Bankruptcy and Foreclosure Attorney Blog

Can't afford to file for bankruptcy? You should still contact a Bankruptcy Attorney to find out some basic information. For example, you need to know the statute of limitations for the debt you know and whether or not your are judgment-proof. "Judgment-proof" essentially means a creditor or collection agency has nothing to go after because you have no assets. After meeting with a Bankruptcy Attorney and determining your are judgment proof, write your collector notifying them of your status, state you cannot repay the debts, and demand for contact to stop. If is a right under federal law to have debt collectors cease and desist.

What are other things you need to know that an attorney can advise you on?
1. Does your state allow wage garnishment? If so, a creditor can sue you and get a judgment that allows them to garnish a portion of your income. Some states only allow wage garnishment for certain debts, such as student loans, child support and taxes.

2. Be wary of scams. At times where you are considering bankruptcy or are close to defaulting on your mortgage, you can be extremely vulnerable. Scams artists take advantage of your vulnerability and offer to rescue your for a fee. Go to www.QuestionsProtect.org for tips on avoiding scams.

3. Drowning in student loans? You may not have many options. However, FinAid.org, a non-profit, financial aid website, offers information on how to get out from under these debts. The most important thing is to NOT ignore your student loans. Also see for Bankruptcy and Student Loans for more information on the relationship between the two.

4. If you're deeply in debt, do not use your retirement money to help ease the problem. In 2005, the bankruptcy reform increased the amount of retirement savings that can be sheltered from creditors to $1 million.

The Northeast Florida Association of Realtors (NEFAR) released their report on residential sales statistics for June. Covering single-family residential and condo sales, the statistics show that closed and pending sales are up, prices are down and there is plenty of foreclosure property sales activity in Northeast Florida.

According to the NEFAR June numbers, pending sales went from 1,386 in June 2009 to 1,663 in June 2010, an increase of 20 percent. Closed sales were 1,370 in June 2009 and 1,613 in June 2010, an 18 percent jump.

NEFAR numbers for median and average home sales price were both down; in June 2009, the media home price in Northeast Florida was $160,000 and in June 2010 the median price fell 10.6 percent, to $143,090. Average home sale prices fell 6.5 percent, from $184,555 in June 2009 to $172,481 in June 2010.

NEFAR said that it was worth noting that while prices decreased for both traditional and lender-mediated sales, the amount of the decrease was significantly different. Traditional sales prices dropped by 5.4 percent, while lender-mediated prices fell 15.2 percent, year-over-year.

In a press release, NEFAR president Carol Hill said, “Northeast Florida's housing sales have been on the same track for 16 months now; we're seeing more sales at very buyer-friendly prices."

Online foreclosure property marketer RealtyTrac released statistics last week that showed the number of Jacksonville foreclosure notices in June declined by 14 percent from the previous month, but still remained high at 3,242.

The May 2010 number of foreclosures in Jacksonville was the highest since last August, reaching a total of 3,640 for the month. The June decline was most noticeable in Nassau and Duval counties, which experienced 47 percent and 20 percent declines, respectively.

RealtyTrac also reported that approximately 2.6 percent of Jacksonville area homes received foreclosure notices in the first six months of 2010. The Jacksonville metropolitan area includes five counties: Duval, Baker, Clay, Nassau and St. Johns. RealtyTrac says that one of every 39 homes in the Jacksonville metro area received a foreclosure notice during the first half of the year.

Foreclosure notices increased from May to June in three Jacksonville metro counties, including Baker County, which saw a 30 percent increase in foreclosure notices sent to homeowners in June. The rate of foreclosure notices in St. Johns County rose by 9.4 percent in June, and by .5 percent in Clay County.

Florida continued to rank third in the nation for foreclosure notices in the first half of 2010, and three Florida metro areas were in the Top 10, including Cape Coral-Fort Myers (#2), Orlando-Kissimmee (#8) and Miami-Ft. Lauderdale-Pompano Beach (#10).

Relying on data from Jacksonville-based Lender Processing Services of the percentage of homeowners who were more than three months late on their mortgage payments as of the end of May, Forbes magazine has compiled its list of the Top 10 Riskiest Cities for Homeowners:

1. Las Vegas, NV
2. Riverside, CA
3. Stockton, CA
4. Modesto, CA
5. Bakersfield, CA
6. Vallejo, CA
7. Orlando, FL
8. Memphis TN
9. Miami, FL
10. Fresno, CA

Two Florida metropolitan areas – Orlando and Miami – made the Top 10 list. Orlando was ranked #7 with 7.18 percent of loans more than 90 days delinquent and 11.24 percent of homes in foreclosure. Miami ranked #9 with 7.05 percent of loans more than 90 days delinquent and 15.28 percent of homes in foreclosure.

However, the two Florida cities are the only ones in the top 10 whose percentage of homes in foreclosure is lower than that of homes with severely delinquent loans. The Forbes article chalks this up to efforts by loan servicers and the federal government to modify loans and find other ways to keep homeowners in their homes.

