The Housing Crisis of 2008 vs. The Pandemic Foreclosure Crisis

The COVID-19 pandemic seems a bit too familiar for Floridians. At a time when people are losing their jobs, either permanently or temporarily, more and more people are finding that it is becoming nearly impossible to pay their mortgages every month. Experts in the field say that in Florida specifically, they are expecting a 200 percent increase in the amount of foreclosures they saw prior to when the pandemic hit.

It is understandable why Florida residents are worried. Just as residents in the state seemed to be getting back on their feet, the pandemic dashed their hopes. However, for those worried that it is going to be a repeat of what happened over one decade ago, there is still hope. Even though foreclosures in the state will rise, this crisis is going to differ vastly from the last one.

A Look at the Numbers

When facing yet another crisis, it is easy to imagine the very worst scenario. However, a look at the numbers can bring encouragement to homeowners in Florida, and throughout the country. A study conducted by Attom Data Solutions predicts that at least 200,000 Americans will default on their mortgage in the next year. If the economic downturn hits the worst-case scenario, that number could reach as many as 500,000 homeowners. Over the next two years, the company is forecasting an increase of 70 percent in foreclosures.

Those numbers do not sound good, but when compared with the years following the Great Recession, they are not so bad. In the first six months of 2010, 1.65 million American homes fell into foreclosure. Compare that with the first six months of 2020, which included three months of the pandemic, when 165,000 homeowners were hit with foreclosure actions. Even if the number of homeowners defaulting on their mortgage skyrockets, the numbers are still likely to remain far under what was seen in the Great Recession.

So, with millions of people suffering from this economic downturn, and unemployment at an all-time high, why is there hope that the crisis due to the pandemic will be so much better than it was during the Great Recession?

A Lack of ‘Liar Loans’

In the years leading up to the housing crisis, lenders were practically giving homes away. Their main focus was to keep a continuous stream of profit coming into their institutions and the more people they loaned mortgages to, the more profit they received, even if some of those homeowners defaulted on their mortgages. As such, they did not go to great lengths to ensure that borrowers could pay back their loans and that has resulted in a number of what have been dubbed ‘liar loans.’ When the housing market crashed, people had very little incentive to pay their mortgage and keep their homes.

Many of the laws regarding borrowing and mortgages have changed today, and lenders are much more careful about who they approve for a loan. Homeowners cannot get into the type of trouble they once did simply because lenders are more careful about who they loan to. That in itself will help ensure the current crisis is not as dark as the housing crisis of 2008.

Government Response

During the Great Recession, experts say that the government response was slow. Most homeowners relied on unemployment insurance, which was very little when compared with the mortgages they had to pay, along with their other expenses. The government did create programs to help homeowners, such as HARP and HAMP, but they were not fully operational until two years after the recession was in full swing. At that time, the government also imposed strict regulations on mortgage lending, which may not have provided immediate help at the time, but will play a great role in the current crisis homeowners are facing.

In addition to that, all levels of government today have stepped in to help homeowners during this difficult time. People that lost their job were given an additional $600 a week on top of the benefits they were receiving from unemployment. Federally-backed mortgages were given generous forbearance times, and private lenders soon followed that lead, helping homeowners regardless of what type of mortgage they had taken out. Governors across the country, including right here in Florida, placed a moratorium on foreclosures and evictions so people were not kicked out of their homes at the same time they were being told that was exactly where they should remain.

Different Banking Practices

Banks have changed the way they do business since 2008, and that extends far past allowing people to take out mortgages without first ensuring borrowers could repay the loan. Today, banks seem much more willing to work with borrowers to modify loans and provide other alternatives that will help homeowners avoid foreclosure. No one wants a repeat of the housing crisis of 2008, and that includes the banks that provide the loans.

Higher Home Values

One of the biggest problems that led to the housing crisis of 2008 was that so many homes were underwater, meaning that homeowners owed more on their mortgage than what their home was worth. It has been over 10 years since that crisis, though, and during that time, home prices have been increasing, and holding steady. Bidding wars have even erupted around the country, even amid the pandemic. This is not only good news for the market, but also for homeowners that get into trouble with their mortgage. Instead of having the bank foreclose, they can sell the home and walk away without any debt, and perhaps even a little bit of profit.

Are You About to Lose Your Home? Our Florida Foreclosure Defense Lawyers Can Help

While it is true that homeowners have many reasons to be encouraged during this particular crisis, the sad fact is that some people are still going to fear losing their homes. If you are facing foreclosure, our Fort Lauderdale foreclosure defense attorneys at Loan Lawyers are here to help. We know the defenses to foreclosure, and how to negotiate with the banks to help you keep your home. Call us today at (954) 807-1361 or contact us online to schedule a free consultation with one of our skilled attorneys.

Loan Lawyers has helped over 5,000 South Florida homeowners and consumers with their debt problems, we have saved over 2,000 homes from foreclosure, eliminated more than $100,000,000 in mortgage principal and consumer debt, and have recovered over $10,000,000 on behalf of our clients due to bank, loan servicer, and debt collector violations.  Contact us for a free consultation to see how we may be able to help you.

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14 Quick Tips for Paying Off Your Student Loans

Student loan debt is at an all-time high and it is something both current and former students continue to struggle with. At times, the situation may seem hopeless. Fortunately, it is not. For those feeling as though student loans are something they are just going to have to live with for the remainder of their lives, there is hope.

Follow the 14 quick tips below and you may just be surprised at how quickly your student loans are paid off in full.

