Dedicated Real Estate Attorneys Helping Florida Clients Throughout Palm Beach County and Port St. Lucie County
Florida’s real estate laws are wildly complex, which makes speaking with an experienced real estate lawyer crucial when seeking the outcome to which you’re entitled. If you or someone you love is currently struggling with an issue involving a title and/or lease agreement, short sale, foreclosure, distressed property sale and/or FIRPTA, contact the attorneys at Thompson & Thomas, P.A. today.
Under Florida state law, a short sale occurs whenever a house is sold for less than what is owed on the mortgage — i.e. the funds needed to pay off the lender are “short.” Floridians pursuing a short sale are required to get their lender’s permission before their lien can be released, regardless of their being short the funds necessary to pay off the lender in full.
In order to proceed with a short sale, you must demonstrate that you are experiencing an undue hardship directly related to the current terms of your mortgage. More often than not, your lender will want to see that you do not possess the means to continue making loan payments as agreed upon when you first borrowed the money. Because of this, your lender will want to see that there is a sound reason for your selling the property. Your lender will likely request proof demonstrating that you are no longer able to continue making payments. Tax returns, bank statements and/or recent pay stubs may be requested.
Your Next Move
it is imperative that you speak with an experienced real estate attorney before pursuing a short sale. Once your house is sold and the lender has received your hard earned money, your lender has the right to continue seeking a deficiency judgement. Deficiency judgments provide Florida mortgage providers with extremely large amounts of money, and there is little to suggest they will forego any and all efforts to collect outstanding debts.
Mediation & Loan Modifications in Cases Involving Foreclosure
In Florida, foreclosure mediation is a process employed to help homeowners avoid foreclosure by coming up with an alternate solution benefiting both the lender and the property owner. Mediation provides a forum for the involved parties to discuss the homeowner’s current financial situation and to figure out a way for the homeowner to maintain his or her home, or to turn over the property without proceeding with foreclosure. Mediation has the potential to lead to a repayment agreement, forbearance agreement, short sale and/or loan modification.
The Foreign Investment in U.S. Real Property Tax Act (FIRPTA) was enacted to make sure that foreign investors are taxed on any and all financial gains enjoyed from owning U.S. property investments. Because of FIRPTA, a buyer purchasing property in the United States from a foreign national must withhold 10% of the amount received from the sale. It is important to remember that FIRPTA rules apply both to residential and commercial real estate sales and purchases.
If the seller is a foreign national and the amount requited is not withheld, the buyer will be held liable for the tax incurred as well as all applicable penalties. The Internal Revenue Service defines a foreign national as a nonresident alien — i.e. an individual from another country who does not, in fact, reside in the United States.
Exceptions to FIRPTA
Buyers may not be required to withhold 10% of the property sale if the property is acquired by the buyer for the purpose of allowing his or her family members to use it as a residence, and/or if the sale of the property does not exceed $300,000. A buyer may also seek a FIRPTA exception if he or she is given a withholding certificate from the seller reducing the FIRPTA tax obligation, or if the amount of interest the seller receives in the transaction is zero.
Additionally, the amount a buyer is required to withhold may be adjusted in accordance with a withholding certificate before the sale takes place. Indeed, a seller may even apply to the IRS for a withholding certificate before the tax payment is due, assuming that the 10% requirement exceed’s his or her maximum tax liability, or if the buyer and seller agree to provide security for the tax liability.
Foreclosures in the State of Florida
Under Florida state law, foreclosures fall under the jurisdiction of the judicial branch, meaning that the lender must file a lawsuit in state court. The process begins when a lender initiates the foreclosure by submitting a complaint with the court and serving notice to the borrower, along with a summons providing 20 days for the borrower to respond. In the event that the plaintiff fails to respond, the lender may receive a default judgment from the judge, in which case the plaintiff automatically loses his or her case. However, if the plaintiff files an answer within 20 days, the lender will likely either file a motion for summary judgment or elect to litigate.
Florida mortgages often contain a clause that requires the lender to send a breach letter informing the homeowner that his or her loan is now in default. The breach letter is required to specify any and all actions necessary to resolve the default, a date by which the default must be resolved and that failure to rectify the defaulted loan by the specified date may result in an accelerated foreclosure proceeding.
Motion for Summary Judgment
Many lenders file a motion for summary judgment as it typically resolves the issue more quickly and will likely end the case without going to trial. Florida judges often grant summary judgments if they find that the homeowner has no defense and would not have anything significant to testify to at trial. Unless you have a strong reason for having missed your mortgage payments, a Florida lender will often win the motion for summary judgment and the court will render a final judgment in their favor. This is why speaking with an experienced real estate attorney is paramount to your achieving a favorable outcome.
When a lender forecloses on a mortgage, the debt owed by the borrower to the lender frequently exceeds the foreclosure sale price, with the difference often referred to as a “deficiency.” More often than not, the lender may collect the balance from the borrower — assuming, of course, that they’ve been granted a deficiency judgment.
Call Thompson & Thomas, P.A. Now to Get Started
Having represented clients throughout West Palm Beach and Port St. Lucie for over 15 years, the committed attorneys at Thompson & Thomas, P.A. know how to help you and your family secure the future you deserve. Don’t delay — call now to schedule your free consultation.