Archive for: ‘May 2015’

5 Steps for Conquering Debt and Getting Your Mortgage Approved

May 21, 2015 Posted by kingcade

Today, first-time buyers are exposed to countless “free credit score” offers online which have allowed them to be knowledgeable about their credit histories and take steps to improve their scores by the time they are ready to buy a home. However, improving credit and tackling debt are two very different things. For many buyers, especially young adults with student loan debt, high debt levels can stop them from getting financed. Mounting debt may be more harmful than lower credits scores are helpful.

Lenders depend upon three major factors in order to approve a loan application: DTI, which is the ratio of debt to income; credit as measured by FICO scores; and the loan-to-value ratio, which is discovered once a home is appraised.  The credit score and loan-to-value ratio may cause the Lender to increase interest rates or limit the amount they will lend out, contingent on the appraisal.

Existing debt is important because it tells the lender about the applicant’s ability to pay back a loan. If an applicant’s DTI is too high, it greatly impacts their chances of getting financed, even if the borrower has a good credit score or job with excellent earning potential. The qualified mortgage (QM) rule regulates the cutoff for a DTI, only allowing up to 43%. This means that applicants’ monthly debt payments must be less than 43% of their monthly gross income. FHA has their own version of this rule, allowing for 41%.

Reducing your debt is the fastest and easiest solution for lowering your DTI. Below are five ways to reduce debt:

1. Become debt-aware.

Monitoring your finances and keeping track of your debt on a daily basis will help you to become more debt-aware. Utilize your bank’s online banking, money management or virtual wallet programs to help you better track your spending. By pacing yourself and staying committed, you can gain peace of mind in remaining debt-aware.

2. Pay off smaller balances.

Smaller balanced add up and can increase your monthly debt amount. By tackling these smaller amounts in one payment, you will significantly reduce your monthly payment obligations. Instead of paying the monthly minimum, pay off small balances first, then work on the larger debts in increments. If there is a line of credit that you don’t need, close the account or reduce the credit amount.

3. Consolidate monthly payments and reduce interest.

The more you owe the higher your interest rates will be on credit cards and installment plans. Bad payment history also makes those rates increase. First tackle your higher interest cards for consolidation. You can lower monthly payments by consolidating and refinancing debt. This includes car loans and student debt.

4. Stop buying with credit.

Commit to one week without buying anything with credit and see how much you save. Implementing a cash-only plan will help you to become more aware of everything you spend. By exercising restraint you can save a lot of money by making smarter spending decisions. On a daily basis, log your savings and place that amount in a savings account. This will help you pay of current debt without racking up more debt.

5. Begin with FHA.

FHA finances for applications that have lower credit scores and higher DTIs. If your DTI is over 30%, you have a better chance with FHA, than with a conventional loan. You may have a down payment, but the recent reduction in annual mortgage insurance premiums makes FHA more appealing to borrowers.

If you are in a financial crisis and are considering filing bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.

Source: https://www.inman.com/2015/05/18/5-steps-to-beating-debt-and-getting-mortgage-approved/

Some Homeowners Keep Their Homes, 5 Years after Foreclosure

May 20, 2015 Posted by kingcade

Since Florida’s courts were bombarded with foreclosure cases over five years ago, some homeowners who were sued have managed to remain in their homes without paying mortgages because of a law called the statute of limitations.

Certain Florida courts have declared that lenders will not be able to bring forth foreclosures, according to a set criterion. If the lender has already filed for foreclosure on a home, demanded payment of monies borrowed, lost the case, then failed to file another action within five years of the original suit, they will no longer be able to foreclose or evict the homeowner from their residence.  However, other courts throughout the state disagree with this.

On October 6, the Florida Supreme Court will hear oral arguments regarding this matter and may issue an order to finally resolve this conflict. The outcomes are expected to vary per foreclosure case but homeowners are cautioned that in most cases, if they do not pay, they will not keep their homes. According to NBC 6 Investigators, many people are living in their homes without paying mortgage and it looks like they might be able to continue doing this.

One Dadeland man was only 19 years old when he received a loan of nearly $190,000 for an apartment in 2007. Shortly after the purchase, he was in a serious accident and was unable to use his leg for eight months. By then, the computer technician position he’d had was gone. Unable to make payments, his lender filed for foreclosure.

In February 2011, the case was thrown out when the attorney for the man’s lender, Chase Home Finance, failed to appear. Nearly two years later, the resident received a new foreclosure lawsuit notice. After seeking an attorney, the case was finally dismissed this past October, due to the statute of limitations law.