1. Use Autopay

   Using autopay is a great way to ensure your student loan payment is paid on time every month. This will not only help ensure that you do not incur additional interest charges, but it will also help if you want government assistance with your loan in the future. There are many state-run programs that help with student loans, but you will only qualify for them if you have not missed a payment.

2. Avoid Interest at All Costs

   Many students are amazed at how quickly a small student loan can balloon into a much larger debt simply due to interest. Paying off your student loans once you are out of school is a great way to avoid interest accumulating on your loans. You can also start paying your loans when you are already in school, and make monthly payments even during the grace period so that it is not added to your overall balance.

3. Pay More than the Minimum Amount Each Month

   Just like credit cards, paying more than the minimum amount due each month is a great way to pay off your student loans fast. Not only will avoid that interest that is the bane of so many students, but you will also slowly chip away at the principal, too.

4. Use Grace Periods Wisely

   It is easy to sit back during the grace period of your loan and just be happy that you do not owe anything yet. However, even if you only pay $30 a month during the grace period, this will add up to huge savings in the end, and help you get a head start on that repayment plan.

5. Use Your Payday Wisely

   Of course, the most obvious way to use your paycheck to pay off your student loan is to simply make a small payment every time you get paid. However, you can take it one step further than that. On the day you get a paycheck, put whatever is left in your bank account (from the previous paycheck) towards your loan. Even if it is a small amount, it will add up in the end.

6. Use the Snowball Effect for Multiple Loans

   Many people have more than one student loan. When this is the case, the snowball method can do a lot for your morale. The snowball method means paying off the loans with the lowest interest rate first, and then focusing on the higher-interest loans. Although you want to ensure you are still making minimum payments on all of your loans, paying off the smaller ones first can be a real boost that makes you want to keep going.

7. Use 401(k)s Wisely

   Your 401(k) may just be the big boost you need to pay off your loan. Many people are hesitant to do this due to penalties for early withdrawals and because they understand a 401(k) is an investment in their future. Still, while you are drowning in debt, they can be a lifesaver. In March of 2020, the Senate approved a package that allows people to take out up to $100,000 from their 401(k) as a hardship withdrawal without any penalties. Just make sure that immediately after withdrawing it, you start making a plan for future investments, as well.

8. Use Your Tax Refunds

   Many people think of their tax refunds as ‘found money.’ While you do not necessarily need to abandon this train of thought, use the money for something that will help you, such as paying back your student loans, rather than for something that will not give you something back in return.

9. Make a Budget

   This one should go without saying, but too many people still do not have a proper budget in place. Create a budget and most importantly, stick to it. Whatever money you have left can go towards your student loans.

10. Do Not Use a Consolidation Company

    Any company that promises to consolidate your loan–and is not part of the federal program that does it for free–is likely a scam that will only cost you money in the end. Do not fall for it and know that any company that charges a fee for their application (usually around $500,) is not legitimate.

11. Do Not Ignore Your Payments

    Even if you cannot make a payment, call your lender or loan servicer. They are much more willing to work with people that are honest about their inability to pay than those that try to run from the problem.

12. Check with Your Employer

    If you work for a non-profit or for the government, you may be eligible for the Public Service Loan Forgiveness Program. After making much lower payments for a number of years, your loan is completely forgiven.

13. Refinance the Loan

    Many people think that because they have taken out a loan, they are stuck with it. That is not the case. Refinancing the loan can give you a much lower payment, which will help you put any extra money towards the loan anyway and pay it off that much quicker.

14. Ask for Help

    If you have student loans, the chances are that your friends and family members do, too. People do not generally want to talk about their money problems, but it can be a great help to do so. When you and your loved ones put your heads together, they may give you even more tips and advice for paying them off faster, and you might be able to offer some, too.

Call a Florida Debt Defense Lawyer if You Are in Trouble

Unfortunately, the quick tips above are not always enough to keep people out of trouble when it comes to their student loans. If you are suffering from student loan debt and a lender has taken legal action against you, our Fort Lauderdale debt defense attorneys at Loan Lawyers can help. We know the defenses available in these cases and we will put our experience to work for you. Call us at (954) 807-1361 or contact us online to schedule a free consultation and to learn more about how we can help.

Loan Lawyers has helped over 5,000 South Florida homeowners and consumers with their debt problems, we have saved over 2,000 homes from foreclosure, eliminated more than $100,000,000 in mortgage principal and consumer debt, and have recovered over $10,000,000 on behalf of our clients due to bank, loan servicer, and debt collector violations.  Contact us for a free consultation and find out more about our money back guarantee on credit card debt buyer lawsuits, and how we may be able to help you.

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Tips When Choosing Your Student Loan

In the United States, there are 45 million borrowers that owe almost $1.6 trillion in student loan debt. That number represents the second-highest category of consumer debt, with only mortgages exceeding it. A recent study titled “National Financial Capability Study” conducted by the Financial Industry Regulatory Authority’s Investor Education Foundation shares some alarming information: almost 50 percent of Americans regret choosing the college they did, wishing that instead, they’d opted for a school that was more affordable.

So, if you are about to head off to school, or your semester has already started and you have realized you need financial help, how can you avoid this same regret? You may not have to choose a different school. The answer may lie in simply knowing a few tips when choosing your student loan.

Understand How Much You Need

You may know how much it will cost for tuition, textbooks, housing, and other expenses that will add up as you attend school. However, this does not necessarily reflect how much you will need in a student loan. Consider what you can use from grants, scholarships, and any financial support your family can provide. Subtract any funding you already have available and deduct it from your total costs. This is how much you will need in student loans, although you may want to apply for an amount slightly higher to cover unforeseen costs.

