Orlando Foreclosure Defense

“Grab life by the horns,” I know its an abused cliché and whenever you hear it you roll your eyes, but there is solid logic behind the saying. We should all manage our lives as efficiently and effectively as possible. There should be no shame in living your life like a private company, the company of you. The benefit of conducting your life in this way is being able to act coldly and calculatingly, with the bottom line always in mind.

This mentality has served thousands of corporations well, and has allowed them the flexibility to get out of poor business deals without feeling bad about it or without any sort of social stigma. So why is the government trying to legislate a double standard between corporations who can strategically default without any recourse and private individuals who they feel shouldn’t be able to without penalties.

The House of Representatives recently passed a measure that would give the Federal Housing Administration the flexibility to shore up its finances by barring government backed loans for borrowers who had strategically defaulted. This measure still has to pass the Senate and many feel that even if that were to happen it would be unenforceable. However, it is troubling to see that congress would be willing to go to such lengths to punish private individuals when no such course of action has been taken against big businesses.

This sort of double standard is yet another example of how strategic defaulters are being demonized for doing something that banks and corporations have been doing for years. There are no punishments for these banks and corporations; congress has not made any attempts to deny these companies tax deductions or bailout money for strategically defaulting. So why should private individuals be treated differently?

Individuals should be afforded every benefit that a company has when it comes to strategic defaults, and should thus be free to execute their personal finances in a way that benefits them the most. Punishing strategic defaulters for making economically sound decisions makes no sense.

There are changes that have made the short sale in Florida easier and hopefully quicker. The changes have been made by the US Treasury Department’s Home Affordable Foreclosure Alternatives program and went into effect on April 2. The goal with these changes is to save homeowners credit and put them in a position to not worry about future liability so that the homeowner can get on with their lives.

The first step to getting the benefits of these changes is passing HAFA’s qualifying criteria. The criteria includes that the home must be the primary residence, the home loan must be before January 1, 2009, they must be behind on their payments or soon will be, the unpaid principal balance on the loan is no more than $729,750, and that the total monthly payment on the mortgage is more than 31% of the gross income of the borrower.

Those who qualify for a HAFA short sale are fully released from future liability from the first mortgage debt, which essentially means that they cannot come after the homeowner for repayment on the loan. A HAFA short sale also means that the homeowner will receive a one time payment of $3,000 that is to be put toward moving costs. Additionally the entire process has been simplified by HAFA, which many believe will give the homeowner a quicker outcome, they claim that the turnaround for an approval or denial will be ten days.

Many of you may still be reading this and are cynically saying to your self, “this is all well and good, but I bet my lender isn’t apart of this program.” Well you are likely wrong, because most major lenders are already on board with the program, including Citibank, Wells Fargo, Bank of America, Wachovia, Chase, and Washington Mutual.

Will HAFA’s rule changes fix Central Florida’s housing sector? I’m not sure, but many experts believe that these changes are moves in the right direction to helping out homeowners and getting Orlando back on its feet.