Friday, October 26, 2012

Fannie & Freddie - May deal with you afterall

Many of our clients are underwater with their home mortgages.  They come into our office to discuss their options - short sale, stay, try to do a work-out with lender- its a tough road.  If you have never missed a payment on your property and are not delinquent, not all lenders will deal with you. 

The following article is defintely newsworthy and interesting for those with Fannie and Freddie mortgages:

WASHINGTON – Oct. 25, 2012 – Mortgage giants Fannie Mae and Freddie Mac have issued new rules effective Nov. 1 that will allow short sales for underwater borrowers who have never missed a mortgage payment. Previously, Fannie and Freddie allowed only homeowners who had missed payments to qualify for a short sale.

However, eligible short-sale owners will need to show a hardship to qualify for a short sale under the new rules. Hardships may include unemployment or the death of a spouse.

The new rules won’t help credit scores, however. The non-delinquent short sellers will likely take just as big a hit to their credit score as delinquent homeowners who have missed loan payments and gone into foreclosure, according to Kenneth Harney, writing in Inman News.

“Under current national credit reporting practices, those non-delinquent borrowers are likely to be treated the same for credit scoring purposes as severely delinquent owners who go to foreclosure after months of nonpayment, or who simply toss back the house keys and walk away in strategic defaults,” says Harney.

Credit agencies have no special coding that indicates a short sale occurred without an accompanying delinquency. Therefore, homeowners could see their credit scores drop 150 points or more after a short sale.

However, officials at the Federal Housing Finance Agency (FHFA), which oversees Fannie Mae and Freddie Mac, say they are “in discussions with the credit industry” to explore ways to fix the credit score problem for people who haven’t missed a payment before undergoing a short sale.

Source: “Damage to Credit Scores Could Trip Up New Fannie, Freddie Short Sale Program,” Inman News (Oct. 23, 2012)

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Tuesday, October 23, 2012

Construction in 4 Fla. Cities up 9.6%

CHICAGO – Oct. 22, 2012 – For major-metro regions in Florida – Jacksonville, Miami-Fort Lauderdale-Pompano Beach, Orlando-Kissimmee-Sanford, Tallahassee, and Tampa-St. Petersburg-Clearwater – had an increase in actively bid construction projects, according to the third-quarter BidClerk Construction Index (BCI). This increase covered both private and public construction projects that grew year-over-year and quarter-over-quarter.

Overall, Florida actively bid construction activity increase of 9.6 percent compared to one year earlier. Private construction rose 19 percent, while public construction rose 4.3 percent.

In a quarter-over-quarter analysis for all construction projects, the major-metro regions in Florida saw an increase of 12.3 percent. Third-quarter public projects saw an increase of 20.8 percent compared to the second quarter of 2012, while private projects increased 1.4 percent.

In a year-over-year analysis for the Miami region, actively bid public and private construction projects rose 10.8 percent compared to one year ago. Private projects increased 22.4 percent and public projects increased 4.4 percent.

Quarter-over-quarter, combined private and public construction projects in Miami increased 12.3 percent. Private projects rose 2.8 percent and public projects rose 19.3 percent.

In a year-over-year analysis for the Orlando region, actively bid public and private construction projects dropped 4.4 percent compared to one year ago. Private projects decreased 3.1 percent and public projects decreased 5.6 percent.

Quarter-over-quarter, combined private and public construction projects in Orlando decreased 3.3 percent. Private projects decreased 4.5 percent and public projects dropped 2.2 percent.

Tampa-St. Pete
In a year-over-year analysis for the Tampa-St. Pete region, actively bid public and private construction projects rose 24.5 percent compared to one year ago. Private projects increased 23.7 percent and public projects increased 24.9 percent.

Quarter-over-quarter, combined private and public construction projects in Tampa-St. Pete increased 16.9 percent. Private projects decreased 9.1 percent and public projects rose 37.8 percent.

Nationally, actively bid combined public and private construction projects increased 3 percent in the third quarter of 2012, compared to the same quarter a year ago. Third quarter 2012 public construction increased modestly, rising just 0.2 percent, while third quarter 2012 private construction rose 12.3 percent, year-over-year.

BidClerk, a provider of construction project data and marketing tools for building product manufacturers, contractors and distributors, releases the BidClerk Construction Index quarterly.

Article can be found at:
Florida Realtors

Wednesday, October 17, 2012

How long does it take to probate in Florida?

As Florida lawyers, we are often asked how long a case or proceeding will take - start to finish.  The answer is not easy. 

