There certainly could be tax consequences for a short seller or foreclosure. The IRS is looking for what they call debt forgiveness. And they’re considering that income, and if that’s income then you would pay taxes on it. But that is only, at least the way the law stands today, if you were talking about an investment property.
If it’s your primary house you’re not going to get hit by that. And that’s also negotiable. A lot of times in my cases I’ll ask the bank to give what they call 1099 C for a thousand dollars instead of $150,000 in order to make sure that we limit the tax liability. So it’s something to be considered about you probably should consult your tax expert, if you really want to know the truth about it.
But this is enough to get you through.Close Transcript
You do not have to leave your home during the foreclosure process and that is something I’ve seen a few times now. People have every right to stay in there home until the foreclosure is not only a judgment is entered but a sale happens and after a sale they still have to get a writ of possession, which is when the sheriff comes out.
And then when the sheriff comes out and gives you 24 hours notice, that’s when you officially have to move your house. Until then you can rent it, you can live in it, you can have parties in it, whatever you choose to do, it’s your house. The bank only has a lien that they can’t do anything else with until they complete the foreclosure and the court says, "Now you can take possession of the house."Close Transcript
A lot of my clients have asked me, “Should I pay for my property insurance or not?” And the truth is, if you have the ability to pay for your insurance, you should. Even if it means getting a renters policy just to protect the contents of your home. Because if you don’t have insurance on your property, the bank force places insurance and that policy is six times the cost of what your regular insurance policy is.
And God forbid there’s a fire, or a hurricane, or something happens and your entire house blows away, you won’t get a check from the force placed insurance policy. That money will all go to the bank and not a dime to you. But if you have your own policy in place, you can recover for your personal belongings, your clothes, your jewelry, everything that you had in your insurance policy.
And that protects you. So if it’s possible to protect yourself, do it.Close Transcript
There’s always a question, do you pay your property taxes or not? And the truth is that this is one of the silver linings in foreclosure. Most of the banks have contractual obligations with the actual investors, people that own the loans, that says they’re gonna pay the taxes if you don’t. And the reason why they do that is because, if the property ever got sold for taxes, everybody loses.
The bank is knocked out, the other judgment creditors, anyone with a lien on the property gets wiped out, the property gets sold for taxes. And if per chance they don’t pay the taxes for you, it usually takes years, much longer than a foreclosure, for the property be sold at a tax deed auction.
And you’ll get notice of the tax deed auction before that sale happens. As long as you pay the taxes before the date of the tax deed sale you could save your property.Close Transcript
Foreclosures are absolutely different in every state and in every county within that state. There are lots of states that don’t even let you go to court. Florida is one of the states that you get, that they have to come to court and sue you and it becomes a regular law suit. And what you’re seeing now is, every county is dealing with it differently.
Broward is sending everybody for trial. As soon as you come close to the judge in Broward, they’re setting your case for trial. Dade has 20 different judges that are dealing with foreclosures and a bunch of senior judges dealing with trials. Palm Beach has two judges that are dealing with everything. So it’s important to know what county you’re in and whatever county you’re going as long as you have a trained trial lawyer who understands the issues, and the cutting edge foreclosure defense strategies and tactics.
You’ve got a chance to get some relief in whatever court you’re in.Close Transcript
What you need in a foreclosure defense lawyer is a lawyer that’s gonna defend your foreclosure. And I say that very seriously. There are lots and lots of lawyers out there doing this work who are transactional guys. Who don’t know fight in court, who don’t know anything about how to fight a foreclosure.
I’ve been training on these issues all over the country. I mean at seminars some of the best and brightest minds that do foreclosure work in New York, Las Vegas, Orlando, Charlotte, Shelby. This is where you learn the issues that you can fight about. And if your lawyer isn’t one of those types of people who’s willing to go to trial, who fights for discovery, who goes up against the bank with everything that he can bring as a trial lawyer, then you should find yourself another lawyer and you can do that.Close Transcript
The foreclosure process takes as long as it needs to. What does that mean? It means that it can happen very quickly if you don’t do anything to stop it. The banks can have your foreclosure done and over with in a matter of months and you’ll be out of the house. But if you fight, if you raise defenses, if you propound discovery and demand responses and fight about objections and do all the things that gives the bank a reason to come to the table settle, then the process takes a much longer time.
And years can go by. I still have some of my clients from 2008 so there’s no end to some of these cases. But it’s important to recognize the amount of work that you put in in preparing your defense is gonna be very, very important if you’re expecting to have this take any significant amount of time.Close Transcript
If you’re getting sued by a credit card company, you have the option to defend, and make them prove their case. It’s not getting any worse for you than it already is if you owe a $100,000.00, whether they get an extra $10,000.00 in legal fees on top of that, not gonna change your position at all. But what we’re seeing everyday is the banks are doing the same stuff there doing in foreclosures with credit cards.
[xx] signing, witnesses that don’t know what they’re talking about and issues that if you’re a good trial lawyer and you’re trained on these issues and you understand how they work, you can go to court and beat a lawsuit for $100,000 worth of credit card debt. I mean if you beat it you don’t have to file for bankruptcy and you can fix your credit and you don’t have to pay that money back.
So it’s important to know your rights and have a good trained trial lawyer to help you enforce those rights.Close Transcript
Foreclosure scams are everywhere and you always have to be on the watch out. Be very careful. Anytime you’re not dealing with a lawyer for starters, these loan auditing companies that will charge $4,000 and tell you you’ll your free house. Most of that is not true. The people who are out there trying to get your deed.
