Beginning in 2004, investors from around the country were enticed at real estate investment seminars and through real estate investment clubs and blogs to invest in single-family and condominium flip deals in Florida. Many of these deals went sour, leaving investors with an empty lot or a half-completed home with a substantial mortgage or even a completed home or condo unit worth much less than the mortgage balance. At the same time, homeowners and commercial building owners who purchased before the downturn are saddled with mortgages far exceeding the value of their properties.
Walking away from residential properties in Florida comes with substantial risk. Not only will your credit be ruined, but also Florida is a recourse state, meaning that the lender can pursue the borrower for a deficiency judgment. For commercial property owners, generally, a personal guarantee is in place, making the prospect of walking away even the more risky.
In some states, investors simply dump a property or walk away from it. Some people think that may work in Florida, too, but Florida is tougher on abandoned mortgages.
Florida mortgages are recourse debts. That means if part of the debt is discharged under certain circumstances, you have to pay ordinary income taxes on that discharged debt. In most instances, this just racks up more debt you cannot pay — only, now, it’s with the government, instead of a bank.
There may be several options for getting out, including:
- Short sales
- Deeds in lieu
- Mortgage renegotiation
- Mortgage “workout”
Tannenbaum Scro has helped hundreds of investors, homeowners and commercial owners find alternative solutions for allowing the foreclosure. For investors, we have made the case that the mortgage brokers and bankers were complicit in fraudulent and deceptive activities that took place between since 2004 with these investments. As a result, we have convinced many of the banks to discount the principal balance of investor mortgages significantly. For homeowners and commercial owners, there exist other means to engineer a favorable workout.
Our lawyers will:
- Defend your foreclosure
- Negotiate a workout package with your bank
- Connect you with short sale realtors who may arrange a short sale
- Attempt to rehabilitate your credit
- Attempt to mitigate your tax exposure