have completed a successful and honest short sale (if your short) or a closing if you're not in a short sale situation.

2. If the investor tells you NOT to talk to your lender, then that's a red flag!

3. If they tell you that they will act as a trustee to your property, don't buy it.

4. If a real estate agent approaches you with any of those situations, saying that is good to do, kick them to the curb!

I've seen these scenarios in our local MLS and the FBI has made visits to the Jacksonville, Orange Park Florida areas, investigating this type of mortgage fraud.

I won't get involved with those situations and as my client, I would never ask you to get involved either. I always use a reputable and honest closing attorney, if you don't already have an established relationship with one. During the short sale process, I handle all the details for you, but at any time, you can call and talk to your mortgage company to discuss the process with them. I will never sway you to not be in communications with your bank.

I currently service short sales in Jacksonville, Fleming Island, Orange Park and the surrounding Northeast Florida Area. Call me at 904-910-3516 to discuss your situation and find the best solution to help you avoid foreclosure.

Seller Alternatives To Foreclosure

So, your house is in foreclosure…Now what? Try to look at the situation without attaching your emotions. I know, easier said than done!

One very important thing to remember: Time is of the essence, so take quick action in order to allow yourself enough time to complete the chosen process.

Do Nothing – If a homeowner does nothing, they most likely will lose their home at foreclosure auction. Loan applications generally ask if the applicant has ever been foreclosed upon. Credit reports also disclose this damaging information.

Payoff/Refinance – Completely paying off the entire loan amount plus any default amount and fees. Usually accomplished through a refinance of the debt. New debt is at a normally higher interest rate and there may be a prepayment penalty because of the recent default. With this option, there should be equity in the home.

Reinstatement – Paying the entire default amount plus interest, attorney fees, late fees, taxes, missed payments and fees.

Loan Modification – Utilizing the existing mortgage company to refinance the debt or extend the terms of the loan. This may allow the homeowner to catch up at a more affordable level if they qualify. More lenders are agreeing to a loan modification . Sometimes you may see a reduction in the interest rate either temporary or for the remaining life of the loan.

Forbearance – Lender may be able to arrange a repayment plan based on the homeowner’s financial situation. The lender may even be able to provide a temporary payment reduction or suspension of payments. Information will be required from the lender to show that you are able to meet the new payment plan requirements.

Partial Claim – A loan from the lender for a second loan to include back payments, costs and fees.

Deed in Lieu of Foreclosure – Give the property back to the bank instead of the bank foreclosing. This process can be much faster than a foreclosure. Most loan applications ask if this has ever happened.

Bankruptcy – This option can liquidate debt and/or allow more time. I can refer you to a qualified bankruptcy attorney.

Chapter 7 (Liquidation) To completely settle personal debt.

Chapter 13 (Wage Earner Plan) Payments are made toward a plan to pay off debts in 3 – 5 years.

Chapter 11 (Business Reorganization) A business debt solution.

Sale – Homeowner may sell the home without lender approval for a conventional home sale. If the property has equity (money left over after all loans and monetary encumbrances are paid), the homeowner will get cash from the sale. At the other end of the spectrum, a short sale, also known as a pre-foreclosure sale, can be negotiated with your lender by your real estate professional if what is owed is more than the property’s value.

As human beings we want to know who is the blame for our current situation, who can we be mad at, who can we point that accusing finger at?

Here's my take on the current situation not only in the Jacksonville Florida real estate market but the entire country: (Not necessary in any particular order)
Wait! Before I start, I want to say that I don't believe there is just one person or one scenerio that caused out current situation, it's the accumulation of many.

1. Any unscrupulous people, whether it be lenders, real estate agents, appraisers, investors, owner occupied buyers, etc...

2. Real estate agents- yep, I said it. We have to take a little responsibility. We pushed the bar to net our sellers the most money we could. That's not really a bad thing, but it is reality.

3.Appraisers-Some helped push the values too high when the value just wasn't there.

4. Mr. Greenspan should have raised the rates a little more before our peak in 2005.

5. New home builders. They were increasing their prices right and left. One builder consistantly increased their prices by 5k a month!

6. First time homebuyers were priced out of the market! Think about it....your first time homebuyers are your foundation, without first time homebuyers to buy homes, it keeps everyone else from moving up to bigger homes. So the market is correcting our faulty foundation, by the prices coming down so the qualified first time homebuyers can start buying again.

