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Bankrupt Homeowners Shed Second Mortgages

Bankrupt Homeowners Shed Second Mortgages

May 12, 2011 – Stung by the crash of the housing market, some struggling homeowners are using a little known but increasingly popular provision of the bankruptcy code to eliminate second mortgages and avoid foreclosure.

Statistics are hard to come by, but bankruptcy lawyers say the provision has been used effectively on hundreds, if not thousands, of cases in the San Francisco Bay Area during the past two years.

“It’s a big thing in our valley,” said James “Ike” Shulman, a San Jose bankruptcy lawyer. “But it’s not widely known.”

Shulman, co-founder of the National Association of Consumer Bankruptcy Attorneys, said he has helped a number of clients who have filed for personal bankruptcy use the law to hold on to their houses – including three last week.

Cathy Moran, a Mountain View, Calif., bankruptcy lawyer, said one of her clients had a $132,000 second mortgage voided by the court.

“This is a really big-ticket issue that allows people to keep a home and conform the mortgage to something closer to real value,” Moran said.

Bankruptcy laws prevent homeowners from eliminating the debt of a first mortgage if they plan to stay in their home. But second mortgages are treated differently. They can be declared unsecured debt when there is no equity to cover them, as is the case for millions of houses that are now worth far less than a few years ago.

When that happens in a personal bankruptcy proceeding, the second mortgage is put on hold and no payments are required while the homeowner completes a repayment plan for other debts, which typically takes three to five years. At that point, the second mortgage is eliminated.

Many of these second mortgages were granted during the housing bubble, when home prices were going in one direction only – up, up and up.

“A lot of these are loans that shouldn’t have been made at all,” said Henry Sommer, editor of Collier on Bankruptcy, a publication on bankruptcy law.

One of Shulman’s clients, Veronica – who asked that her full name not be used – was struggling to keep the San Jose house she bought in 2005 for $612,000.

Her home’s value has dropped to about $367,000 – less than her first mortgage of $489,000 – which allowed her to petition the bankruptcy court to set aside her $122,000 second mortgage. The court granted her motion.

She successfully completed her payment plan for other debts two months ago, and her second mortgage is now eliminated.

“It’s wonderful,” she said. “After almost six years, I am finally able to see the light at the end of the tunnel, and I’m so, so grateful.”

Mortgage bankers don’t like the practice. It’s “a troublesome phenomenon. It’s one of those things that’s just now developing and bubbling up,” said Dustin Hobbs, spokesman for the California Mortgage Bankers Association. But there is little the mortgage industry can do, aside from seeking to change the law. That could be difficult given the current partisan lineup in Washington.

And there are no complaints from investors in first mortgages, like the pension and retirement funds represented by the Association of Mortgage Investors. “We think with the right controls, something like this to allow a responsible, distressed homeowner to reorganize their assets, liabilities and cash flows is a very pro-business proposition,” said Chris Katopis, the association’s executive director. “We disagree with what the mortgage bankers associations are saying on this.”

The law has been like this for years, bankruptcy lawyers say. It’s just never been used as much because in the past there was usually enough equity in a home to cover the second mortgage.

“We’re having great results” using the rule, said Brette Evans, a San Jose bankruptcy lawyer. In one recent case, a small-business owner was able to hang on to her home by setting aside a $240,000 second mortgage, she said.

That put the borrower in “a safe zone” where she could work out a modification of her first mortgage, Evans said.

© 2011 San Jose Mercury News (San Jose, Calif.). Distributed by McClatchy-Tribune Information Services.
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Clearwater Real Estate News | Guess What Percentage Of Tampa Mortgages Are Paid On-Time?

Clearwater Florida Real Estate News

Clearwater Florida – The current economic conditions are being felt all over and it’s also being seen in the rise in mortgage delinquencies nationwide, but the mortgage news may not be as bad as it appears at first glance.
Mortgages 60 days past due, as reported by TransUnion

Using anonymous data from its national credit database, TransUnion reports that 4.58 percent of American homeowners were at least 60 days past due on mortgage payments last quarter.

Comparing the statistic to the data from a year ago, the credit reporting agency goes on to say that mortgage delinquencies are up 53 percent and Florida is adding to this.

Although fair, the comparison carries a distinct, negative connotation because if we flip the data to its positive, the statistics don’t seem nearly as menacing.

Consider: In the last quarter of 2008, 4.58 percent of all  homeowners were delinquent on their respective mortgages.  The positive sign, therefore, is that 95.42 percent of home owners were not delinquent on their home loans.

Furthermore, in looking at TransUnion’s data for the 5 largest states in the Union, it’s clear that the national delinquency rate is being skewed by California and Florida.  New York and Texas, for example, exhibit delinquency rates below the national 4.58 percent marker.

North Dakota’s delinquency rate hovers near 1 percent.

Headlines are designed to attract eyeballs and nothing else – they seem to focus on the fact that the “glass is half empty” . To get the complete story, therefore — the real story — it never hurts to dig a little deeper into the facts. Even looking at Florida’s numbers – why doesn’t the news ever mention the 91%+ of  Florida home owners that are paying their bills on time.    When looking at “the glass as half full” we see that their are great bargains for Clearwater  home buyers buying now, especially for first time home buyers (anyone who hasn’t owned a home in 3 years)  qualifying for the $8000 tax credit for property purchases in 2009 (need more info on this just ask us).