Compared with the 4.4 percent national average for 90-day delinquent loans, all ten cities have significantly higher average delinquency rates – more than seven percent – than the nation’s 100 largest metropolitan areas.

Making the decision to file for bankruptcy is never easy. Filing for bankruptcy will affect your credit score and may result in you losing some of your property. However, creditworthiness may sometimes be overemphasized because by the time most people are thinking about filing for bankruptcy their credit score is already damaged. Aside from these disadvantages, bankruptcy can discharge most debts, eliminating your personal liability for debts incurred before the bankruptcy and petitioners will get what is known as an Automatic Stay.

The Automatic Stay goes into effect the moment a petition is filed with the Bankruptcy Court. This prevents creditors from taking any action against you, unless the Bankruptcy Court gives the creditor permission. Creditors are prevented from continuing any lawsuits they have filed against you, garnishing your wages, repossessing or selling any of your property or attaching your bank accounts.

One exception to the Automatic Stay is that it does not apply to criminal proceedings or to the collection of alimony and child support.

The Bankruptcy Court will send notice of your filing to your creditors 2 weeks after you filed your petition. However, if you believe that creditors have already taken action against you, you should notify your creditors immediately after your file your petition. Call your creditors and give them your bankruptcy case number as well as notify them by letter.

Continue reading " Advantages to Filing a Chapter 7 Bankruptcy in Florida " »

A security interest gives a creditor the right to repossess your property if you default on making payments. Secured creditors, creditors who have taken a security interest in your property, are treated differently from unsecured creditors by the Bankruptcy Court. For example, a secured creditor would be a creditor who has taken a security interest in your car and, in the event that you stop making payments on the car, the creditor has the right to repossess the vehicle.

In most bankruptcy proceedings, secured creditors are entitled to have the property returned, unless you continue to make payments on the debt. Below are a few ways you can deal with secured creditors:

1. Return the Property - Return the property (e.g., the car) to the creditor. Once you return the property to the creditor, you will not have to make anymore payments.
2. Redeem the Property - This option allows you to keep the property. You may keep the property if you pay the creditor the fair market value of the property, this is a one-time lump sum payment.
3. Reaffirm the Property - This option also allows you to keep the property. To reaffirm the property, you sign an agreement to continue to pay the debt. However, if you default on this reaffirmation in the future, the creditor can repossess the property and sue you for the balance owed. You should discuss reaffirming debts with a Florida Bankruptcy Attorney so you understand the full nature of the consequences involved. There are also certain debts that you should never reaffirm, a Florida Bankruptcy Attorney can inform you on these type of debts and explain why you would not want to reaffirm.
4. Avoid the Lien - You may be able to avoid the lien if the security interest is a non-purchase money security interest (the creditor did not give you the money to purchase the goods that the creditor has the security interest in).

Continue reading " How to Deal with Secured Creditors in Florida " »

For Chapter 13 debtors who want to keep their home and have sufficient income (at least 31 percent of net income) to commit to a modified mortgage, Florida offers a mortgage modification mediation program.

Florida Chapter 13 debtors can request mortgage modification mediation by filing a motion with the bankruptcy court. Your Chapter 13 bankruptcy attorney can assist you with this.

In the Florida mortgage modification mediation process, you and your lender will choose a mediator, who is a neutral third party, to help you reach an agreement. Mediation is an informal process, and is not held in a courtroom but usually in a mutually agreeable meeting place. The mediator works with you and your lender to come to an agreement on a reasonable modification of your mortgage loan. The mediator cannot force a lender to modify a mortgage.

The cost for Florida’s mortgage modification mediation program for Chapter 13 debtors is a $275 fee that must be paid to your Chapter 13 trustee prior to beginning the mediation process.

After a motion has been filed, the court has entered an order requiring mediation and the fee has been paid, you may need to provide your lender with more financial information that will help facilitate a decision to modify your mortgage.

If you are a Chapter 13 debtor and are interested in the Florida mortgage modification mediation program, consult with your Florida bankruptcy attorney.

The U.S. Department of Housing and Urban Development (HUD) is providing underwater homeowners with a new mortgage refinancing program through the Federal Housing Administration to fend off a new round of foreclosures.

Approximately $14 billion in TARP funds have been allocated to the program, which is targeted to homeowners in a negative equity position as of the end of June, 2010. Through the enhanced FHA Short Refinance option, borrowers who are current on their existing non-FHA mortgage now have the opportunity to refinance into a new FHA insured loan if their existing lenders agree to write off at least 10 percent of the unpaid principal balance on the first mortgage.

To be eligible for the new loan, a homeowner must:

• Owe more on their mortgage than their home is worth;
• Be current on their existing mortgage payments;
• Qualify for the new loan under the standard FHA underwriting requirements;
• Must be refinancing a primary residence;
• Have the agreement of the first lien holder to write off at least 10 percent of the unpaid principal balance.

The Treasury will also provide incentives to secondary lien holders who agree to full or partial extinguishment of those liens.

If you are a Florida homeowner facing foreclosure, contact our Jacksonville foreclosure defense law firm.