This post is meant to address the common question, "How long does it take to probate in Florida?".

If everything runs smoothly, it takes 4 months.

The probate process is basically a three part process: assets are located, creditors are paid, and the beneficiaries recieve what is left (distribution).

If the decedent was organized, then locating assets can be simple and take days or a few weeks. If the decedent had a lot of assets and did not leave them organized, then locating the assets can take longer. If probate takes longer than 4 months, it’s usually because of the amount or complexity of assets.

The next part is paying the creditors.  However before paying them, the creditors have to be found. This is done by publishing a notice to creditors in the legal newspaper and giving them 3 months to file a claim. In addition, a copy of the notice to creditors is sent to every possible person who might be a creditor. At the end of the 3 month creditor claims period, the creditors are known and paid, if all goes smoothly. If this takes longer than 3 months, then it’s usually due to a disputed claim or a problem with taxes.

Finally, after the 3 month creditor claims period expires and the creditors are paid, the remaining estate can be distributed to beneficiaries. If it takes longer, then it is usually because there is a will contest or other dispute.

So, the answer is simple (or it it), a Florida probate can be completed in just 4 months from start to finish if all goes smoothly. The problem is that things don’t always go smoothly.  A proper estate plan (wills & trusts) can help avoid future problems.

Wednesday, October 10, 2012

Fannie Mae's September Survey- Consumers & Housing looking up

Consumers eye economy, housing favorably
WASHINGTON – Oct. 9, 2012 – Results from Fannie Mae’s September 2012 National Housing Survey show Americans’ optimism about the housing market and homeownership continued its gradual climb.

The increase was bolstered by a series of mortgage rate decreases throughout the summer. Consumer attitudes about the economy also improved substantially last month, breaking the progression of waning confidence seen during much of the year.

“Home price change expectations have remained positive for 11 straight months, and the share expecting home price declines has stabilized at a survey low of only 11 percent,” says Doug Duncan, senior vice president and chief economist of Fannie Mae. “Furthermore, the Federal Reserve’s latest round of quantitative easing has caused a large drop in mortgage rate expectations. Friday’s September jobs report – including the strong upward revisions for prior months, a sizable increase in earnings, and a sharp decline in the unemployment rate – should provide further impetus for improving consumer confidence in the housing market.”

With regard to the overall economy, 41 percent of consumers now believe the economy is on the right track, up from 33 percent last month; and 53 percent believe the economy is on the wrong track, compared with 60 percent the prior month. Both the right track and wrong track figures mark their highest and the lowest readings, respectively, since the survey began in June 2010.

Survey highlights

Homeownership and renting
• Consumers’ average home price change expectation is 1.5 percent, consistent with recent periods and marking nearly a full year in which home price expectations have been positive.
• Thirty-seven percent expect home prices to go up in the next year, the highest level since the survey’s inception in June 2010.
• Thirty-three percent of respondents say mortgage rates will go up in the next year, a decrease of 7 percentage points since last month.
• Nineteen percent of respondents say it is a good time to sell, the highest level since the survey’s inception.
• Those who say now is a good time to buy dipped slightly to 72 percent.
• The percentage of respondents who say they would buy if they were going to move increased to 69 percent, tying June 2012 at the highest level since the survey’s inception.

The economy and household finances
• Consumer optimism climbed in September, with 41 percent saying the economy is on the right track – the highest level recorded since the survey began, and an 8 percentage point increase over last month.
• Forty-four percent of respondents expect their personal financial situation to improve over the next year, up from 42 percent in August.
• The share of respondents who say their household income is significantly higher than 12 months ago decreased 3 percentage points to 17 percent.
• Thirty-four percent say their household expenses are significantly higher than they were 12 months ago, a 2-percentage point increase over August.

Article can be found at Fannie Mae

Wednesday, October 3, 2012

Measure of US home prices rises by most in 6 years

WASHINGTON (AP) — A measure of U.S. home prices jumped 4.6 percent in August compared with a year ago, the largest year-over-year increase in more than six years.

CoreLogic, a private real estate data provider, also said Tuesday that prices rose 0.3 percent in August from July, the sixth straight monthly gain.

Steady price increases, combined with greater home sales and rising builder confidence, suggest the housing recovery may be sustainable.

Other measures of home prices have also increased. The Standard & Poor's/Case Shiller index rose in July compared with a year ago, the second straight yearly increase after two years of declines. And an index compiled by a federal housing regulator has also reported annual increases.