Thinking of Buying or Selling a house in Clearwater Florida – We can help

Clearwater Beach Florida best beachIf you have been thinking about buying or selling a home in the Clearwater St Petersburg Tampa area…

Contact us for a FREE quote and to find out your Tampa Mortgage options and you can search all Tampa St Petersburg and Clearwater homes for sale right now..

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Copyright © 2007-2009 Jack and Cyndee Haydon, Clearwater REALTORS and your Clearwater Real Estate Consultants specializing in Clearwater St Petersburg Tampa Florida Real Estate and may not be copied, reproduced, distributed, transmitted, displayed or published.

(Image courtesy: TransUnion)

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Clearwater Florida Real Estate News – An Interactive Chart For Home Values

Visual Case-Shiller Index from the New York Times
Clearwater Florida – The S&P/Case-Shiller Home Price Index is a popular measure of domestic home prices, released monthly. 
The index reports on the largest 20 U.S. markets, painting a broad picture of real estate values nationwide.
Despite the Case-Shiller Index’s two obvious flaws — (1) it only counts repeat sales on single-family residences, and (2) it only includes 20 major housing markets — the model makes it easier to identify broader real estate trends in our nation’s largest cities.

Data, though, is just data.  It often takes a good picture to bring it all home.  Enter The New York Times.
On its website, The Gray Lady has posted an interactive Case-Shiller graphic.  For each of the 20 cities studied, users can compare how home values rose versus the national composite throughout the early part of the decade, and how values have fallen since. 
Not surprisingly, of the 20 cities that showed stable growth pre-2006, nearly all are outperforming in the current real estate climate.

Thinking of Buying or Selling Tampa St Petersburg Clearwater Homes 

Clearwater Beach Florida best beachIf you have been thinking about buying or selling a home in the Clearwater St Petersburg Tampa area…

Contact us for a FREE quote and to find out your Tampa Mortgage options and you can search all Tampa St Petersburg and Clearwater homes for sale right now..

Call Us Today at (727) 710-8036 to hear more about how we can help you!

Copyright © 2007-2009 Jack and Cyndee Haydon, Clearwater REALTORS and your Clearwater Florida Real Estate Consultants specializing in Clearwater St Petersburg Tampa Real Estate and may not be copied, reproduced, distributed, transmitted, displayed or published.

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Pinellas County Real Estate Update – Property Tax Amendment 5 Ripped from November Ballot

Pinellas County Florida – Well all home owners, investors and others got some bad news today – Leon County Circuit Court ripped Amendment 5 off the November ballot.  We still have a chance because the State will appeal the ruling and it will ultimately be decided by Florida’s Supreme Court. 

Govenor Crist Weigh’s In on Court’s Ruling

In the Florida Capital News Crist weighs in. Crist said Cooper’s ruling “doesn’t mean anything” because whichever side lost was certain to kick it up to the Supreme Court. “I was disappointed but not dismayed. It will be appealed – I think everybody knows that,” said Crist. “I hope it stays on the ballot because I like the will of the people. I want them to weigh in. I want them to have that power because they’re the boss.”

The Florida Association of Realtors, which supported the amendment, decried Cooper’s ruling saying “Homeownership is a fundamental right, and Floridians deserve a say on how their property is taxed,” said Chuck Bonfiglio, president of the Florida Association of Realtors, in a prepared statement. “We are shocked that the court decided to deny property owners’ the ability to dramatically lower their property tax rates.”

We as Clearwater Realtors and home owners we are definitely planning to Vote YES for Amendment 5 Property taxes. We believe it’s good for Clearwater Real Estate buyers, residents and renters because everyone should experience savings.  We also believe it will help home sellers since it will make homes more affordable and more appealing to buyers who do not qualify for homestead exemptions.     

Did you know that Florida property taxes have doubled over last 6 years?

Amendment 5 is proposing a sales tax 1% or less to fund education.

If approved it is predicted that Florida property owners could see 25-40% property tax deduction in 2010 if Amendment 5 had passed. This would help local Floridians across the board by sharing the cost of education with all local residents and tourists.  

One of the most important things Amendment 5 will do for our clients (people buying vacation homes or invests in Clearwater Beach and the Clearwater area)  is provide a  5% annual property tax cap on all non-homestead property (which was set at 10% this past February)  It’s important for Florida home owners to understand what’s at stake.  

Additional aritcles discussing Amendment 5 being removed from the ballot:

 

Amendment 5 creates these projected savings for Tampa Bay property owners

Amendment 5 Property Tax Details

  You can get more details on the Amendment 5 proposal at Give Me 5 Florida and the actual Amendment 5 property tax proposal.  Benefits: Amendment 5 would have provided much-needed tax relief to Florida’s seniors, many of whom fear losing their homes because of an inability to pay higher property taxes on a fixed income.  