A segment on the Today Show this week addressed the growing numbers of homeowners who have decided to simply walk away from their mortgages.  A growing trend in the U.S., and especially in hard-hit foreclosure areas like Florida, walking away from a mortgage is a decision best reached after examining both the financial and emotional consequences.

It is estimated that currently 18% of mortgage defaults are strategic defaults – people simply walking away from their mortgages because they thought it made better economic sense to do so.  And many money managers argue that the decision to walk away should be an economic one.

So how do you decide if it makes sense for you to walk away from your mortgage?  Consider these criteria:

• Has the value of your home dropped to 75% or less of what you currently owe?


• Do you have to raid your retirement accounts to pay your mortgage?


• Can you pay your mortgage and still take care of your other financial obligations?


• How long will it take for the home price market to come back where you live?


• Can you deal with the hit your credit score will take?

With the rising rate of strategic defaults, many banks are reaching out to homeowners with mediation packages aimed at keeping them in their homes.

Florida homeowners who are considering this option should first visit their lenders’ website to determine if they qualify for a loan modification or forgiveness program, and consult a Florida foreclosure attorney to learn about their options.

If you need help with a Florida foreclosure, contact our Jacksonville, Florida foreclosure law firm.

One Florida foreclosure lawyer says that the state’s high foreclosure rates and record number of distressed homeowners have attracted a booming new business in Florida:  loan modification scams.

If a loan modification company offers to negotiate with your lender to get your mortgage modified for an upfront fee, be extremely cautious!  Many simply take the money and never even contact the lender.

If you are trying to avoid foreclosure by obtaining a loan modification, here are some guidelines that will help you determine if you qualify:

• Your home must be an owner-occupied, single family home.


• Your home must be a primary residence.


• Your home must be occupied, not vacant or condemned.


• Your primary mortgage must be less than $729,750 to qualify for federal loan modification assistance.


• You have a monthly housing expense-to-income ratio greater than 31 percent of your gross monthly income.

The federal government’s Home Affordable Modification Program (HAMP) was designed specifically to help homeowners, not investors, be able to stay in their homes through loan modification assistance.  The HAMP program is slated to end by December 31, 2012.

For more information on how to defend yourself against possible foreclosure, contact our Jacksonville, Florida foreclosure law firm.

Florida is a judicial foreclosure state, which means that your lender must go to court to start the foreclosure process.  Judicial foreclosure is considered more consumer-friendly than nonjudicial foreclosure, where a lender can foreclose without having to show proper legal authority in a court of law.

Generally speaking, this is how a judicial foreclosure process works:

Missed Payments – even if you miss just one mortgage payment, a lender can start the foreclosure process.  However, in today’s environment, most lenders wait many months before taking action.

Notice of Intent Sent – the lender sends you a notice of intent to begin foreclosure proceedings, letting you know that this action can be stopped if you make up the missed payments, usually with interest and other costs.

Lender Files Suit – if you do not make the payments outlined in the Notice of Intent, the lender then proceeds to court and files a lawsuit.

Lender Gives Notice of Suit – you receive notice of the lawsuit via a Summons and Complaint.

Homeowner Response – you usually have 15-30 days in which to respond if you plan to contest or argue the lawsuit brought by your lender.  Either way, the lender must prove to the court that the foreclosure is justified.  If you don’t respond, the court will likely issue a default judgment that allows the lender to sell your home.

Notice of Intent to Sell – if the lender obtains a judgment, they will send you a 10-day notice of intent to sell.  If you can pay off the entire mortgage at this time, you will be able to keep your home.

Auction – if your home does not sell at auction, then your lender becomes the legal owner.

Eviction – you will not have to leave your home until you are served with an official written eviction notice.  If your home did not sell at auction, there is a pretty good chance that you will be able to stay in your home payment-free until the lender can sell.

For more information on your rights as a homeowner in the Florida foreclosure process, contact our Jacksonville, Florida foreclosure law firm.

The Florida Realtors has released the results of its Face of Foreclosure research project, which shows that a majority of those facing foreclosure in Florida are educated, married with children and are squarely in the middle class bracket.

The goal of the project was to provide lawmakers and another state leaders with in-depth information on the causes – and effects – of foreclosure in Florida.  The report examined foreclosures from March 2006 to February 2009 utilizing registered voter data.

Of the foreclosure victims studied, 60 percent had incomes of $50,000 or more – including 22 percent with incomes in excess of $100,000.  Vast majorities – 92 percent – are married, and 65 percent have children in the home.

Florida Realtors vice president of public policy was quoted in a Sarasota Herald-Tribune story on the project, saying, “Contrary to what some researchers have argued, many Florida homeowners were not driven into foreclosure by simply being trapped in bad loans, or losing their jobs or taking pay cuts.  In most cases, it was a combination of rising living costs, unemployment or decreased pay, health issues and other factors that caused homeowners to get into trouble. Simple answers and trite political responses just don't tell the whole story."

For more information on how to defend yourself against possible foreclosure, contact our Jacksonville, Florida foreclosure law firm.