Submit the Free Application for Federal Student Aid

To receive federal financial aid and review your options, you must fill out the Free Application for Federal Student Aid (FAFSA). You must fill this form out depending on the deadline, which varies by state and year, so determine when that is. If you have recently graduated from high school, or you are still in your senior year, you will have to speak to your parents to obtain some information required for the FAFSA. This includes their income and other general information. The Department of Education also offers loans available to parents.

You will also need to speak to your parents if you are taking out a private loan. Most students do not have enough income or a high enough credit score to take out a loan on their own. As such, your parents will likely need to cosign for yours. Even if you do not think you need a loan right now, still speak to them about it before you go to school in case the need arises in the future.

Understand the Options Available for Loans

After you fill out the FAFSA, you will receive an award letter outlining the federal loan options that are available for you. At this point, you can determine what loans to accept, as well as the amount. The types of federal loans you may be eligible for include direct subsidized and unsubsidized loans, and Direct PLUS loans.

Subsidized loans are an attractive option for students because the federal government will cover the cost of interest while you are in school and during certain periods of deferment, if those are available. Unsubsidized loans do not offer this protection, while direct PLUS loans are only offered to parents and graduate students.

Federal loans provide many more protections and benefits than private loans, so they are always a good starting point when choosing the right loan for you. For example, if you take out a federal student loan and then later work in the public sector, you may be eligible for loan forgiveness under the Public Service Loan Forgiveness program. Federal student loans also offer a number of repayment plans, deferment or forbearance options, and usually have fixed interest rates.

Explore Options for Private Loans

While federal student loans will come with many benefits, you may also have to research the options you have for private loans. This is most often the case in the event that a federal loan will not fully cover your education costs. When doing your research, remember that private loans are often more difficult to secure and a lender will check your credit score before determining if you qualify. If you have a low credit score, or no score as many people graduating from high school do not, you may need to have someone co-sign your loan.

Research the Costs of the Loan, and the Options Available

You may think that choosing the loan that provides you with the most amount of funding is the best one, but that is not always the case. There is a lot that goes into a loan document and to ensure that you are receiving the best one for you, it is crucial that you perform research on the loans.

Regardless of whether you are using a federal or private student loan, you should research and compare:

• The terms for repayment payment
• The interest rate, and whether it is variable or fixed
• The monthly payment you will have to repay
• The options the loan includes for repayment

Once you know the interest rate and the total amount you will borrow, you should then use an online calculator to determine how much interest you will pay. This will help you determine the overall cost of the loan. When using a federal loan, you are automatically enrolled in a payment plan of 10 years. However, you can change this to something that works better for you.

Understand Post-Loan Life

While you may not have to make any payments while you are in school, particularly if you took out a federal loan, you must remember it is still a loan and you will still have to pay it back. Know when your first payment is due, and remain in contact with your lender or servicer so you do not fall behind on payments.

Call a Florida Debt Defense Lawyer When Lenders Take Action

Student loans are necessary for many people to get a post-secondary education. However, these loans are just like any other, meaning if you do not repay them on time, the lender may take legal action against you. This happens more often than people think and if it has happened to you, our Fort Lauderdale debt defense attorneys can help. At Loan Lawyers, we know how to defend these legal actions to give you the best chance of a positive outcome with your case. Call us today at (954) 807-1361 or contact us online to schedule a free consultation and to learn more about how we can help.

Loan Lawyers has helped over 5,000 South Florida homeowners and consumers with their debt problems, we have saved over 2,000 homes from foreclosure, eliminated more than $100,000,000 in mortgage principal and consumer debt, and have recovered over $10,000,000 on behalf of our clients due to bank, loan servicer, and debt collector violations. Contact us for a free consultation and find out more about our money back guarantee on credit card debt buyer lawsuits, and how we may be able to help you.

 

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Florida’s Foreclosure Moratorium Has Expired – Here Are Some Options

The moratorium Governor DeSantis issued on evictions and foreclosures in April has now expired. Unfortunately, Floridians are still being hit hard by the pandemic, and many have yet to return to work, which means it is still very difficult for them to pay their rent or their mortgage. While this may seem like the worst-case scenario, there are some options for Floridians. Read on below to learn what those options are, and what you should do if you are facing foreclosure.

The Centers for Disease Control and Prevention

One reason DeSantis gave for allowing the moratorium to expire was that the Centers for Disease Control and Prevention now has the ability to freeze some evictions. To be eligible, tenants must submit a declaration form to their landlords stating that they have experienced a significant loss of household income, and that they have taken great measures to obtain government assistance.

A spokesperson for DeSantis stated that one reason for the expiration of the order was so that tenants could avoid confusion regarding whether they are eligible for CDC’s eviction order, or the state-wide moratorium. Lawyers and court staff in the state have had to come to their own interpretations of the law to determine which one would prevail.

Texas has avoided this problem by requiring landlords to notify tenants about the CDC’s eviction order, and to give them the specific declaration form they must fill out. Florida has not implemented any of those same rules.

Still, even with the CDC’s eviction order, it still does not protect single-family homeowners who do not have a federally-backed mortgage, as the federal government order does not apply to foreclosures. The approximately 70 percent of homeowners who do have a federally-backed mortgage are still likely eligible for programs available through Fannie Mae and Freddie Mac that protect homeowners from foreclosure.

It is clear that without the state-wide moratorium in place, owners of single-family homes, and those that rent them, are most at risk for facing foreclosure or eviction.

