What is Title Insurance?

Title insurance is different than most types of insurance such that it covers events that have already happened. Title insurance is insurance guarantees that you own the home you are purchasing, informs you of any liens or encumbrances on the property, and protects you from any unknown claims of ownership or interests in the property.

Title InsuranceBefore title insurance will be granted, a title search must be performed. A title search will check to see that the seller of the property is the only owner of the property, will check for banks that may have an outstanding mortgage on the property, and will search for liens and unpaid taxes.

The list from a title search can be daunting, which is why most title insurance companies require a qualified third-party to do the title search in order to ensure that any of the previously mentioned issues are taken care of, or at least accounted for. The title search minimizes the risk of the insurance company offering the title insurance, which allows them to offer it for a low, one-time fee.

If a proper title search is not done and title insurance is not purchased, the buyer could end up buying a house with a large lien on it, potentially bankrupting the buyer. Even worse, the buyer could buy the house from a seller that was only a partial owner or not the owner at all.

*Image courtesy of Stockfreeimages.com

Mortgage Debt Relief Act Extended

If your home is facing foreclosure and you were unable to sell your house in 2012, there is good news: The Mortgage Debt Relief Act was extended by Congress for another year as part of the legislation that prevented the nation from the “fiscal cliff.”

This is especially good news to homeowners in South Florida, where home prices have dropped drastically since December 2006.

Mortgage Debt Relief ActNormally, when the bank forgives a portion of your loan, it is considered taxable income. The Mortgage Debt Relief Act allows homeowners who sell their homes through foreclosure or short sale to be exempt from being taxed on up to $2 million in savings. Homeowners who choose Loan Modification are also exempt up to the same amount.

Since it was passed in 2007, the Mortgage Debt Relief Act has saved Floridians alone millions of dollars. The bill will be extended until January 1, 2014.

Due to the extension of only one year, realtors are encouraging homeowners facing foreclosures to act, and some are even calling 2014 “the year of the short-sale.”

If you have questions about foreclosures, short-sales, or any other real estate issue, you should contact a Real Estate Attorney.

Source: http://www.newstimes.com/business/press-releases/article/Mortgage-Relief-Act-Extended-for-One-More-Year-4164464.php

Short Sales for Non-Delinquent Borrowers in Florida and Across the U.S.

Starting TODAY, for the first time ever, borrowers, in Florida and across the U.S., who have never missed a mortgage payment will be able to short sell their houses if they can demonstrate a hardship, such as loss of employment or the death of a spouse.

This new rule will allow for underwater homeowners to get rid of their mortgage and also take advantage of the Mortgage Forgiveness Debt Relief Act of 2007, which is expected to expire at the end of the year.

Previously, only delinquent borrowers have been eligible for short sales.

There is a downside. The average person suffers a 150 point credit score loss after a short sale. This will be no different for non-delinquent homeowners because there is no special coding that differentiates them from those who went months without paying their mortgages.

Photo courtesy of stockfreeimages.comThe Federal Housing Finance Agency (FHFA) is currently in discussions with the credit industry to determine if and how this new law will affect credit scoring, but no solution has been found as of yet.

If you are considering a short sale, you should consult an attorney to discuss your options. There are many things changing in the housing market, and it is important to have all of the facts before making a decision.

Source: Inman News

Having Trouble with your Mortgage Lender?

Has it taken an extremely long amount of time to refinance, to close, or just get a response from your lender? There is a new place where borrowers can file a complaint that many may not know about.

The Consumer Financial Protection Bureau “began accepting such complaints this month.” One of the aims of the Consumer Financial Protection Bureau is to “protect consumers from risky loans” and to accomplish the task it looks for “violations of mortgage laws and other issues.” You can also turn to such places as the Better Business Bureau, any number of government agencies, state banking departments, and many others. There are also ways you can try to avoid having problems with your lender.

One way is to do your homework. Know whom the lenders are by talking to them, asking for detailed information, talk to people in the industry, or look for reviews. One person within the industry says to ask a loan officer for their cell phone number because if they refuse, it “could mean that he or she may not be readily available through the process.” Doing your homework before you get a loan can help you save time, money, and unnecessary stress in the long run. A Florida attorney, such as attorneys at Boyer Law Firm, can also help you review these documents for technicalities that are normally missed.

Information for this article was obtained from http://www.nytimes.com/2012/01/29/realestate/mortgages-on-troubleshooting.html?_r=2.