The Feds recently adopted guidelines which will apply to Fannie Mae and Freddie Mac backed loans which are possible foreclosures. These changes may take effect as soon as the end of 2011.
The new guidelines will include the following:
Servicers may not apply the “dual track” tactic; that is to say a servicer may not both work with a borrower to avoid foreclosure while at the same time proceeding with a foreclosure.
Loan servicers must contact a borrower as soon as they enter the delinquent status with their loan and as long as both parties are showing “good faith” to resolve the issue a foreclosure may not be started.
Servicers must “formally” review each case before starting a foreclosure.
There will be rewards for fast loan modifications; the lender / servicer will receive $1600 for a loan modified in under four months, those that take longer will have reduced rewards.
If a foreclosure is already in process and the servicer works out a modification the servicer may still be eligible for a reward.
The entire modification process is being simplified with less forms and less red tape.
If you are a borrower / home owner and you are having trouble with your loan payments be sure to contact your lender, be proactive; you may be able to modify instead of allowing your home to go to a foreclosure sale.
The Miami Herald recently published a story regarding the lawsuit filed by Bank of America against Everglades on the Bay. This story was extremely informative to us; as a brokerage specializing in luxury rentals we are constantly seeking great deals for tenants while trying to ensure a safe and secure community for the tenants.
Apparently Bank of America filed suit against the developers of Everglades on the Bay; this motion entailed the banks effort to seek dismissal of the communities chapter 11 case. The bank was claiming that the developers rental program would diminish the value of the property which is the collateral for the loan; therefore, endangering the banks position. There were also some accusations regarding the developer’s sub-standard practices in screening the tenants; thereby allowing persons with criminal backgrounds to enter the community. This second accusation (screening practices) was apparently found to be unsubstantiated. The judge also found that the property was not losing value due to the rental the program.
In a nut shell the developer was rewarded the case and will (at least for now) be able to continue it’s chapter 11 bankruptcy which will allow for re-organization and actually pay back a good portion of the debt it has incurred. The developer may also continue to rent unsold units. In addition, the bank may have opened themselves up to some liability; the developer may now seek to recover funds “for any extraordinary damage caused.”
Everglades on the Bay is a 49 story, two building luxury condo community located on northeast second street and Biscayne Blvd. This community is very attractive and with 849 condo units of which only a fraction have sold you can only assume that the develper will be offering attractive incentives to buyers as well as tenants. If you are in the market for a primary home (buying or renting) or perhaps a nice investment property be sure to consider this property as one to place on your roster to view.