Across the country, there’s lots of positive feedback about Fannie Mae’s “HomePath for Short Sales” where any Fannie Mae-owned home loan can be escalated by the realtor – and once this happens, Fannie Mae people enter the transaction to work directly with the mortgage servicer as well as the realtor to get things resolved and the short sale closed. Fannie Mae tells Realtors that it is looking to help escalate these short sales where:
- You are ready to list a property and need a recommended list price.
- You want to contest a value Fannie Mae has assigned to a listed property.
- You haven’t heard back from the servicer.
- You have an issue with an offer currently under negotiation.
This is what Fannie Mae wants to have happen: to get short sales done and avoid these properties going into foreclosure. Which sounds good for sellers, and buyers, and home owner, and banks: well, just about everyone, right? Maybe not.
Larry Tolchinsky’s Tip: There are many things that can complicate a short sale in Florida and elsewhere. Many Florida short sales are distressed properties where home owners have been facing financial difficulties, and the property may be facing some complications in any sale. Among them:
- different real estate appraisals that are far from close in valuing the property;
- second liens on the property that have to be resolved; and
- things like unpaid property taxes or insurance that’s got to be paid at closing.
Florida short sale lawyers often spend lots of time negotiating on the actual sale of the property with the lender, getting the mortgage servicer’s or bank’s approval of the deal and negotiating the deficiency to avoid a surprise deficiency lawsuit against the seller in the future. However, that’s far from all that’s on the table in many Florida short sales.
Appraisal fights will have to be waged in some cases. Force place insurance premiums, too. However, one of the biggest issues on the table is dealing with liens. All kinds of liens can be on file in the real estate records, clouding title on the home. These have to be resolved and the official releases need to be filed properly in the local real estate records before clear title can pass to the buyer. These include:
- IRS federal income tax liens;
- HOA Fee liens;
- city and county liens; and
- Local unpaid property tax liens.
Savvy short sale sellers don’t rely just on Realtors to get these negotiations finalized: many lenders aren’t too willing to ante up any cash to pay these kinds of liens off in order to get the short sale done — even if they’ll have to face these clouds on title in the event of a foreclosure. Florida real estate lawyers can be very helpful in orchestrating lien resolutions in these cases.
However, Florida short sale home owners need to be aware of a new player who is involved in getting these liens off the closing table that banks and lenders will be happy to welcome at the closing table: the Tax Lien Investor. In today’s economy, creative investment schemes are popping up all over the place, and a new one that is gaining in popularity is the investor who sees a profit to be made in buying tax liens from the taxing authority. The taxing authority gets to move that receivable off its books, and the investor looks to make a better percentage on his investment than he can get in lots of other investment vehicles.
Florida allows for tax liens to be sold. Florida’s booming popularity was spotlighted in Forbes, where tax lien investors can bid on tax liens being sold by places like Palm Beach County online: they don’t even have to visit Florida to buy up the tax lien on your house.
Which means that when a Florida Short Sale gets to the closing table, there may be another hurdle to jump: satisfying that Investor, wherever they may be, before the deal can close.
Do you have questions or comments? Then please feel free to Chat with Larry in the comments below, at email@example.com, or (954) 458-8655. If you have a specific or personal situation, please call or email Larry because he can’t answer specific fact questions in general comments.
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