“We learned that there’s an actual statute of limitations on this kind of thing, five years from the initial filing,” the Dadeland homeowner said. He also said that he felt as though he did nothing wrong in this case. “It seems kind of un-American, honestly, if they can keep coming at me for something they’ve already lost on twice.”

A Miami woman bought a home near Coconut Grove in 2001. Shortly after the 2008 recession, she also had trouble making her mortgage payments. “There was a lot of back and forth with the bank,” the woman explained. In 2009 a foreclosure action was filed against her by her lender, Nationstar Mortgage. She stopped making payments, saving funds while she tried for a modification.

After a botched contract and miscommunications with the lender, the Miami woman sought legal help. The case was finally dismissed last June when Nationstar failed to appear before the judge. Since then, the lender has requested to reinstate the foreclosure, before the five year mark. She is appealing this action and if she is successful, she too might be living in her home without mortgage payments and fear of foreclosure.

While some homeowners prevail with the Supreme Court, it is still likely that they will need to face outstanding liens and claims by the banks. Some recommend that homeowners should not stop making payments, solely based on the hopes that the statute of limitations will expire. Now that the number of foreclosure cases has fallen to a manageable amount, it is likely that the banks that truly have a right to the property will be prepared for court and present adequate evidence to prove their cases.

Choosing the right attorney can make the difference between whether or not you can keep your home. A well-qualified Miami foreclosure defense attorney will not only help you keep your home, but they will be able to negotiate a loan that has payments you can afford. Miami foreclosure defense attorney Timothy Kingcade has helped many facing foreclosure alleviate their stress by letting them stay in their homes for at least another year, allowing them to re-organize their lives. If you have any questions on the topic of foreclosure please feel free to contact me at (305) 285-9100. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.

Source:  http://www.nbcmiami.com/news/local/Five-Years-After-Foreclosure-Some-Keep-Homes-303817841.html

Florida’s Foreclosure Courts’ Funds are Being Cut Off

May 19, 2015 Posted by kingcade

Over the past two years, Florida’s foreclosure courts have been receiving extra funds in order to expedite cases, but this assistance is about to come to a stop.

To add judicial manpower to the bench, over $21 million was budgeted in 2013. This is set to expire as of June 31 this year.

Homeowners will get the benefit of having a single judge dedicated to their case instead of multiple judges. Lawyers anticipate varying levels of confusion as cases are transferred to different divisions.

Palm Beach County Chief Judge Jeffrey Colbath said, “The legislature gave us enough money to get to the five-yard line, but it would have been nice to get across the goal line.”

Florida has gained control of their foreclosure system’s backlog, which was once flooded. Since 2013, Florida has seen a 66% statewide reduction in foreclosures with just 109,706 pending foreclosures statewide in January.

Curiosity as to how it was done depends upon who you ask. Some believe that judges rushed through many cases with minimal consideration of their merits. Many judges differ, saying that getting the case right was more important than how quickly the case was closed.

At this time Florida foreclosure cases are yet to return to how they were before the recession, but it is a work in progress.

Choosing the right attorney can make the difference between whether or not you can keep your home. A well-qualified Miami foreclosure defense attorney will not only help you keep your home, but they will be able to negotiate a loan that has payments you can afford. Miami foreclosure defense attorney Timothy Kingcade has helped many facing foreclosure alleviate their stress by letting them stay in their homes for at least another year, allowing them to re-organize their lives. If you have any questions on the topic of foreclosure please feel free to contact me at (305) 285-9100. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.

Source: http://postnow.blog.palmbeachpost.com/2015/05/18/cash-flow-to-floridas-foreclosure-courts-is-being-cut-off/

Seniors Can Protect Assets through Bankruptcy

May 18, 2015 Posted by kingcade

For some Senior Citizens, bankruptcy may provide greatly needed debt relief after growing medical expenses or years of supporting their children. Bankruptcy experts say that filing for bankruptcy can be a useful tool for retirees seeking to protect their retirement assets, after negotiating with creditors. Unfortunately, fear of shame brought on by financial troubles, often deters many older Americans from seeking bankruptcy help earlier.

Deborah Thorne, an associate professor of sociology at Ohio University said, “People usually postpone bankruptcy for several years before filing. When finances head south, they should file right away.” Thorne who has studied bankruptcy and older Americans explained that retirees face a greater risk of financial ruin than younger individuals do. She proposed that the best strategy is to always protect assets.