Boca Raton’s Answer

One city in Florida, Boca Raton, is offering its own rental assistance and foreclosure prevention programs. After receiving approximately $317,322 in relief funds from the Florida Housing Corporation (FHFC), Boca Raton has approved a program that can help either tenants who are facing eviction or homeowners who are in fear of foreclosure. The program will also help individuals with their homeowners’ association fees, penalty fees, late fees, and court costs for the time period of March 1, 2020 to November 30, 2020. The maximum amount allowed for each household is $5,800.

To be eligible for the program, renters must:

• Have a current lease agreement,
• Have been current with their rent before March 1, 2020,
• Be a minimum of 30 days behind with their rent, and
• Cannot have liquid assets that are greater than $25,000 in value.

Homeowners that want to use the program to avoid foreclosure must:

• Have a mortgage issued by an FDIC-insured lender as balloon payments, private mortgages, and home equity lines of credit are not eligible,
• Have been current with their mortgage before March 1, 2020,
• Cannot have liquid assets that exceed $25,000 in value, and
• Cannot have an assessed property value over $350,000, according to the appraiser’s most recent valuation.

Homeowners can also ask for assistance with association dues they have fallen behind in paying, as long as they are also asking for assistance with their mortgage payments. Assistance is not available for those that only need help with their association dues. Although this is an assistance program that Boca Raton has created, all homeowners in other locations should check with their own municipality to determine if there is help available.

What to Do if You Are Facing Foreclosure

While certain Floridians may be able to take advantage of assistance programs, the sad truth is that these will not apply to everyone in the state. So, what can you do if you are facing foreclosure?

• Understand the law: Florida is a judicial foreclosure state, which means if your lender wants to foreclose, they must file a lawsuit against you to gain approval from the court before proceeding. Many lenders may be more forgiving at this time but even if they are not, it will still take a while to foreclose on the home, which may give you the necessary time to reach a solution.
• Read your agreement: Not all mortgages are created equally, so it is important to read yours through and understand it. Is there a right of redemption that allows you to reverse a foreclosure through a grace period? Can a deficiency judgment be issued against you in the event of foreclosure? Understanding these terms will give you an idea of what to expect.
• Contact your lender: Your lender will most definitely proceed with the foreclosure process if you do not contact them. They will assume you are not interested in possible alternatives and so, will simply foreclose on the home. Homeowners are often surprised at how willing their lender is to work with them because truthfully, lenders do not want the hassle of the foreclosure process. Nor do they want your home. As difficult as it may seem, call them and ask if there are any possible alternatives to foreclosure.
• Look into government programs: The federal government also has certain programs available to help homeowners facing foreclosure. For example, the Making Home Affordable program offers loan modifications and refinancing packages for individuals that qualify.

If you feel that you have exhausted your options, or you are not sure where to turn, contact a foreclosure defense lawyer who can help.

Our Foreclosure Defense Lawyers in Florida Can Help

No one wants their home foreclosed on, but the good news is that it may not have to happen to you. At Loan Lawyers, our Fort Lauderdale foreclosure defense attorneys understand the defenses available in these cases and we will use them to help you save your home. Call us today at (954) 807-1361 or contact us online to schedule a free consultation and to learn more about how we can help.

Loan Lawyers has helped over 5,000 South Florida homeowners and consumers with their debt problems, we have saved over 2,000 homes from foreclosure, eliminated more than $100,000,000 in mortgage principal and consumer debt, and have recovered over $10,000,000 on behalf of our clients due to bank, loan servicer, and debt collector violations. Contact us for a free consultation to see how we may be able to help you.

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Things to Know if the Pandemic Has You Considering Bankruptcy

The COVID-19 pandemic has hit Floridians and people throughout the country in extremely difficult ways. In April, just a few weeks after shelter-in-place orders were issued in nearly every state, 22 million people filed unemployment claims. With the virus still circulating in communities, and businesses slowly reopening or still closed, it is expected that many more Americans will start filing bankruptcy claims. If you have lost your job or experienced other financial difficulties during this unprecedented time and are considering filing for bankruptcy, below are some things you need to know first.

Know Your Options

When debt is spiraling out of control, many people think they do not have any options but to continue to ignore phone calls from debt collectors. Truthfully, though, you have three options: You can either continue to make your minimum payments, negotiate a settlement with the debt collectors, or file for bankruptcy. In most circumstances, it is not logical to file for bankruptcy without first exploring your other options.

It is possible in many instances to get back on your feet without filing for bankruptcy, and banks and loan servicers are often willing to work with you, particularly during this difficult time. Although bankruptcy can provide immense financial relief, it should only be used as a last resort.

Call Lenders Before Filing

During this time of the pandemic, many regulators, lawmakers, and financial institutions have rolled out multiple assistance programs that you may be able to take advantage of while you still can. Some of the biggest lenders have created hardship programs that allow you to defer certain payments, including student loan debt, credit card debt, and car loans. If you have fallen into financial hardship due to the pandemic, call your lender and ask about any assistance programs they may offer. Make sure you do so before you start to incur late fees, as those will cost you more in the end and the lender may even be more willing to work with you.

Understand the Other Actions to Take

Financial hardship programs will only be in effect for so long before the lender expects you to start paying your bills on time once again. Additionally, certain lenders may also expect you to make all of your missed payments at the same time. If you still feel that you cannot meet your financial obligations, it is time to take some additional steps.

If your mortgage is underwater, meaning the total on the home loan exceeds the amount of the home’s value, ask your lender if you are eligible for a loan modification. A loan modification will change the terms of your mortgage, including possibly the principal amount you owe. If the lender approves your request, your monthly payments will be reduced to an amount that is easier for you to pay. Although you can ask your lender for a loan modification on your own, it is always best to work with an attorney who can negotiate on your behalf and prepare the necessary paperwork.