Starting July 19, homeowners who live in Flagler, St. Johns, Volusia and Putnam counties in Florida and are facing foreclosure will be referred to mandatory mediation.

Last December, the Florida Supreme Court ordered all Florida counties to institute mortgage foreclosure mediation programs in an effort to help unclog the Florida foreclosure courts, which currently face up to a three-year backlog of cases statewide for nine foreclosure judges.

They also hoped that a mandatory mortgage mediation program would help Florida homeowners facing foreclosure stay in their homes.

In 2009, there were 16,419 foreclosure filings in the four-county area. A Daytona Beach mediation group – Upchurch White and Max Mediation Group -- has been selected as the foreclosure mediation manager for the four counties that are represented by the 7th Judicial Circuit.

Residential foreclosure filings made on or after July 19 will be referred to the mediation management group; homeowners who filed prior to July 19 can request that their case be placed in mandatory mediation by contacting the Upchurch White and Max Mediation Group in Daytona Beach.

Homeowners who participate in the mandatory mortgage foreclosure mediation process will participate in comprehensive financial and debt management counseling as well as meetings with their lenders to review their personal financial and mortgage information. They will then meet with a mediator who has been trained in foreclosure mediation to finalize the disposition of their case.

With Florida’s rising rate of foreclosures, more tenants are getting stuck between a rock and a hard place when it comes to dealing with a landlord in default.  One Jacksonville foreclosure attorney says tenants need to be aware of their rights when the property they are renting is in default.

The 1-4 Family Rider – lenders usually attach a 1-4 Family Rider or Assignment of Rents to the mortgage or deed of trust when the property is intended to be used as a rental   This rider covers property with one to four rental units, and assigns the right to receive rent to the lender if the buyer defaults on the mortgage.  If your landlord is in default, you will receive written notice from the lender that payments are to be made directly to the mortgage holder.

Multi-Unit Properties – the principle is the same for rental properties with more than four units: in case of landlord default, the lender gets the rent.

Responsibility for maintenance and repairs, however, is not so clear.   If a Family Rider is in effect, the lender has to apply rent money to property management expenses before applying it to the mortgage.  However, the lender is still not the legal landlord...so tenants who need to have repairs made are often stuck.

If you need more information regarding Florida tenant rights, contact our Jacksonville, Florida foreclosure law firm.

Most homeowners have a pretty good idea that they may be facing foreclosure shortly.  So exactly what are all the options when facing foreclosure?

Negotiate a workout.  Lenders are becoming easier to deal with by the day, thanks to the tsunami of foreclosures they currently have on their books.  If you want to keep your house, then negotiating with your lender for a forbearance (stopping your monthly payments for awhile, then adding those on to the back end of the mortgage), a lower interest rate or a principal balance reduction may be possible.

Refinance.  If you can get a better rate that will enable you to remain current with your payments, you can basically start anew.  However, refinancing when home values are continuing to erode can be almost impossible.

Reinstate your mortgage. If you can scrape together enough cash to pay your missed payments and associated fees, you can “reinstate” your mortgage.

Reverse mortgage. If you are over the age of 62 and have a lot of equity in your home, you can probably qualify for a reverse mortgage.

File bankruptcy. Consumers can file either Chapter 7 or Chapter 13 bankruptcy, and either can be used if you want to keep your home.  A Florida bankruptcy attorney can advise you how.

Go to court. You can fight your foreclosure in court if your lender cannot prove ownership of the mortgage or if they have violated federal fair lending rules.

Short Sale.  If you can get your lender to agree to the sale of your home for less than what you owe – and to let you off the hook for the difference – a short sale is a viable option.

Deed in Lieu of Foreclosure. This means that you simply hand over the deed without a foreclosure proceeding.

If you are a Jacksonville homeowner who needs to know more about the Florida foreclosure laws, contact our Jacksonville, Florida foreclosure law firm.

The Federal Trade Commission (FTC) is providing distressed homeowners with information on the warning signs of foreclosure rescue scams.

The FTC has posted a list of "red flags" on its website, which include the following warning signs:

• Guarantees to stop the foreclosure process – no matter what your circumstances


• Instructs you not to contact your lender, lawyer, or credit or housing counselor


• Collects a fee before providing you with any services


• Accepts payment only by cashier’s check or wire transfer


• Encourages you to lease your home so you can buy it back over time


• Tells you to make your mortgage payments directly to it, rather than your lender


• Tells you to transfer your property deed or title to it


• Offers to buy your house for cash at a fixed price that is not set by the housing market at the time of sale


• Offers to fill out paperwork for you


• Pressures you to sign paperwork you haven’t had a chance to read thoroughly or that you don’t understand.

If you’re having trouble paying your mortgage or you have gotten a foreclosure notice, contact your lender immediately.

For more information on how to protect yourself against possible foreclosure, contact our Jacksonville, Florida foreclosure law firm.

In a majority of cases, if you are negotiating with your lender for a loan modification, it will put a temporary stop to any foreclosure proceeding.

