Real Estate Lawyer Nassau County
Bill and Vicki Tate were struggling. After years of working and faithfully paying their mortgage payments, Vicki became ill and left her job. The medical bills and loss of income forced Bill and Vicki to refinance their mortgage.
The bank refused to refinance. The fair market value of their home had fallen and it no longer amounted to the outstanding value of their existing mortgage. The Tates had an “upside down property.”
Bill was at a total loss. He was tempted to walk away from the home they had lived in for years and allow the bank to foreclose. That would, however, leave him and Vicki broke, homeless, with ruined credit, and still facing mounting medical bills. Bill researched options, but there were so many different opinions that his mind ended up more muddled than before. At one point, he even considered an accidental-looking suicide so Vicki could use the insurance money to pay off the mortgage and her medical expenses.
That was the moment Bill realized he needed the help of a professional. He needed someone versed in real estate law to define his choices and put a plan of action in place.
Many people find themselves living in upside down houses when the real estate market falls from:
• Poor financial management.
• Overall decrease in market values.
• Poor initial mortgage negotiating.
• Mortgage fraud.
• Sub-prime mortgages.
• Financial hardship.
When in this situation, it is almost never a good idea to fix things alone. Every case is unique, and the solutions for one family may not be an option for another family. If the solution involves:
• Mortgage fraud.
• Strategic default.
You need the advice of an experienced real estate attorney familiar with the laws in your state. Each state’s laws and options vary. Trying to navigate the system on your own can lead to greater hardship.
Real Estate Lawyer Nassau County analyzes your individual case and advises you on options. Options include:
1. Keep things the same. Sometimes your house is upside down, but you have no problem paying the mortgage and no wish to try and sell your home. In this case, there is no need to change anything. The market value of your home means nothing if the home has personal value to you and your family, and you can afford the mortgage as it is.
2. Refinancing. This option is available when bank fraud is present. In this case, your lawyer puts you in touch with an agency that may be able to work with you. If you can prove a financial hardship beyond a doubt, this may also be an option.
3. Short sales. Sometimes you can convince the bank to let you sell your home at the market price and forgive the difference between the mortgage and market price. Some states allow the bank to accept the short sale and then sue you for the balance of the mortgage. In this case, a lawyer helps you negotiate with the bank before the short sale to add a clause to the contract stating they will not pursue legal action. If legal action is taken, your attorney represents you to get the matter cleared quickly and without more financial hardship. When a bank forgives any part of a loan, the IRS declares the forgiven amount taxable income.
4. Deed-in-lieu. This option can result in a personal lawsuit from the bank to get the remaining money owed. With a deed-in-lieu, you sign the deed for your home over to the bank, and they agree to accept the deed as payment for the mortgage. During the transaction, the bank issues an estoppel affidavit, putting in writing the terms of the transaction. A lawyer makes sure there is a clause that states the bank will not seek further legal action and ensures the agreement meets general business standards and protects your interests.
5. Strategic default and bankruptcy. These are last resort options. With a strategic default, you allow the bank to foreclose. Bankruptcy might not eliminate the mortgage completely, but can give you longer to pay and reduce the amount owed. In both cases, you compromise your credit, adversely affecting future financial deals. if you decide to rent after a strategic default or bankruptcy, some landlords won’t rent to you with a bad credit rating.
Bill and Vicki found a real estate attorney willing to work with them and the bank to try to ease the stress the couple was going through. Considering Vicki’s health problems and loss of employment, the couple qualified as a financial hardship case. Neither cared much about the actual value of their home, and a move now would only create more stress.
Together, the attorney and the couple agreed that renegotiating the mortgage would benefit all parties. It took some work, but their bank was a member of a government program that helped in this matter. At last, with a mortgage payment that was easier to manage and a part-time second job, the Tates will manage to tread water until Vicki’s health enables her to return to work.
What To Do Next:
Just As Every Property Is Unique, Every Property Transaction Is Unique – And Not Every Lawyer Has Experience Handling Them.
Using the legal process strategically is much more than just handling filings, it’s understanding how the transaction fits into long term plans for the assets and the businesses that hold them.
Thomas Weiss & Associates, P.C. provides a Real Estate Strategy Session before every representation to ensure every client understands how the legal process can make a big difference in their ultimate financial outcome.
If I’m not the right attorney for your transaction, you have my commitment that I’ll point you in the right direction. Just call my office at (516) 746-7452 to schedule.