8. Lenders for lending money to people just because they had a pulse! And some of those programs, I can't believe you put those buyers in, even though they were not in the buyer's best interest.

Last but definitely not least....


9. Buyers who made poor choices just to be able to buy a home. And I'm talking about investors and owner occupied alike! You signed up for interest only loans or loans with ARMS, thinking that the market would still be hot and you would be able to refinance to a fixed rate or sell for a huge profit. Now, when the ARMs have reset and homeowners can't afford their new payment, they are also having a difficult time selling their home because they are upside down in value. What a terrible place to be for families facing this burden.


What a learning experience this has been! Personally, I'm glad to have the opportunity to experience the market of 2004/2005 and to be experiencing the current market. Don't get me wrong, I can't stand to walk into a vacant home that is going into foreclosure, and seeing remnants of a family. Little finger prints on the wall, toys left behind, furniture left behind, anything that tells a story of who the people were, that lived there. I've learned the tools needed to assist these homeowners to make the best out of a bad situation. Learn what your options are to foreclosure.

Welcome back to the latest blog about Foreclosure in Jacksonville & Orange Park! (this applies to all of Florida) In the last blog we talked about the reasons you found yourself getting behind on your mortgage payments. Today, we're going to talk about the process of foreclosure and what steps are involved. Typically, when you're 3 payments behind, your mortgage company will send you a breach letter, also known as a notice of default. 30 days later they send the file to their attorney who then files a notiice of "Lis pendens" in the county you reside. You will receive a notice of "Lis pendens" as well. This becomes public record for the world to see. In most counties, the public records are online so anyone with a computer and Internet connection can search the Lis pendens. Once your Lis penden is in the public records, be prepared to receive tons of mail from people wanting to "help" for the next few months. You will even receive phone calls and even some visitors at your front door! One client of mine was even lucky enough to find a coffee mug at her doorstep filled with candy and a note. That's great for home owners with kids who are trying not to let their kids know about the situation they're in. You're going to receive letters from investors wanting to buy your home, companies offering to help you save your home (for a fee) and you'll probably receive letters from real estate agents. With all the letters, phone calls, wonderful and "thoughtful" gifts you receive you may end up very confused. Make sure you check out these companies first. Also the companies offering to help you save your home, well the things they'll do, you can do yourself..for free!

More on that in the next blog. To continue along our timeline, once the Lis pendens has been filed, you have approximately 4 months before your home is sold on the court house steps. Approximately 3 months after the Lis pendens is filed you'll have a hearing before a judge. At that hearing you can plead your case to have an extension. Depending on the situation, the judge may grant you more time. If an extension isn't granted, 30 days later your home will be sold.

If you're wondering if there's anything you can do to avoid foreclosure, you do have options. Please visit www.pamgraham.com/ and click on avoid foreclosure to receive a free report detailing those options.

Also, in my next blog : " Foreclosure in Jacksonville & Orange Park Florida Part 3" I'll discuss what options you do have to avoid foreclosure.

Are you getting behind on your mortgage payments? If you are, I'm sure you're feeling a number of different emotions. You're probably scared, worried, wonder how in the world did you let yourself get into this position? Then the next question is how in the world do I get myself out? I don't need to tell you that everyone needs a roof over their heads,but the question you need to ask yourself is, can I afford the roof I currently live under? If you weren't behind on your mortgage payments could you afford your normal payment? Sometimes homeowners get behind because something come along you weren't prepared for. Maybe your spouse was laid off, or they got sick, maybe there was a death in the family. Maybe you can easily afford your normal monthly payments but because you weren't prepared for one of life's hurdles you fell behind. Or maybe you're a homeowner who struggles every month to make your mortgage payment, you scrape and scrape to get by and at the end of the month you wonder how you're going to make it to next month. If you find yourself in the situation of getting behind on your payments, the first thing you should do, is to call your mortgage company. Whatever you do don't avoid them. They don't want to foreclose on you unless they absolutely have to. Most mortgage companies have a couple of different options for their homeowners who get behind.

I offer seller alternantives to foreclosure on my website Jacksonville Real Estate Ramblings. You can find it under the avoid foreclosure tab.

In my next post "Foreclosure in Jacksonville & Orange Park Florida Part 2" I'll talk about what's involved in the foreclosure process.