Asking for a deed to your property, run. They’re not there to help you. They’re there to take your property from you. Anytime you that get one of those things in the mail that looks like it’s from the government but it’s not really from the government, that’s a scam waiting to happen. So just be careful.
And what you really should do is consult a lawyer train in foreclosure defense if you really want to have a shot to keep your house.Close Transcript
Well first off recognize if your credit card company is harassing you. They may be stepping over the line themselves. There are laws that protect consumers in Florida like the Fairday [sp?] Collection Practices Act that will prevent a creditor from harassing you in certain ways. Some things they can do some things they can’t.
The important thing to do is to get some evidence together. Write down on a piece of paper every time they call, who calls, what number, what was said,if they are rude, or obnoxious, or use profanity, or threaten you, keep a record of all of it. You can record those calls. Get a tape recorder and record them.
But make sure you tell them that you’re recording them while you do it. And if they continue to talk they might be buying themselves a huge lawsuit and that’s something that we see oftentimes, when they finally do come to court, we can use to fight back. And once they get a fight back, most of these credit card companies would rather go on to easier prey. And that’s important to know.
You gotta be prepared to fight back.Close Transcript
If you get served with an order to show cause, it’s really important you go see a lawyer. The Florida legislature just passed the Florida Fair Foreclosure Act. Not much very fair about it and what it’s allowing the court, the banks to do is rocket these cases through expecting that people aren’t going to get their act together and be prepared to respond to this order to show cause.
What that order to show cause says is you have to come to court and explain to the judge why you shouldn’t be foreclosed on. Now in the hands of a skilled trial lawyer who knows the issues and is trained on the cutting edge strategies of foreclosure defense, that’s not gonna be a problem. But if doing it yourself or if you’re going to some lawyer who isn’t trained in those issues, you’re going to have a problem.Close Transcript
If you’re getting an order saying you’re in foreclosure case for trial, it usually means you’re on the rocket docket which means that you’re gonna’ go into court and there’s going to be 50 other cases set for trial that day. Now if you have a trial lawyer at your side that lawyer will be moving to shorten time to compel discovery, moving to compel orders on discovery, will be preparing for trial and will go to trial.
If your lawyer isn’t doing those things, you need to find a lawyer that does because when you actually get to trial the bank is not going to be giving you a continuance and they’re going to be giving you a 120 day sale date which is four months more on the property if you agree to take a judgment.
If you take that judgment they’re gonna come after you for deficiency judgment when that property gets sold. So if you get a trial order and you know you’re gonna go to trial, get yourself an experienced trial lawyer to help you out in that situation and go to trial. The worst that can happen is you get less than four months on the property.
After the trials over there’s still ways to keep that and extend that out. But if you win then there’s a whole different ball game.Close Transcript
If you can’t find a buyer for your property, there are some times that the bank will take it back without completing the foreclosure. They call that a deed in lieu, but the reality is that, you know, some banks won’t accept deeds in lieu or won’t waive the deficiencies if you do. It’s important that if you’re gonna ask for a deed in lieu that you position yourself and you make it until the bank has a choice to make.
Do they fight with you for that foreclosure or is it easier just to take the property back and agree to waive the debt. And those are choices that you’ll be able to make when you have a good lawyer at your side helping you figure out those strategies.Close Transcript
If the bank can’t find your mortgage, they can still foreclose on you. But it becomes a lot harder if you are a good trial lawyer who is trained in the issues that involve foreclosure defense, and you can make it difficult for them. The level of proof that they need to come to court with to explain that they did in fact have the note, and then they lost it somehow, and they can re-establish it, and there’s a whole body of law that deals with that issue, and what we find is, more often than not, they never got the note in the first place.
And if you know what you’re asking for, and you know how these transactions were supposed to work, then you ask them where the dead body is, which you know should be here, and if it ain’t there, then they’ve got problems, and that’s when you can start doing some real damage in these foreclosure cases.Close Transcript
A short sale is how the bank wants you to resolve these foreclosure cases. If you’re upside down on your house, if you owe more than it’s worth, you can’t just sell it because you can’t sell it for what you owe on the property. So, when you go and ask the bank for a modification they put you through a whole ring-em-a-role and if you learn anything about it you know that most of it was just delay games and tactics for the banks to make more money while they never chose to help you.
Now the reality is that if you do a short sale, you’re selling the property for a price the bank is willing to accept. And if you do that you want to make sure you get a deficiency waiver. The bank agrees not to come after you for the balance of that you owe. If you are in a situation where you’re doing a short sell and you do not get that waiver, they’re going to come after you.
And I have plenty of clients who I’ve had to help out of that mess. It’s not a good idea. Don’t do your short sale unless you get the deficiency waiver.Close Transcript
If you’re in foreclosure, make sure you pay your homeowner’s association or your condo association. Keep those dues current. They’re usually a lot less expensive to carry than the mortgage and there’s no defense to not paying your condo association fees. Your neighbors are the ones who are gonna have to pick up the tab if you don’t pay that so you’ll get dirty look around the complex if you let those slip and at the end of the day the condo association forecloses on you they’ll get you a lot faster than the bank ever could. They could take your rent if you’re renting the place, and you’re delinquent. They could lock you out of the common areas, lock you out of the elevators, lock you out of the pool. You want to be a good neighbor and fight with the bank because that’s where you can really make the most leverage for your living.
And it’s important that you protect your house as long as you can.Close Transcript