If you are applying for a loan modification under the Home Affordable Modification Program (HAMP), your lender cannot proceed with a foreclosure sale on an eligible loan until you have been evaluated and, if you are eligible, a trial modification offer has been made.

According to the HAMP website:

Participating servicers must use reasonable efforts to contact homeowners facing foreclosure to determine their eligibility, including in-person contacts at the servicer’s discretion. Foreclosure sales may not be conducted while the loan is being considered for a modification or during the trial period. Additionally, once a homeowner has entered into a trial period plan by submitting the first trial period payment, the servicer may not take the first legal action to initiate a new foreclosure.

This also pertains to those applying for a short sale or deed in lieu of foreclosure.

If you are a Florida homeowner facing possible foreclosure and need to know about all your options, contact our Jacksonville, Florida foreclosure law firm.

Foreclosure analysts a RealtyTrac, a leading online marketplace for foreclosures, say that foreclosures will likely peak in 2011 based on improvements in default rates.

From Investor’s Business Daily:

Standard & Poor's this week launched S&P/Experian credit indexes that include mortgage payment lateness. They show "lower proportions of default each month," said David Blitzer, chairman of S&P's index committee. "It's telling me we're really squeezing out some of the worst that's been going on."

The index tracked an average default rate of 3.7% on first mortgages in April, down 6% vs. March and 31% vs. a year ago. The second-mortgage default rate, 2.5%, fell more.

Improvement in defaults "is the first positive sign" in a long while, said Rick Sharga, senior vice president at foreclosure watcher RealtyTrac, on a Thursday conference call.

"We're seeing loans stay in delinquency longer and longer before the first notice of default," he said.

The foreclosure backlog amounts to about 55 months of inventory, Sharga says, and 2011 is apt to be the peak year for foreclosure activity. He adds that lenders appear to be slowing foreclosures while they try to sell off homes they've repossessed.

"Then they will replenish that supply, if you will, by bringing new loans into the foreclosure process and proceeding with them," Sharga said.

If you are a Jacksonville homeowner who needs to know more about the Florida foreclosure laws, contact our Jacksonville, Florida foreclosure law firm.

Homeowners who are in default on their mortgage and facing foreclosure are often too stressed by their situation to thoroughly examine all the options available to save their home from foreclosure.

The following professionals are best equipped to help distressed homeowners avoid foreclosure:

Your Lender. Even if you have already met with your lender and been turned down for a mortgage modification, try again.  As time goes on and the foreclosure rate grows, more and more lenders are becoming more open to considering either a mortgage modification or a forbearance, where lenders agree to suspend mortgage payments for a specific period of time.  Most major lenders now have whole departments set up to deal with potential foreclosures – check your lender’s website or visit a branch for more information.

Real Estate Agent.  A realtor can help you put together a “short sale” on your home if you no longer want to stay, but don’t want a foreclosure on your credit record.   The realtor will work with your lender, who must agree to the short sale, and then sell your home for whatever they can get.  All of the money from the short sale will go to your lender, but you will no longer have a mortgage.

Bankruptcy Attorney. Frankly, one of the best ways to avoid foreclosure may be through filing bankruptcy.  Bankruptcy can give you the option of either giving up your home to the lender, or keeping it and making payments under a court-approved plan.  Since bankruptcy discharges most of your other debt, that income would be freed up to pay your mortgage.

If you are a Florida homeowner facing possible foreclosure and need to know about all your legal options, contact our Jacksonville, Florida foreclosure law firm.

Florida has been one of the top states for mortgage fraud and it is becoming increasingly clear that aggressive lenders signing off on unqualified buyers  -- and the atmosphere they created that attracted “straw buyers” preying on easy money – played a big role in Florida’s foreclosure crisis.

Several leading law enforcement agencies -- including the Florida Attorney General, the U.S. State Attorney for the Southern District of Florida and now the Miami-Dade County state attorney – have formed mortgage fraud units and are aggressively pursuing cases all over the state.

Lenders who participated in predatory lending practices are also being scrutinized, with more consumers filing suit under the nation’s consumer protection laws, saying they have been victims of misrepresentation.

Last November, Florida Attorney General Bill McCollum told executives of several of the state’s largest banks to provide Florida homeowners with a fair and efficient loan modification process, hoping to stem further foreclosures throughout the state.  In response, several banks have opened foreclosure centers to counsel Florida homeowners who are currently in default on their mortgages and facing foreclosure.

If you are a Florida homeowner facing possible foreclosure and need to know your options for defending a Florida foreclosure, contact our Jacksonville, Florida foreclosure law firm.

Home sales rose 14 percent last month, and many of those purchases can be attributed to attractive pricing on foreclosed homes.

RealtyTrac, a foreclosure property marketer, says that the best way to buy a foreclosure is from the bank that now owns it.  These repossessions, called REOs (real estate owned by the bank), are usually in better shape than other foreclosures because the bank has had a financial interest in maintaining the property.

In addition, the bank may offer more favorable financing terms for those who want to purchase one of their foreclosure properties.