Amendment 5 proposal built on what Ammendment 1 already gave us: 

Other articles of interest

                       ** CLICK ON PHOTOS BELOW TO SEE CLIENT VIDEO TESTIMONIALS **

Buyers and Sellers tell us that selecting the best Clearwater Beach real estate agents especially online or from a distance, can be a challenge. Some of our past clients agreed to share their experiences and tell you why they think you should work with us. 

Click on the photos below and meet some of our clients and now friends…wed love to be YOUR choice too!   Video photo noreen cathy collins daughter  Video photo francine sinclairVideo photo cathy collinsClearwater Real Estate Agents Get Kudos from Vacation Golf Home Buyers

 

 

 

 

The above information and images are Copyright © 2007 Jack and Cyndee Haydon,  Clearwater  REALTORS and your Clearwater Real Estate Consultants serving Pinellas County and may not be copied, reproduced, distributed, transmitted, displayed or published. All rights reserved. Plagiarism will be detected and is punishable by law.

Call us Today at (727) 710-8036 to hear more about how we can help you sell your home or buy a new one! 

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Pinellas County Schools Assignment Update at Pinellas Realtor Organization

Presentation to Pinellas RealtorsClearwater Florida – Wednesday I was one of about 50 Pinellas County REALTORS (out of 9000 members of the Pinellas Realtor Organization) who attended a special session with Jim Madden from Pinellas County Schools.  

Jim is the man in charge of Pinellas County student school assignments – he joked that “he’s got job security” – I can only imagine :). We recently had changes to the School Choice plan and Pinellas County home buyers and current residents have lots of questions about..

Where will by child go to school?” -That’s why we made sure we were there - up-to-date information is critical to the families we help that are moving to Pinellas County or want to sell their home and move within the county.  The most important thing we took away was the fact that No school is automatic for non-entry level grade students.

If you’re wondering how we got here – School Choice was court-ordered to end the 30 year desegregation ruling / plan in Pinellas County. The 2007/2008 was the first year that the School District didn’t have specific min / max ratios to manage for each school.

When creating a new plan the parents, the community members and the School Board members found people overwhelmingly wanted a Student Assignment plan that included these 3 things:

  1. Give us Predictibility
  2. Still wanted Choice(s)
  3. Diversity

A major issue is the rising cost of transportation.  In the future, Pinellas County will continue to transport students to their school of “Choice” for 4 more years then parents will have to provide transportation to their “non-close-too-home” school.

Note: The new Pinellas County Student Assignement plan doesn’t change anything for Magnet and Fundemental schools          

Key Components of the new Pinellas County School Plan

  1. Transition from the Pinellas County Choice Plan
  2. Getting Back to Close-to-home schools or zoned schools
  3. Predictable feeder patterns
  4. Multiple choice options
  5. Reduce transportation issues and costs
  6. Diversity
  7. Equitable distribution of resources

What Pinellas County Home Buyers / Residents Should know during the Transition Period

  1. All students except those entering Kindergarten, 6th grade and 9th grade – will stay where ever they were last year
  2. Students entering Kindergarten, 6th grade and 9th grade will get their close-to-home school this year (or they can also opt for an older sibling’s school)   
  3. New students (not in one of the 3 grades listed above) are assigned on a space available basis to the close-to-home school or the next closest school. The challenge here is that the Florida Class Size Amendment limits the number of students that can be assigned to a school.
  4. 3 schools were closed this year – South Ward, Largo Central and Riviera Middle that are impacting mid county assignments

Jim Madden explains how new School Assignment will work to Pinellas County REALTORS 

 I’ve included some video of Jim’s presentation so you could hear how Pinellas County School assignments will be handled in Jim’s words:

 

 Jim talks about the new Pinellas County Student Assignment software and interactive map functions that are coming soon (hopefully by mid-September)  

  

 

Got More Questions? 

  1. If you have any questions you can contact Jim Madden directly at 727-588-5186 or email him at maddenj@pcsb.org or
  2. Call the Student Assignment Department at 727-588-6210 or
  3. District Call Center at 727-587-2020
  4. Visit their website at www.Pinellask12.fl.us

What do you need to enroll in school?  Proof of residency – a power bill, rent receipt, cable bill, phone bill, etc. – in some cases a purchase contract to buy a home or a lease agreement will also be accepted. Exceptions handled on a case by case basis.

Pinellas County Real Estate matches up to Pinellas County Schools

Get 25% more Property tax savings in November

Buying Pinellas County Real Estate less Complicated Now

Want more info about all our Pinellas County Real Estate – feel free to call Cyndee and Jack,your Pinellas County Realtors at (727) 710-8035. Want to see all the Pinellas County homes for sale – Feel free to search the Tampa Bay MLS.

Cyndee and Jack Haydon, Clearwater Real Estate Agents,  Charles Rutenberg Realty 1545 S. Belcher Rd Clearwater FL 33764

Call me at (727) 710-8035

About Cyndee Haydon

Cyndee Haydon, Realtor with Future Home Realty specializing in luxury waterfront and beach homes of Clearwater Beach - St Pete - Tampa Bay area with her husband and partner, Jack Haydon Cyndee's Google Profile

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