If it is credit card debt you are suffering from, you can also ask the lender to negotiate either a debt management plan or settlement. This step will likely require working with a non-profit debt counselor that can consolidate the debt into one monthly payment that you will pay off over the course over a number of years. Also, credit card companies will often agree to a settlement. A settlement will only work if you can make a lump sum payment that repays a portion of your debt and after the payment is made, the debt is considered repaid.

Know What to Expect If You File for Bankruptcy

The two most common types of bankruptcy filed are Chapter 7 and Chapter 13. In a Chapter 7 bankruptcy, you will have to sell at least a portion of your assets, including a second property or vehicle you may own, stocks and bonds, or collectibles. The proceeds from the sale of the assets will be put towards your debt. Once the bankruptcy is approved, your outstanding debts are typically wiped clean. The entire process from beginning to end will typically take approximately three to five months. If you cannot pay back all, or at least a significant portion of your debt, Chapter 7 is likely the best option for you.

Chapter 13 bankruptcies, on the other hand, are also known as reorganizational bankruptcies because they do just that. In a Chapter 13 bankruptcy, a repayment plan is created that will allow you to pay off all of your debt, or a significant portion of it, usually within three to five years. People that are behind on their mortgage payments and are in fear of foreclosure often find that filing Chapter 13 bankruptcy is a good option because they will not lose their home in the process. Like your other property, you can typically keep all of your assets in a Chapter 13 bankruptcy, but you are expected to pay off the debt.

With both Chapter 7 and Chapter 13 bankruptcies, you must appear in court so a judge can approve the different aspects of your case. Although most federal courts shuttered during the early days of the pandemic, many are now open. Still, most court hearings are being held virtually, with the courthouses being closed to the public. Your case may be postponed, or it may be heard remotely over a platform, such as Zoom.

A Florida Bankruptcy Lawyer can Help with Your Case

The pandemic has hit Floridians extremely hard, and many are now considering filing for bankruptcy. If you are consumed by debt and think bankruptcy may be your only option, call our Fort Lauderdale bankruptcy attorneys at Loan Lawyers. We will guide you through the process, tell you what to expect, and make sure you are prepared so you have the best chance of success with your case. Call us today at (954) 807-1361 or contact us online to schedule a free consultation so we can discuss your legal options.

Loan Lawyers has helped over 5,000 South Florida homeowners and consumers with their debt problems, we have saved over 2,000 homes from foreclosure, eliminated more than $100,000,000 in mortgage principal and consumer debt, and have recovered over $10,000,000 on behalf of our clients due to bank, loan servicer, and debt collector violations. Contact us for a free consultation to see how we may be able to help you.

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How Many Times Can You Apply for a Loan Modification?

If you are struggling financially and are facing foreclosure or bankruptcy, meeting with a loan modification lawyer is one potential tool that could help your situation. But can you apply for a loan modification more than once?

Basics of Loan Modifications and Requests

There is no legal limit on how many modification requests you can make to your lender. The rules will vary from lender to lender and on a case-by-case basis. That said, lenders are generally more willing to grant a modification if it’s the first time you’re asking for one.

While most lenders understand how life events can disrupt someone’s financial situation — for example, losing a job or the death of a family member — a second modification request may make it appear as if you are incapable of maintaining your finances.

There are guidelines on the number of potential modification requests you can expect to be granted by certain lenders. People with loans backed by the Federal Housing Association (FHA) can generally expect to receive two to three loan modifications, although the FHA will only modify a loan once every two years.

Homeowners with loans backed by Fannie Mae or Freddie Mac can usually get three to five modifications, but requests will get increasingly difficult to fill because these organizations are required to lower your mortgage payment by 10 percent if you receive two or more modifications. With private lenders, you might not be able to receive a modification at all because there’s no public requirement for them to consider any modification requests.

Will a New Loan Modification Improve My Situation?

Whether a new loan modification will help your situation depends on the existing terms of your loan and the terms granted by your modification. In general, getting your interest rate lowered or your principle reduced will help. However, simply having payments deferred might not help in the long-term because of the additional interest that you’ll accrue.

That’s why it’s important to hire a foreclosure and debt defense lawyer to help you negotiate the best possible terms for your modified loan. Additional loan modifications might also impact your credit score, which could have financial repercussions later on.

Is the Approval Process Different the Second Time Around?

If you’re going back to the lender for an additional loan modification, you should expect a more thorough and intense approval process. The lender might ask for additional documentation about what caused you to fall behind on your payments, as well as proof that you’ll be able to make future payments.

A lawyer trained to handle loan modification proceedings can help you collect the documents needed and build a compelling case to persuade a bank or other lender to grant you the loan modification that you need.

Contact a Florida Loan Modification Lawyer

The prospect of having your home foreclosed on is a terrifying notion, to say nothing of what can happen if the bank actually repossesses your house. To prevent this catastrophe from happening to you, turn to the experienced foreclosure defense attorneys at Loan Lawyers. At Loan Lawyers, our team takes a comprehensive approach to foreclosure and debt defense cases. We’re ready to negotiate aggressively to seek the relief you need. Get in touch today by calling us or visiting our contact page.

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Debt: The Good, the Bad, and the Ugly

You may have heard that there is good debt and bad debt. Good debt is typically considered debt that will work for you at some point in the future, such as a mortgage or a student loan. Bad debt, on the other hand, usually consists of consumer debt that will not do anything for you, such as credit card debt. While these are very simplistic definitions of good debt and bad, the definitions of good debt and bad debt are much more nuanced. No one should take on debt just because they think it is ‘good’ and without realizing all the ramifications it may bring.