Purchasing a home that is in the foreclosure process through a “short sale” can be a slow and complicated process, requiring the potential buyer to negotiate a deal with both the owner and the lender.

Buying a foreclosure at auction is usually not a good idea for those who want to purchase a home for their primary residence.  While prices are usually the lowest for homes sold at a sheriff’s auction, these houses are usually purchased “sight unseen,” which can potentially lead to big repair bills.

For more information on your rights as a homeowner in the Florida foreclosure process, contact our Jacksonville, Florida foreclosure law firm.

Do you currently have a second mortgage, perhaps an equity loan you took out when times were good and you had a lot of equity in your home?  You are not alone.  Many lenders aggressively marketed home equity loans during the boom years for everything from home improvement  projects to pricey vacations.

And if you are now struggling to make payments on that second mortgage, you may be the one paying the ultimate price.

Unbeknownst to many consumers, the holder of a second mortgage can foreclose on your home, even if you are current on your primary mortgage payments.  This is because, just like your primary mortgage, your second mortgage was secured by the value of your home.

The good news is that most second mortgage holders are very reluctant to foreclose, because the primary mortgage holder is first in line for any money when your home is sold in foreclosure.  Which means the second mortgage holder usually doesn’t get a dime.

If you are having problems making your payments to your second mortgage lender, you should consider negotiating with them for a loan modification or forbearance agreement.  Their position as second in line will probably make them more amenable to a new arrangement.

For more information on defending your rights in a Florida foreclosure, contact our Jacksonville, Florida foreclosure law firm.

If your lender has sent you a Notice of Default – the first step in the foreclosure process – you may be wondering what happens next.  Will there soon be a knock on the door by someone who is going to throw you and your family out into the street?

Thankfully, the answer is no.

Actually, your lender probably doesn’t want to foreclose on your home and will usually take its time in foreclosing.  This is not only because lenders now own way too many foreclosures, but it is also because they must spend money to maintain the property and a home in foreclosure continues to lose value.

This means that your lender may be more willing than they had been previously to negotiate with you for a loan modification, short sale or deed-in-lieu of foreclosure arrangement.

If not, and your home is scheduled for sale at a sheriff’s auction, you may still be able to get your home back since Florida has a right of redemption statue.  This means that if you can pay in full the unpaid loan balance plus costs, you can reclaim your home.  And even if you cannot, this still buys you some time before you have to vacate your home.

If you are a Florida homeowner facing possible foreclosure and need help, contact our Jacksonville, Florida foreclosure law firm.

May bankruptcy filings across the U.S. were up 10 percent from the same month one year ago, according to data released earlier this month by Automated Access to Court Electronic Records (AACER).

Florida accounted for seven percent of the 133,459 U.S. bankruptcy petitions filed in May, second only to California with 16 percent.  Average filings per day also increased over April 2010, from 6,646 to 6,673 in May.

For the first five months of 2010, U.S. bankruptcy filings total 659,516, up 15 percent from the same period in 2009.  This includes 622,798 consumer bankruptcy filings, 36,718 business filings and 6,048 filings to reorganize under Chapter 11 bankruptcy protection.

Financial experts note that bankruptcies usually peak between six and 18 months after an economy hits bottom, because consumers typically try to work their way out of debt for a period of time before filing bankruptcy.

Consumers who find themselves dedicating more than 30 percent of their net income to repaying debt, with no savings for retirement or emergencies may want to consider a Chapter 7 or Chapter 13 bankruptcy filing.

If you need to information on filing Florida bankruptcy, contact our Jacksonville, Florida bankruptcy law firm.

Bankruptcy, a federal law enacted by Congress, provides a method for individuals to handle their debts when they can no longer pay for them.  Individual consumers typically file Chapter 7 or Chapter 13 Bankruptcy

Chapter 7

A Chapter 7 Bankruptcy can only be filed once every 6 years.  This type of bankruptcy will allow you to keep most of your property and discharge most of your debt.  At the conclusion of your Chapter 7 case, you will receive a “DISCHARGE,” which is a statement declaring that you no longer owe money to creditors listed in you Bankruptcy Petition.

Chapter 13

A Chapter 13 Bankruptcy reorganizes your financial affairs and proposes a bankruptcy plan to repay your all creditors all or part of what you owe them over a 3-5 year period. In order to file under chapter 13, you must have a regular source of income that will be sufficient to make the payments over the 3-5 year period.  The Bankruptcy Court must approve the plan and payments are administered to a Trustee who distributes the payments to the creditors. After all the payments from the approved plan are made, you will receive a discharge from liability for most debts.

Strategic defaulters – those who walk away from their homes – are the new target of Fannie Mae, the mortgage giant that says it will pursue deficiency judgments against any borrower it can prove strategically defaulted on a home loan.

According to recent statistics, nearly one-third of all mortgage defaults are strategic.

Fannie Mae says it has instructed its servicers to monitor all delinquent loans on the verge of foreclosure, and recommend cases for pursuit of deficiency judgments where allowed by law. A deficiency is the amount between what the borrower owes and what the lender is able to get for the property in foreclosure.