401(k)’s, pensions, social security payments, qualified profit-sharing plans, and individual retirement accounts worth up to $1.245 million are all exempt from creditors during bankruptcy. This means that retirement income and savings are out of reach and protected under federal law. Protecting equity, which is the value of a property, minus the amount owed, is important for seniors. Using a homestead exemption, designed to protect the equity of a main residence in a bankruptcy, will usually keep retirees from losing their homes. Florida homeowners can take advantage of the fact that Florida does not have a limit on the equity that is exempt.

When work began to dwindle for one 66 year old retired Central Florida senior, he wanted to get his financial stability back. He quickly saw his debt situation growing larger while his income grew smaller. As a result, he declared Chapter 7 bankruptcy, allowing him to liquidate some of his assets in order to repay creditors.

“I wanted to leave money, not debt, to my grandchildren, and begin rebuilding my life,” the Orlando resident said. Overcoming the harsh stigma of bankruptcy was the most difficult part for the senior, but filing bankruptcy was the chance he needed to start over financially.

Certain debts such as child support, alimony, federal tax bills less than three years old and student loans are usually not discharged with a bankruptcy.

A means test can assist with deciding which type of bankruptcy best fits a particular situation. According to specialists, those with higher income fair best with Chapter 13 bankruptcy, which allows for a repayment plan. John Pottow, a professor at the University of Michigan Law School and a bankruptcy specialist said, “It lasts for a minimum of five years, and it’s a budget that’s created to pay back creditors.” For those with lower income or assets, Chapter 7 works best.

It is recommended for people to negotiate with the creditors before filing for bankruptcy. Consumers should try contacting the credit card companies and asking for reduced interest on outstanding balances. Medical debt can also be negotiated. In some cases, hospitals have even reduced balances by half.

Another strategy is so refuse to pay the outstanding debt. If a retiree has little else outside their retirement fund, the creditors will likely not collect anything, even if it went to court, which can be called “judgment-proof.” Credit scores will be affected by filing for bankruptcy and a bankruptcy can stay on a credit report for up to 10 years, but credit can be restored. Those who declare bankruptcy are required to take credit and debtor counseling classes, which will help with rebuilding their finances.

After declaring bankruptcy, the Central Florida senior’s credit score dropped 200 points. Since then, he has begun rebuilding his credit by leasing a car. “Now it’s slowly coming back,” he said.

If you are in a financial crisis and are considering filing bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.

Source: http://www.nytimes.com/2015/05/14/business/retirementspecial/bankruptcy-can-help-seniors-protect-assets.html?_r=0

Lowest Levels since 2007 for 1st Quarter 2015 Foreclosures and Mortgage Delinquencies

May 15, 2015 Posted by kingcade

In the first quarter of 2015, the percentage of delinquencies and loans in foreclosures has dropped to their lowest since the last quarter of 2007. According to the National Delinquency Survey of the Mortgage Bankers Association (MBA), housing loan delinquency rates were at 5.54% on a seasonally adjusted basis for residential houses. Also, 2.22% of mortgage loans were in foreclosure.

Joel Kan, Associate Vice-President of Industry Surveys and Forecasting for the MBA, stated, “The foreclosure inventory rate has decreased in the last twelve quarters, and now is at the lowest level since the fourth quarter of 2007. With a declining 90+ day delinquency rate and the improving credit quality of new loans, we expect that the foreclosure inventory rate will continue to decline in coming quarters.”

The survey also revealed that legacy loans accounted for the highest percentage of problem mortgages. Reviewing the  total number of problem loans, 73% of mortgage loans originated in 2007 or earlier. According to Mortgage Bankers Association’s records, applications for mortgage loans also dropped by 4.6% in the last week of April, 2015.

As of March 2015, foreclosure activity has spiked. Realty Trac’s records show that the total number of foreclosures rose above 120,000 in March 2015, following a decrease in January and February. March’s average foreclosure rate in the United States was one foreclosure out of every 1,082 houses. Florida held the highest amount of foreclosure activity with one foreclosure out of every 446 houses.

Choosing the right attorney can make the difference between whether or not you can keep your home. A well-qualified Miami foreclosure defense attorney will not only help you keep your home, but they will be able to negotiate a loan that has payments you can afford. Miami foreclosure defense attorney Timothy Kingcade has helped many facing foreclosure alleviate their stress by letting them stay in their homes for at least another year, allowing them to re-organize their lives. If you have any questions on the topic of foreclosure please feel free to contact me at (305) 285-9100. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.

Source: http://usfinancepost.com/foreclosures-and-mortgage-delinquencies-fall-to-the-lowest-levels-since-2007-in-first-quarter-of-2015-25063.html