Ok, this might be a little long but here goes.
I bought my first house on Christmas eve 2004. At the time I owned 3 different companies and employed 30 different people. I never made a late payment on my mortgage and let me say I was one of those people that got Sub prime mortgages in Florida. It started out at 9% and went to a whopping 13% after the first year. But I was able to get in with literally no cash out of my pocket. All of my cash was constantly tied up in my businesses. No problem my broker said re fi after the first year to get another rate. With a prepayment penalty as well.
Well business was good actually great and it was time to refi, so I decided to cash out alot of my equity and remodel the house. I bought the house for 280,000 and my appraisal came in at 520,000 so my broker helped me refi for 417,000. Still leaving equity in the house. I will say this the only reason I needed another sub prime mortgage at this point was for all the screw ups i had as a kid because at this day i am only 27 years old. Not enough time had passed from all the credit card crap i went through when i was 18.
Anyways the new BAD mortgage was 10% for the first year and after the first year the payment tripled. This was in February 2006.
I started my remodel and I will say this too the house when i left was amazing. Then disaster struck one night while i was on my way home from dinner with a client i got a DUI for a glass of wine with dinner. The Florida laws on this are ridiculous but that is another fight. I couldn’t drive for a year and that crippled my companies because i was in the car just about all day. Paying a driver was out of the question too expensive and looked strange to my clients. (i tried this) Because of my record when i was a kid i could not get a work permit. I started to fall behind on my mortgage.
I sold my companies so that my employees would not be hurt as well. I tried to sell my house and was told that due to the market crash I was basically screwed. It was now only worth like 320,000 and i owed 417,000!
I was planning to leave the country anyways and after i talked to some different real estate people I packed up and walked out. I did give a Realtor power of attorney over the sale of my house as he was going to try to short sale it. Now I am no longer in the US and not planning on going back ever. But I still have my cell phone in the states I have been calling and checking messages and they are still coming in as if the bank has not Foreclosed yet. It has been over a year since I sent in my Hardship Letter and moved out. Have they seriously not foreclosed yet? Do I need to do anything as in filing bankruptcy back in the states?
I was told not to worry unless i was planning on going back and using my credit. On top of that there is no one watching my house I told all this to the mortgage company in my hardship letter along with how angry with them i was. They refused to work anything out with me not partial payments on past due amounts nothing. Actually I had sent in 3 payments together as a lump sum when one of my companies sold and because the girl on the phone did not add in the service fees one of the payments was short 12 dollars and they never applied it and ate up the remainder in new late fees.
Is there anything i need to do or just not worry about it?
Every month or so I check the Hillsborough public records filings for a particular property in Avila, an upscale subdivision in Tampa, Florida. Avila has a mansion (pictured above) that once belonged to corporate raider Paul Bilzerian. Believe it or not, he owned that property free and clear and simultaneously filed bankruptcy, claiming he was broke. The home above was the subject of much controversy and provides an interesting definition of insolvency. Sorry, I’ll try not to get too sidetracked.
The home I periodically check on is not Mr. Bilzerian’s. It’s another fellow I know, who bought a property in Avila October 2006 for $850,000. He then had it appraised a month later for $1,380,000 and produced a buyer with a contract to purchase it from him for $1,350,000. The mortgage loan request was given to one of my loan officers, who was also his (the seller’s) brother, and he had already secured a bona fide approval for this transaction from a wholesale mortgage lender. I didn’t like the smell of any of this and since I would have been the one holding the bag for a defaulted loan, I killed the deal and haven’t seen the two brothers since.
I have heard stories though. The stories aren’t good. I don’t know what’s truth and what’s fiction, but like I said, I do check public records for that house once a month. Here’s what public records currently show:
- Lis Pendens dated January 2007.
- Summary Judgment recorded November 2007.
- There is a sale date scheduled for January 2008.
That’s a fairly standard timeline for Florida foreclosure these days. You have a right to redeem your property all the way up until the date the clerk files the certificate of sale. So, the person in my story above can theoretically redeem the house up until the January date.
Jason, Florida is judicial foreclosure. Most counties have their information online. The phone calls may be an indication of where you are in the timeline, but it’d be more accurate to check public records for the county in which the property resides.
It sounds like you still have ties to the area. Your Realtor should probably be fired. If it’s not too late in the timeline, why not find someone to buy the house for a fair price and submit the purchase contract along with the short sale package?
In the Florida market, it’s the right thing to do. Remember to talk to an accountant about filing form 982 for the insolvency exclusion for debt forgiveness.
Thanks for the questions and hope this helps.
This author is not an attorney or accountant and this information should not be considered legal or tax advice. Please consult an attorney or accountant for legal and tax advice.