• Should I consolidate high interest debts into a lower interest rate second mortgage if I am having financial problems?

• What are my options if I have been served with a foreclosure?

• What is the difference between a repayment plan and a loan modification?

• A foreclosure has been filed. Can I short sale my property?

• How can my condo/HOA charge all of these fees when my assessment was only a small amount?

 

 

Should I consolidate high interest debts into a lower interest rate second mortgage if I am having financial problems?

​

​You should consult an attorney before entering into a consolidation loan. While consolidation loans usually lower the monthly payment amount in the short term, the amount of interest paid long term can be substantially more. In most cases, any equity you have in your homestead is exempt from creditors' claims. If the underlying cause for the financial problems has not been resolved, some homeowners find they are forced to file bankruptcy at a later date, only to find out they could have avoided attaching the consolidated debt to their homestead.

 

What are my options if I have been served with a foreclosure?

​

If you have any defense to the foreclosure action, or any counterclaims to bring against the mortgage company, you must file a response within 20 days of being served. Even if you do not know whether you have a defense, you should contact an attorney to make sure the mortgage company has done everything required of them to enforce the loan. An uncontested foreclosure takes approximately 3-4 months to complete. This time period may be significantly lengthened during a contested foreclosure, depending on the nature of the defenses and/or counterclaims. There are a number of ways to prevent foreclosure prior to the foreclosure sale, including negotiating a repayment plan or loan modification, or filing for bankruptcy.

​

What is the difference between a repayment plan and a loan modification?

​

A repayment plan usually allows a borrower to catch up delinquent mortgage payments by making the regular payment plus an additional amount each month to go towards catching up the delinquent payments. The regular monthly payment amount, the interest rate and the length of the loan are usually not adjusted, and the mortgage company may or may not continue with legal action during a repayment plan.

​

A loan modification usually includes an adjustment to the regular monthly payment amount, by either modifying the interest rate or adjusting the length of the loan, or both. Most loan modifications will add the amount owed for delinquent payments to the balance of the loan, to be repaid over the life of the loan, so there is no “catch up” payment to make in addition to the regular monthly mortgage payment.

 

A foreclosure has been filed. Can I short sale my property?

​

​Depending on the status of the foreclosure, you may be able to proceed with a short sale. The short sale process is generally as follows:

​

• List the property for sale with an experienced Realtor who is familiar with short sales

• Once under contract, provide the contract and necessary short sale documents to your attorney for the short sale package to be assembled & sent to the lender

• Upon the lender receiving the package, they may request more information or schedule an appraisal/BPO of the property. It can take 2-4 months to receive a final answer from the lender.

• If the lender approves the short sale transaction, you then proceed with the normal steps needed in order to sell the property.

​

Because the process can take several months, it is important to hire an experienced attorney who can represent you in the foreclosure to ensure you have enough time to complete the short sale.

​

How can my condo/HOA charge all of these fees when my assessment was only a small amount?

​

Under Florida Statute 720.3085, assessments and installments on assessments that are not paid when due bear interest from the due date until paid at the rate provided in the declaration of covenants or the bylaws of the association. If no rate is stated, interest accrues at the rate of 18% per year. An association may also be able to charge an administrative late fee of either $25 or 5% of the installment amount.

​

If you make a payment to the association which is past due, the statute also states how the payments shall be applied: first to interest accrued, then to administrative late fee, then to costs & reasonable attorney fees and then to the delinquent assessment. So if your account has been charged with interest, late fees, costs & attorney's fees, all of those items must be paid before you can pay down the initial assessment amount.