Student Loan Debt

Tuition in America is extremely expensive and most people cannot afford to obtain a post-secondary education without going into at least some debt. However, not all college and university programs are created equal, and it is critical that you understand how much student loan debt is good, and when it starts to move into the bad category.

According to the Charles and Helen Schwab Foundation, you should not take out a student loan that is more than what you expect to earn in the first year. For example, if you want to work in education, you may consider going to school to obtain a master’s degree in education. Perform some research to determine how much you expect to make in your first year. If that amount is $65,000, you should not borrow more than $65,000. That total includes the student loan debt you will need for your total education, not each year.

This logic works because it is presumed that the longer you work in your chosen field, the higher your salary will climb. As such, you should be able to repay the debt and the accumulated interest within the typical 10 years you will have to repay it.

However, if the economy is on a downturn, or the job market is unstable, you may want to take on less debt than what you expect to make in your first year. Otherwise, your student loan debt could quickly be categorized as bad debt. If you are already enrolled in school when the economy takes a hit or there is a sudden lack of jobs in your field, consider taking on less debt in future years.

Your Mortgage

Historically speaking, mortgages have been considered one of the best types of good debt a person could incur because every time you make a monthly payment, you are building equity in your home. Still, there is perhaps no one in the country that knows more than Floridians that mortgages are not always a guarantee that everything will work out. Foreclosures can happen. Home prices do not always increase the way they are expected to, and if you borrow more than you can afford, or do not fully understand the terms of your mortgage, owning a home may actually hurt you more than it helps.

This was never more evident than during the subprime mortgage crisis in 2008. At that time, home prices plunged while adjustable-rate mortgages (ARM) were adjusted upward and many homeowners lost their home to foreclosure. Still, home loans are considered as one of the safest investments you could make today, but you must understand how much you should borrow, and the market conditions at the time you purchase the property.

The general rule of thumb is that your monthly mortgage payment should not exceed more than 28 percent of your gross monthly income. Remember as well that the recommended percentage includes not only the principal and interest on the loan, but also private mortgage insurance, property taxes, and other expenses that are included within the monthly payment.

In addition to following the percentage rule, you should also take many other factors into consideration when applying for a mortgage. To determine the monthly mortgage amount you can afford, consider the size of your family, as well as the possibility of future layoffs or any other event that may affect your ability to pay your mortgage on time every month.

Distinguishing Good Debt from Bad Debt

Although certain types of debt, such as home loans, are considered good debt and other types, such as consumer debt, are considered bad, clearly, it is not always that simple. When determining if debt is good or bad for your personal situation, you must ask yourself whether the debt will give more than what you put in.

It is a question that seems rather simple, but you really have to give the answer a lot of thought. Consider factors such as not only the principal amount, but also the interest that debt will accrue, and other ways you could use that money. When you start to look at debt this way, it is true that even a credit card could be considered good debt, as long as it will work for you in the end.

When Debt Becomes Ugly

It is clear that even when you incur purportedly ‘good’ debt, it can quickly become a bad situation. In the best of cases when this happens, people may experience financial hardship for a brief period of time before quickly getting back on track. Unfortunately, this often does not happen. When that is the case, the debt may turn from bad to ugly.

The worst type of debt, ugly debt, is that which causes a debt collector or creditor to take legal action against you. After you have not paid your debt for a while, a debt collector may file a lawsuit against you, which could result in wage garnishment or other consequences that could place you in even greater financial hardship.

Suffering from the Wrong Type of Debt? Call Our Florida Debt Defense Lawyers

Categorizing all of one type of debt as good or bad is one reason why debt soon becomes unmanageable for some and it turns into ugly debt. If you are suffering from debt and a debt collector or creditor has taken legal action against you, our Fort Lauderdale debt defense lawyers are here to help. At Loan Lawyers, we know how to defend against debt lawsuits so you do not fall further into financial hardship. For the best chance of success with your case, call us today at (954) 807-1361 or contact us online to schedule a free consultation.

Loan Lawyers has helped over 5,000 South Florida homeowners and consumers with their debt problems, we have saved over 2,000 homes from foreclosure, eliminated more than $100,000,000 in mortgage principal and consumer debt, and have recovered over $10,000,000 on behalf of our clients due to bank, loan servicer, and debt collector violations. Contact us for a free consultation and find out more about our money-back guarantee on credit card debt buyer lawsuits, and how we may be able to help you.

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Commercial Cash Management Loans

Commercial cash management loans are loans that generally have extremely onerous terms for the commercial borrower.  Often even if you make the payments on these loans, you can find a commercial loan in default.  For example, if your cash flow is not compliant with the terms of the mortgage, the loan servicer can transfer your loan to special servicing.  They can usually also place the loan in special servicing if the rented space falls below a specified percentage of rentable space.  For example, if occupancy falls below 80% (or some other number specified in the mortgage), they can declare a default.  Either of these examples may be enough to put the loan into cash management status and incur special servicing fees.  Again, this can occur if you never missed a payment, and certainly can occur if you have missed a payment.

Special servicing fees can run thousands of dollars per month and completely bury your property.  Often, the investors in these loans employ a “loan to own” strategy.   They bury the property in special servicing fees and default interest, even if you never missed a payment. Once they have buried the property with ridiculous, but often legal, fees and charges, they eat up all of your equity making the property have no net value.  They then try to foreclose causing the commercial property owner to incur tens of thousands in legal fees while also running up a massive bill on their side.  Then they try to convince you to deed the property to them or they proceed to foreclosure and buy the property at auction.

