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Real estate Q&A: Foreclosure deal could trickle down

QUESTION: I know some of the major lenders signed a $25 billion mortgage settlement earlier this year. What happens to the rest of the homeowners whose lenders aren’t part of the agreement? Are we left out? /pp -Motti/pp ANSWER: Yes and no. The agreement that you’re hearing about was signed in February by Bank of America, Chase, Wells Fargo, Citigroup and GMAC’s Ally Financial to settle claims of improper foreclosures during the housing crisis. If your loan is not with one of those banks, you will not be eligible for specific terms of the settlement, which include cash and mortgage balance forgiveness./pp Take heart, though. The news is not all bad for borrowers of other banks. I have seen some of those lenders offering borrowers deals that are similar to those contained in the agreement. For instance, even though your lender isn’t part of the settlement, you may find that it is more willing now to offer you some type of a loan modification – maybe even a mortgage principal reduction. Essentially, the settlement has prompted many other banks to improve their dealings with struggling homeowners./pp I have long said that you have to be persistent and stay in the game to get the results you want. I’m really seeing this advice pay off. Some clients have told me how glad they are that they didn’t give up because they got great deals. If you have not yet received the relief you want, now is definitely the time to try again./pp /pp Q: My home has gone into foreclosure. How will I know if the lender wants to get money from me after it sells it? How can I protect myself?/pp -Henry/pp A: If the value of your home at the foreclosure auction is not enough to pay off your mortgage loan, you will have a deficiency liability. Your lender can have another hearing with the court to determine the exact amount of this liability and have the court issue a judgment that it can use to try to collect this money from you. One of the best ways to avoid this scenario is to try to negotiate with your lender during the foreclosure process to waive the deficiency – through a short sale, a deed in lieu of foreclosure or a consent judgment. Also, certain types of assets are exempt from collection, like most retirement accounts, head of household wages and your homestead property./pp /pp /pp Q: My wife and I have been married for 16 years. Our house has been in her name for more than 20 years. Her health is poor, and I’m wondering if there may be any legal issues I might face if things take a turn for the worse. /pp -Sam/pp A: If your wife passes with the homestead property in just her name, Florida law will determine what happens to the property. If there is a will and no minor children, your wife can leave the house to you in the will. If there is a minor child and a will, or if there is no will and she has a child of any age, you will get the house as long as you live (that’s known as a life estate) and then the property will go to the kids. /pp Whatever the situation, you can avoid all of this and any expenses by having her deed the property to both of you, as husband and wife. This type of ownership is known as tenants by the entireties. Upon her death, the property will instantly transfer to you. The only downside to this type of transfer is that it will be subject to transfer taxes, unless the property is owned outright without a mortgage./pp ABOUT THE WRITER:/pp Gary M. Singer is a Florida attorney and board-certified as an expert in real estate law by the Florida Bar. He is the chairperson of the Real Estate Section of the Broward County Bar Association and is an adjunct professor for the Nova Southeastern University Paralegal Studies program. Send him questions online at or follow him on Twitter @GarySingerLaw./pp The information and materials in this column are provided for general informational purposes only and are not intended to be legal advice. No attorney-client relationship is formed. Nothing in this column is intended to substitute for the advice of an attorney, especially an attorney licensed in your jurisdiction.

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