Housing prices are rising in most areas, according to CoreLogic. Only 20 large cities out of 100 tracked showed declines in the 12 months ending in August. That compared with 26 in July.

"The housing market's gains are increasingly geographically diverse with only six states continuing to show declining prices," said Mark Fleming, chief economist for CoreLogic.

States with the biggest price increases in the past 12 months were Arizona, Idaho, Nevada, Utah and Hawaii. Prices soared 18.2 percent in Arizona, partly because the supply of homes for sale is low and foreclosure sales have slowed. Prices have risen 10.4 percent in Idaho.

The states with the biggest declines were Rhode Island, Illinois, New Jersey, Alabama and Connecticut.
The housing market has begun to rebound this year more than five years after the bubble burst.

Sales of previously occupied homes jumped in August to the highest level since May 2010. The rate at which builders started single-family homes rose last month to the fastest in more than two years. Builders have also increased their spending on single-family home construction for five straight months. And the lowest mortgage rates on record have made home buying more attractive.

Even with the gains, the housing market has a long way back. Many would-be buyers can't qualify for stricter lending standards or save enough money for larger down payments that most banks now require. Home sales, housing starts and prices all remain below healthy levels.

CoreLogic said its measure of prices is 26.7 percent below a nationwide peak in April 2006.

Still, the broader economy will likely benefit from rising home values. When prices rise, people typically feel wealthier and spend more. And more Americans are likely to put their houses up for sale, which could further energize the market.
This article can be found at: US Home Prices on the Rise

Monday, October 1, 2012

Florida Lady Bird Deed - Enhanced Life Estate Deed

A Lady Bird deed (called an enhanced life estate deed in Florida) is a relatively new form of deed that, like a traditional life estate deed, allows property to pass automatically to one or more designated recipients at death, without the need for Florida probate.  Florida is one of only a handful of states that recognize Lady Bird deeds.

How a Lady Bird Deed Works

Lady Bird deeds are used to avoid probate.  Here’s how it works:
  • You sign a deed transferring your real estate to a person or group of people (called the remaindermen or remainder beneficiaries) at your death, but retaining the right to sell, use, and otherwise deal with the property during your lifetime.
  • If you decide to sell, mortgage, or otherwise deal with the property during your lifetime, you are able to do so without the consent of the remaindermen (this is the difference between a life estate deed and a Lady Bird deed).
  • Upon your death, your remainder beneficiaries simply file your death certificate in the land records. This serves as proof of yours death and allows the property to be transferred to the remaindermen without the need for probate.

Advantages: Lady Bird Deeds versus Traditional Life Estate Deeds

Perhaps the biggest drawback of a traditional life estate deed is the inability of the person who deeds the property to change his or her mind.  Once a traditional life estate deed is signed, the grantor cannot sell, mortgage, convey, gift, or otherwise terminate the remainder interest during his or her lifetime without the consent of the remainder beneficiaries.
The intention of a Lady Bird deed is to avoid this problem.  Like a traditional life estate deed, a Lady Bird deed  allows you to name someone to receive the property at your death while reserving the right to use the property during your lifetime. But unlike a traditional life estate deed, you are able to deal with the property during your lifetime, without the consent of the remainder beneficiaries.
Lady Bird deeds can allow you to:
  • Keep complete control of the property during your lifetime without requiring consent of the remainder beneficiaries;
  • Retain the right to use, profit from, or sell the property during your lifetime;
  • Avoid triggering the Federal gift tax on the transfer during your lifetime; and
  • Avoid probate of the property at your death.

Problems to be aware of with Lady Bird Deeds

Lady Bird deeds are easy to mess up.  Here are a few common mistakes to watch out for:
  • It is important that the document be drafted by a knowledgeable attorney.  If a mistake is made, the Lady Bird deed will not satisfy the Florida title insurance companies and will still require probate.  The deed needs to be drafted so as not to allow the property to end up back in your estate through lapse (prior death of a named remainderman) or otherwise.
  • Lady Bird deeds require special consideration if the property is subject to a mortgage.  The cost of Florida’s mortgage taxes should be taken into account when considering whether the Lady Bird deed is the most cost-effective alternative.
  • Lady Bird deeds must still meet the formalities required under Florida law for a deed to be valid.  Otherwise, the deed will not achieve your goals of transferring the property without probate.
  • Florida’s complicated homestead laws should be considered when dealing with Lady Bird deeds.

A little bit of history on the Lady Bird Deed

A Lady Bird Deed is named after Lady Bird Johnson.  History tells us that President Johnson reportedly transferred property to his wife by utilizing such a deed.