An Exciting Announcement… and Information You Can Use Today
For some time our readers have asked, begged and pleaded for us to bring back the Default Research Home Stand. At first, we didn’t realize just how popular it was with readers like you. We’ve heard your messages loud and clear, so I’m happy to report that it’s back!
Before we dive into this month’s feature article, I need to let you know of a few powerful changes we’ve made to the Default Research user interface. You now have the ability to:
- Change the way and/or timing of how you receive Default Research data
- Reactivate your account with just a click of your mouse, 24/7/365, to ensure that you remain in control of the flow of your Default Research information
- Update your billing and/or contact information online, including the ability to cancel your account or change payment methods without needing to send an email or a fax.
To check out the improvements we’ve made, go to https://www.defaultresearch.com/customer.php/info
Because you work hard for your money you have better things to do with your precious time resources than email us and wait for someone to resolve minor account-related issues that could just as easily be handled online. You asked for this improved site functionality; now you can enjoy a more streamlined experience — on your terms.
Beginning today, the Home Stand will help you demystify the foreclosure process in all the states we cover, in addition to telling you about some of the other legal/administrative issues with which you’ll need to be familiar. Florida is the first state we’ll dive into. The reason? Florida real estate is ripe for investment at this time, but before you invest a penny of your money, you need to understand the foreclosure process, especially if you’re going to tap into the foreclosure or pre foreclosure markets. To read more about Florida foreclosure law — and how you can capitalize on today’s unique buying opportunities.
Demystifying Florida Foreclosure Law
Florida’s foreclosure process operates under a judicial process, meaning that the courts are involved in every step of the foreclosure process. Justice may be blind, but it can also be slow. This is exceedingly evident within the confines of the Sunshine state; the average foreclosure takes 675 days to work itself through the court system according to the St. Petersburg Times (http://www.tampabay.com/news/business/realestate/foreclosure-crisis-tampa-bay-area-ranks-ninth-in-nation-in-length-of/1158222).
As I’ve mentioned, the foreclosure process is painfully slow (from the perspective of lenders who aren’t being paid). Once a mortgage payment is missed and the lender decides to initiate foreclosure proceedings — typically between 30-90 after the first missed mortgage payment — the lender’s attorney goes to court and files a lis penden (Latin, “a suite pending”). This filing is the first legal hurdle which must be crossed by the lender in their effort to regain physical possession of the foreclosed property. A lis penden filing clouds the title to ensure that potential purchasers of the property are made aware of the status of the mortgage, which sometimes deters potential property sales from moving forward.
If you’re interested in the pre-foreclosure market, lis penden filings can be a goldmine of information. The reason? Homeowners who are unable to make their monthly mortgage payments are seeking solutions to the financial circumstances in which they find themselves; a list of lis pendens filings can help you locate these homeowners. Many lenders are willing to consider short sales, but time is of the essence. The foreclosure process will continue to move forward, so it’s crucial that you be able to contact homeowners as early in the process as possible, to ensure that enough time remains to negotiate a short sale with the lender.
Florida Foreclosure Fraud Prevention Act
Until January 2010, few regulations and/or administrative guidelines stood in the way of those seeking to offer mortgage loan modification services. With the passage of the Foreclosure Fraud Prevention Act, a laundry list of new rules went into effect. Even if you’re not interested in performing mortgage modifications, short sales are also covered under this wide-ranging law. (I found a great short sale FAQ at http://www.myfloridalegal.com/mfraud/nsf/pages/law.)
Here are some of the other highlights of the Foreclosure Fraud Prevention Act (which applies to Florida-domiciled loan modification firms as well as out-of-state firms modifying mortgages of Florida residents):
- Fee Prohibition — Before this law went into effect, it was common for loan modification companies to charge up-front fees. These up-front fees are now prohibited.
- Documentation Requirements — In the past, it was common for unscrupulous loan modification firms to make verbal promises to desperate homeowners, then change the agreement after modification work had begun, resulting in complaints of fraud/misrepresentation. The law requires that a written contract be signed prior to work beginning, and that the contract clearly specify the terms of the agreement.
- Pricing Fairness — With a stroke of the Governor’s pen, the Foreclosure Fraud Prevention Act outlawed a sometimes-used practice of raising the repurchase price of a home to an unreasonable level. While the law doesn’t clearly define what is reasonable, it prohibits repurchase prices from being “unconscionable”.
As you can see, there are a number of legal provisions with which you need to become familiar. This article is just an overview. But if you plan to dip your toe into the Florida pre foreclosure, foreclosure or short sale real estate markets, it’s important that you familiarize yourself with the process. You’ll also want to get your hands on a good list of Florida lis pendens filings. Default Research makes these list available at http://www.defaultresearch.com/shoppingCart/listing/state/fl.