Bankruptcy, Foreclosure and Short Sale Seminar

for Real Estate Professionals!

AND… Helpful Tips for the Changes in the Law Affecting the HUD and

Closing Documents!

CONSUMER BANKRUPTCY

• Knowing about Bankruptcies helps you to know if your client can sell a house and, if so, when.

• Chapter 7• Chapter 13

CHAPTER 7• Means Test• Fresh Start• Liquidates Debts• But, you can Reaffirm Debts• No Guarantee of a Permanent Stay without Equity in the

Home.• Limited Exemptions for Assets

MEANS TEST• Means test is a determination of whether an individual or

family is eligible for government assistance, based upon whether the individual or family possesses the means to do without that help.

• Look at Income• Look at Number of Dependents• Look at Expenses

FRESH START• In a Chapter 7, you can wipe out most unsecured debts,

EXCEPT:• School Loan• Taxes• Personal Injury Cases Arising From DUI• Fraudulent Debts• Alimony• Child Support

REAFFIRMING A DEBT• Cars• Houses• Form provided by the Creditor.• Completed by the Debtor.

STAY FORECLOSURE/LITIGATION

• Stay = Automatic• UNTIL… Bank Files a Motion for Relief from Stay.

• Motion- GRANTED, if no equity and Bank complies with the Local Rules.

• However, the Court may grant additional time.

CHAPTER 13• Feasibility• Payment Plan• Keep Your Assets• Strip Off Second Mortgages• Cannot Sell Assets Without Court Permission

FEASIBILITY• For Ch. 13, your MUST have the Income to Pay the

Payment Plan.

PAYMENT PLAN• Repay Secured Debts• Pay Priority Unsecured Debts• Pay a % or Unsecured Debts• Complicated Process- Takes Months for Approval

KEEP YOUR ASSETS• In Ch. 13, you can keep your assets while you

make you payment plans.• But, you have to fully disclose all assets,

including inheritance and personal injury settlements even if you have not received them, yet.

STRIP SECOND MORTGAGE/ELOC

• If you have more than 1 Mortgage, you MAY be able to strip off the second mortgage or ELOC.

• But, ONLY if the house is worth LESS than what the FIRST Mortgage is valued at.

• Values are based on appraisals.

YOU CANNOT SELL ASSETS WITHOUT COURT PERMISSION• When you enter Bankruptcy, all of your Assets become a

part of the Bankruptcy Estate.• You CANNOT transfer/sell any assets WITHOUT Court

Permission.• Court Permission can be obtained via Motion.

UNLAWFUL PRACTICE OF LAW

• DON’T GIVE LEGAL ADVICE!• You want to help your potential client, but protect yourself

always.• Get it in writing.• Don’t help with filing Bankruptcies!• Don’t help with filing Motions!• Don’t go to Court!

DON’T ABUSE THE SYSTEM!• If you do you run the risk of being denied your Bankruptcy Discharge.• Or, WORSE, criminal charges of perjury and/or Bankruptcy Fraud.

FORECLOSURE

FORECLOSURE JUDGES• MIAMI-DADE

• Division Judge handles all issues, except Motion to Cancel Sale and Motion for Summary Judgment.

• BROWARD• 3 Judges:

• Judge Lynn Rosenthal: Older than 2011• Judge Joel Lazarus: 2011 and Younger• Judge Stone: Trials

THE PROCESS• Valid Service• Motion to Dismiss/Answer• Discovery• Motion for Summary Judgment/Trial• CT/Writ of Possession

PROPER/LEGAL EXECUTION OF THE PROCESS = MORE

TIME

SHORT SALES

YOU NEED TIME• Every bank is different.• 4 Months to Work with is Preferred• List for 2 Weeks first• Then take Offer to Bank with:

• With Proof of Buyer’s Ability to Pay• Fair Mark Value • Pull Final Judgment Amount• Photos and provable evidence as to why offer lower the Final Judgment should be

accepted. I.e. roof damage.

UNLAWFUL PRACTICE OF LAW

• DON’T GIVE LEGAL ADVICE!• You want to help your potential client, but protect yourself

always.• Get it in writing.• Don’t help with filing Motions!• Don’t go to Court!

WHEN YOUR CLIENT MAY QUALIFY AGAIN FOR A MORTGAGE• After Foreclosure• After Short Sale• After Bankruptcy• Other Options

CFPB CHANGES• http://www.consumerfinance.gov/• Making the mortgage process easier• The Know Before You Owe mortgage disclosure rule

replaces four disclosure forms with two new ones, the Loan Estimate and the Closing Disclosure. The new forms are easier to understand and easier to use. The rule also requires that you get three business days to review your Closing Disclosure and ask questions before you close on a mortgage.

LAW OFFICE OF PEGGY URBANEJA7401 Wiles Road, Suite 208; Coral Springs, FL 33067

(954) 840.0421; www.urbanejalaw.com

AREAS OF PRACTICETitle/ClosingsBankruptcyForeclosureFamily Law

Personal Injury