In Florida, creditors are allowed to pursue a deficiency judgment for one year following a foreclosure. If a deficiency judgment is not requested as part of a foreclosure proceeding, then the creditor has up to five years to file a new deficiency action.

Fannie Mae said it would base its assessment of strategic defaults by examining a borrower’s household income, credit report and documentation on prior loans. If a borrower is found to be a strategic defaulter, Fannie Mae will pursue a deficiency judgment and tack on any additional costs for repairing or renovating the abandoned home.

In addition, strategic defaulters will not be allowed to secure a Fannie Mae loan for seven years following the foreclosure.

The Federal Home Loan Mortgage Corporation – commonly known as Freddie Mac – said in its September economic outlook that existing home sales will decline more than 20 percent in the third quarter compared with the same period one year ago.

Freddie Mac said that continued high delinquencies, foreclosures and falling home sales have all contributed to a lack of confidence in a housing recovery, and that the main issue for the housing market outlook is how much of declining sales can be blamed on home sales that were pulled forward by the federal homebuyer tax credit that expired in June.

In its September outlook, Freddie considered two scenarios for how the market might respond following the end of the government stimulus. The first scenario assumes that about 600,000 homes were pulled forward because of the tax credits, and that these will be paid back over a gradual recovery.

The second scenario supposes that only 300,000 homes were pulled forward and the rest were sales that would not have happened without the tax credit. Under this scenario, sales would recover must faster, maybe even by the end of October.

Freddie also predicted that the 30-year fixed-rate mortgage rate would increase gradually over the next six months, passing 5 percent in the last quarter of next year, and that unemployment would decrease to 8.6 percent by the end of 2011.

If you are a Florida homeowner who is interested in learning more about how to avoid foreclosure, contact our Jacksonville foreclosure defense law firm.

The Better Business Bureau has issued a warning to consumers that while the housing market may not be thriving, the foreclosure rescue scam business is booming.

In a press release, the Bureau quoted statistics from U.S. Government Accountability Office (GAO) and Federal Trade Commission reports about foreclosure rescue and loan modification scams that primarily consist of two main types: the advance-fee loan modification scheme and the sales-leaseback scheme.

In the advance-fee scheme, scammers promise that they can get a homeowner’s loan modified to avoid foreclosure if the homeowner pays an upfront fee, usually around $3,000. The scammer takes the money and does nothing.

In the sales-leaseback scheme, the scammer persuades the homeowner to sign the deed over to them by offering to pay the mortgage while charging the homeowner a lower rent. They promise to sell the property back eventually, but they often take another loan out on the home or even sell it out from under the original owner.

The Bureau advises consumers to look out for these red flags and avoid any business that:
• Guarantees to stop the foreclosure process
• Tells homeowners not to contact their lender, attorney or credit counselor
• Collects an upfront fee before doing any work
• Instructs homeowners to make mortgage payments to them instead of their lender
• Encourages homeowners to lease their homes and buy back over time
• Asks homeowners to transfer their deeds to them
• Pressures homeowners to sign paperwork they do not understand

If you are a Florida homeowner who is interested in learning more about how to avoid foreclosure, contact our Jacksonville foreclosure defense law firm.

The Northeast Florida Association of Realtors reports that over 51 percent of the 1,316 existing home sales in Jacksonville were distressed properties – homes that are in foreclosure, bank-owned or included in a short sale.

As a result, the median price of existing homes sold fell 13.3 percent in August from the same month one year ago in the Jacksonville metro area, which includes Clay, Duval, Putnam and parts of Nassau and St. Johns counties.

The association also reported that Jacksonville metro area pending sales – which is an indicator of future sales activity – rose in August, with 16.6 percent more homes under contract and waiting closing than during the same period last year.

The Orlando Regional Realtor Association reports that while home sales in the Orlando area rose almost 11 percent in August compared to the same month one year ago, short sales and foreclosures continue to dominate the market and contributed to a decline in sale prices of almost 22 percent.

According to the association, bank-owned foreclosure properties and short sales made up over 71 percent of August 2010 sales in the Orlando metro area, which includes Orange, Seminole, Osceola and Lake counties.

The median existing home sale price dropped from $128,000 in August 2009 and $108,700 in July 2010 to $99,900 in August of this year.

U.S. Bankruptcy Court Judge John Dalis rejected a late bid from Starwood Capital Group for the Sea Island Co. luxury resort, saying it must wait until an Oct. 11 auction if it wants to buy the property.

Starwood’s cash bid of $199 million is $1.5 million higher than the bid from Oaktree Capital Management Group LP, Los Angeles and Avenue Capital Group of New York that Sea Island had already accepted. Starwood was in on the initial bidding process this past summer, but dropped out.

Dalis said it would be unfair to permit Starwood to submit a higher bid now, and that they must wait to vie for the luxury resort property at a bankruptcy auction scheduled for Oct. 11 – just one day following the resort’s first PGA Tour event.

Attorneys for an unsecured creditors’ group asked Dalis to block the Oaktree-Avenue sale in favor of the Starwood offer. They said that the higher cash price would help ensure that unsecured creditors are paid.