If you find yourself in default or in foreclosure in a commercial cash management loan, do not roll over and do not allow the loan servicer to take advantage of you.  There may be a real defense that you can assert to turn the tables on the loan predator, I mean loan servicer.  You cannot just turn to any law firm though.  You need an aggressive law firm that specializes in defending foreclosures and has experience in defending cash management loan foreclosures.

One of the defenses that you may be able to assert is the negotiability of the promissory note.  These commercial cash management mortgages are extremely complex legal instruments that often span dozens, if not hundreds, of total pages.  A promissory note that is a simple promise to pay a fixed sum of money is a negotiable instrument in Florida.  This means that the loan can be sole multiple times and any company that is in possession of the note indorsed in blank may enforce the note.  Often, these commercial cash management loan foreclosures have promissory notes that are indorsed in blank.  However, cash management loans are anything but simple promises to pay.  They contain provisions as I have eluded to above, like occupancy and cash flow requirements that can trigger a default.   This may make the loan a non-negotiable instrument.  If that is all the loan servicer has to prove it has the right to enforce the note, they may have a real problem on their hands and you may have a real defendable case.

Negotiability is only one of the myriad of issues that may be raised in defense of a cash management mortgage loan.  It is certainly not advisable to roll over and give up nor is it advisable to use a lawyer who is not well versed in these types of mortgages.  Finding a lawyer who understands these loans and has experience in defending defaults and foreclosures relating to these loans may make the difference between saving your commercial property and losing it entirely.

Further, these loans often have personal guarantees that could leave the guarantors liable for hundreds of thousands of dollars, or even millions of dollars, of liability.   These mortgages are terrible and are generally full of terms that only benefits the lender and their successors.  There is too much at stake to leave the defense of these defaults and foreclosures to amateurs.  Call loan Lawyers today for your free consultation to discuss your commercial cash management mortgage loan and let’s see how we may be able to help you.

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Are There Benefits to Letting the Bank Foreclose?

As Floridians continue to feel the fallout of the ongoing pandemic, Governor Ron DeSantis has been asked by two advocacy groups to extend the moratorium currently on mortgages in the state. In late September, the Florida Housing Justice Alliance, along with Connected in Crisis, collectively wrote to the governor asking him for an extension on the moratorium, as well as a freeze on utility shutoffs. Currently, both of these pandemic relief solutions are set to expire on October 1, 2020.

The governor has not yet responded to the request that would bring relief to millions of homeowners in Florida. For those that are facing foreclosure, and do not think there is any chance of keeping their home, it is easy to focus on the negative aspects of the process. As difficult as it is to think though, there are some benefits to simply letting the bank foreclose.

When to Walk Away From a Forclosure

Before getting into the benefits of letting the bank foreclose, it is important to know when it might be the best option. A number of defenses to foreclosure are available in many cases; you really need to weigh your options and determine if the risks outweigh the rewards.

When a home is underwater, it may be a good idea to simply walk away and let the bank foreclose. An underwater home refers to when the mortgage loan is for more than what the home is worth. During the housing crisis of 2008 and 2009, this happened all around Florida and throughout the rest of the country. Borrowers were underwater on their mortgage and even though they could pay their home loan, they simply decided not to.

It is generally not recommended that homeowners walk away from their property simply because their mortgage is underwater. When borrowers are able to repay the loan, doing so will cause much less harm to their credit report than a foreclosure.

If you are eligible for a short sale or a deed-in-lieu of foreclosure, these are also better options than simply walking away and letting your lender foreclose. You will still unfortunately lose your home with either of these options, but you will also feel fewer negative impacts once the process is over.

Benefits of Letting the Bank Foreclose

If you are behind on your mortgage payments, or the lender has already started the foreclosure process, you are likely thinking the worst has happened. Although the thought of foreclosure is a nightmare for any homeowner, there are some benefits that you may not expect.

Once the lender has started the foreclosure process, you may be able to save more money. Many people stop paying their mortgage payments once the lender starts the foreclosure process and instead, they set that money aside so they can save for an apartment or other housing accommodation.

If you do qualify for a short sale or a deed-in-lieu of foreclosure, your attorney can include a clause within the agreement that the lender is prohibited from seeking a deficiency judgment. If successful, this means that the lender cannot pursue the remaining amount on the mortgage. In the event that you do not qualify for a short sale or deed-in-lieu, it may not be wise to stop paying your mortgage. In these instances, you will not draft an agreement with the lender and so, they may still be able to pursue a deficiency judgment, meaning you will still owe the outstanding balance.

When facing foreclosure, it is easy to think that you are out of options. Fortunately, you may find that the process actually gives you more options than you would have first thought. Lenders are very willing to work with borrowers early in the foreclosure process. They don’t really want the burden of taking your home and reselling it, because that takes time and money. As such, you may find that your lender is more willing to negotiate with you. You may be able to negotiate the interest rate, the term of the home loan, and perhaps even the principal left on the mortgage. These are options you may not have available until foreclosure becomes a reality.

Even with how hard the foreclosure process is, once it is over you will have a fresh start. You will no longer have the immense burden of a mortgage you cannot pay, or of trying to find a buyer for a home you do not think you can sell. Although you will be unable to buy a home for some time, once the foreclosure process is over, you can find a new home you can actually afford, and enjoy living in it, too. With the heavy burden gone, you may find you enjoy your new home even more.

Lastly, you will learn many valuable lessons throughout the foreclosure process, and likely even beforehand. While it is a difficult process to go through to learn those lessons, they will be invaluable to you as you move forward in your new life.

For example, if you had to foreclose on your home because you lost your job and could not pay the mortgage, you can start to create a contingency plan in the event that it occurs again. You may start that emergency fund you have been putting off, so that you are prepared for any future financial challenges.

Want to Keep Your Home? Our Florida Foreclosure Defense Attorneys Can Help

Although you may reap some benefits when simply letting the bank foreclose, you may still have options that will allow you to stay in your home. At Loan Lawyers, our Fort Lauderdale foreclosure defense attorneys know the defense strategies available to homeowners. After reviewing your case, we will advise on the defenses available to you, effectively negotiate with the lender on your behalf when possible, and give you the best chance of keeping your home.

Call us today at (954) 807-1361 or contact us online to schedule a free consultation with one of our skilled attorneys.

Loan Lawyers has helped over 5,000 South Florida homeowners and consumers with their debt problems, we have saved over 2,000 homes from foreclosure, eliminated more than $100,000,000 in mortgage principal and consumer debt, and have recovered over $10,000,000 on behalf of our clients due to bank, loan servicer, and debt collector violations. Contact us for a free consultation to see how we may be able to help you.

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Common Mistakes Made After Becoming Debt-Free

It seems as though the year 2020 has not brought a lot of good for the people in Florida, or anywhere else in the country. However, a new study has shown that there is some positive news. According to WalletHub.com, American consumers paid off $118 billion in credit card debt during the first half of the year. That may seem impossible during the COVID-19 crisis, or at any other time period in history. In fact, this figure is a record that has never been set before in the nation. The increase is being attributed to a reduction in credit card debt, more austerity being practiced in households, and the stimulus checks issued by the government in the early days of the pandemic.

Again, the news is good for borrowers who have had trouble finding anything good to come out of the pandemic. At this time, it is important to be able to continue focusing on the positive and to avoid the most common mistakes people make after becoming debt-free.

Getting Back Into Debt

People fall back into debt after finally getting rid of it for a number of reasons. One is that they still have too many expenses and their income does not fully cover it, so they have to rely on their credit cards. Others have simply felt deprived of buying the things they love, so they go on a spending spree with little regard to how much they are spending and how much they will have to pay back.

It is essential that you cut back on spending and that you absolutely do not buy things you cannot afford. If you have to buy something using a credit card, make sure you can pay off the balance in full when the bill comes at the end of the month. Any time you are tempted to make a purchase, do not only ask yourself if you can afford it, but also remind yourself of the past few months or even years. Getting out of debt is very challenging and few people want to do it more than once. Remember the challenging times, and you will likely be less tempted to get back into that situation again.

Closing Your Credit Card Accounts

The idea that closing your credit card accounts will help you avoid falling back into debt is one that is filled with good intentions. Unfortunately, it is a move that could hurt you more than keeping them open.

Even if you are not thinking about it right now, there is a chance that at some point, you may want to buy a home, take out a car loan, or apply for another type of loan. To do this, you will need a good credit history, as it is one of the determining factors in whether or not a lender will give you a loan. Closing your credit card accounts will only hurt your credit score.

Lenders prefer to give loans to people who have a long borrowing history. If you close the account, it will fall off of your credit report and lenders will be unable to see it and it will not count towards your borrowing history. When you really do not want to use the card, but you also know it is usually not worthwhile to close the account, shred the cards instead with a pair of scissors but keep the account open. This will prevent you from leaning on the card too much, but will also keep the account, and its good standing, on your credit card.

Still, often it is a better idea to move away from the idea of not using cards at all and instead move towards the idea of using the card more wisely. Many credit cards have an annual fee attached to them and if you cut up the card and cannot use it, you are still responsible for paying the annual fee. Also, if your card goes unused for too long, there is a good possibility that the creditor will close the account.

If you have confidence in your new spending habits, keep the card and use it for small purchases, such as groceries or one tank of gas, and pay off the balance every month. This will show future lenders that you are not a borrowing risk, and that you will likely pay off any debt you take on with them.

Failing to Establish New Financial Goals

Many people work so long to get out of debt that they start to think that is the only financial goal a person could have. Truthfully though, one of the reasons you went into debt is likely because you did not have financial goals. If you do not make any new ones after you get out of debt, you may find yourself in that position again. Now is the time to start investing in retirement savings, creating an emergency fund, and start putting money away for your child’s tuition or any other large financial goals you have been dreaming of while paying off your debt.

Failing to Check Your Credit Report

If you did not check your credit report with one of the major bureaus while you were paying off your debt, it is critical that you do it now. Obtain a free credit report from TransUnion, Experian, and Equifax every year and carefully review it. This is the only way to know if old debts are still showing up, if the report contains debt that is not yours, or if it contains any other errors. These mistakes will not only lower your overall credit score, but they can also indicate that something more serious has occurred, such as identity theft.

Our Florida Debt Defense Attorneys can Help with Legal Actions

Getting out of debt is a great feeling but unfortunately, it is one that many still have not yet experienced. If you are suffering from debt and a collector has taken legal action against you, our Fort Lauderdale debt defense attorneys can help. At Loan Lawyers, we know the many defenses available in these lawsuits and will use them to give you the best chance of success.

Call us today at (954) 807-1361 or contact us online to schedule a free consultation and get the sound legal advice you need.

Loan Lawyers has helped over 5,000 South Florida homeowners and consumers with their debt problems, we have saved over 2,000 homes from foreclosure, eliminated more than $100,000,000 in mortgage principal and consumer debt, and have recovered over $10,000,000 on behalf of our clients due to bank, loan servicer, and debt collector violations.

Contact the debt defense team at Loan Lawyers for a free consultation and find out more about our money-back guarantee on credit card debt buyer lawsuits, and how we may be able to help you.

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