According to the Chapter 11 bankruptcy filing, Sea Island Co. owes almost $500 million to Synovus Financial Group, Bank of America and Bank of Scotland, which would also benefit from a higher cash sale price.

Sea Island was founded in 1928 and has been a favorite vacation spot of several U.S. presidents. The luxury resort includes the Cloister Hotel, three other resorts, four golf courses and two private clubs.

A national survey of bank risk officers found that few expect credit standards to be relaxed this year, and more than half believe credit standards may tighten even more.

The Professional Risk Managers’ International Association (PRMIA) conducted the survey for credit score company FICO in July with risk professionals, asking them for their outlooks for the next six months for credit delinquencies, consumer credit demand and the lending environment.

With personal bankruptcy filings at their highest levels in five years, FICO chief research officer Andrew Jennings said it is “difficult for lenders to open up the flow of credit without taking on significant risk.”

Nearly 53 percent of the risk managers said they expected mortgage delinquencies to increase and about one-third said they expect them to remain the same.

Risk officers also said they expected consumer appetite for credit to increase; however, they expect creditors to maintain conservative lending practices. Over 46 percent said they expect credit approval criteria to become more strict, and 65 percent said they expect that the amount of new credit extended to consumers will decrease or hold steady.

Over 50 percent said they expected credit card delinquencies and charge-offs to increase. Not surprisingly, 99 percent of bank risk officers surveyed said they expect their institutions to either increase or maintain the same priority on risk management.

It is probably no stretch to say that millions of Florida residents are struggling financially, due to the state’s high unemployment rate (two points higher than the national average) and the housing market crash.

If you are one of these, you may be wondering not only if filing bankruptcy is a good option for you and your family, but how you will know when the right time is to seriously consider it.

The American Bankruptcy Institute has provided a useful bankruptcy checklist for consumers and says that if several of these apply to you, you might consider bankruptcy:

• You have had your paycheck or your bank account garnished;
• The majority of your debt is unsecured debt -- credit card bills, medical bills, etc.;
• The amount you owe creditors – beyond your house and car payments – is more than you could pay off in five years;
• You are getting calls from collection agencies;
• You are have more than one bill that is more than one month past due;
• You have had lawsuits filed against you by creditors;
• A large portion of your debt includes medical bills that your insurance does not cover;
• Your income taxes have not been paid;
• You do not have many assets;
• You have no – or very little – savings;
• You have had a car or other property repossessed;
• Your home is currently threatened by foreclosure.

If you answered “yes” to three or more of these, you should contact our Jacksonville bankruptcy law firm about a free initial consultation.

Blockbuster – the video rental chain that got its start in Florida and was for many years held up as an innovative business model – filed for Chapter 11 bankruptcy protection on Sept. 23 in Manhattan. The company, now based in Dallas, wants to shed $800 million of its $900+ million debt load, and says that a majority of its secured debt holders have agreed to its restructuring plan.

The Chapter 11 bankruptcy filing listed $930 million in debt, including $630 million in secured debt and $300 million in unsecured debt. The company has over 25,000 employees and 3,306 stores as of the end of August.

According to the court filing, Blockbuster fell victim to increased industry competition and new distribution channels (kiosks, digital downloads, mail order). The company tried to avoid bankruptcy by closing over 1,000 stores during the past two years and cutting expenses, but had a poor fourth quarter in 2009 when it reported a loss of over $500 million. Blockbuster also tried to bring in strategic partners, but discussions fell through.

Blockbuster sought Chapter 11 bankruptcy protection so it could restructure its business operations without a huge debt load, which would enable it to compete more efficiently with new competitors and capitalize on emerging technologies in video delivery to consumers.

Perhaps the greatest source of relief for distressed debtors who file bankruptcy is what is known as the automatic stay. As soon as your bankruptcy attorney files your petition, the automatic stay goes into effect – meaning that creditors must stop all their collection efforts, including phone calls, letters, lawsuits or anything else they are doing to try to collect on a debt.

The automatic stay also prevents secured lenders – those who hold your mortgage or car loan note – from repossession, foreclosure or selling any of your property. However, when it comes to secured creditors, these benefits are temporary – if you do not keep up with your payments after your bankruptcy is over, secured creditors can still proceed with a foreclosure, repossession or sale of your property.

There are also some exceptions to the automatic stay, including alimony, child support, student loans, most taxes and criminal restitution.

If you have filed Chapter 7 bankruptcy, the automatic stay terminates as soon as your Chapter 7 bankruptcy is discharged (closed). If a majority of your debt is unsecured (credit card debt, medical bills, etc.), you will not care that the automatic stay has expired because that debt will have already been wiped out through the Chapter 7 bankruptcy process.

However, if most of your debt is secured debt, then you should consider filing Chapter 13 bankruptcy, which extends the automatic stay throughout your repayment period of three to five years. Plus, the automatic stay in Chapter 13 bankruptcy filings also protects anyone (spouse, parent, etc.) who may be responsible for the same debt as you are.