Fort Lauderdale Bankruptcy Lawyer Blog

I've spent most of the month posting about two important programs that Florida Housing will soon make available in Broward County: The Unemployed Mortgage Assistance Program (UMAP) and Mortgage Loan Reinstatement Payment (MLRP) Program.

There are many different eligibility requirements that I've already posted about (homeowner requirements and property requirements). But there's one more requirement worth talking about: the mortgage requirements.

Mortgage Requirements
In order to be eligible for either of the programs, your mortgage must currently be serviced by a participating lender. In Florida, Bank of America, Wells Fargo, Chase, Wachovia and CitiMortgage participate in the program.

Your first mortgage cannot be more than 180 days past due at the time you apply.

The existing first mortgage must have originated on or before January 2009 and you can't owe more than $400,000 at the time of application.

The maximum combined loan-to-value cannot be more than 200%.

The loan cannot be a seller-financed loan.

Click here for more information on Broward Florida Hardest Hit Program.pdf

In order to qualify for the Florida Hardest-Hit Program when it's available in Broward County next month, your property must also meet certain requirements. This is in addition to the other requirements that I've already posted about.

Property Requirements
First let's talk about what your home can be in order to apply for assistance:
It can be a single family home, condo (must be on the FHA approved list), townhome, mobile home or a duplex/triplex/fourplex that has one of the units owner-occupied.

Exclusions
1. The property cannot be abandoned, vacant or condemned.
2. The homeowner cannot have more than one property other than their primary residence.

Under the Florida Hardest-Hit program that is going to roll out in Broward County next month, you must meet eligibility requirements. I've gone over those requirements in earlier posts and wanted to take a look at what type of situations or events would disqualify you from being considered.

Assets or Cash Reserves
If you have assets or cash reserves (retirement funds or qualified educations plans don't count), that are equal to, or more than, three times the total monthly mortgage payment on your house (including tax and insurance) - you must first use those assets towards your mortgage payment or other existing debt before you'll be eligible for UMAP/MLRP funds.

Financial Hardship Defined
The borrower/co-borrower must have experienced a financial hardship through no fault of their own. The reduction of income due to death, divorce or disability of a borrower or a co-borrower will not qualify as a financial hardship. (I'm not quite sure how they consider the death or disability of someone an event that one can control but that's what the guidelines say!)

Furthermore...
A homeowner cannot have:
1. A seller-financed mortgage;
2. A bankrutpcy that has not been discharged or dismissed; and
3. A conviction within the last 10 years on a mortgage-related felony.

But that's not all...the property has requirements also! I'll write more about that at a later time.

Florida Housing will soon be rolling out two programs to help distressed homeowners in Fort Lauderdale, Florida. This program was piloted in Lee County last year and will soon be available statewide.

There are two programs available: 1) Unemployed Mortgage Assistance Program (UMAP) and 2) Mortgage Loan Reinstatement Payment (MLRP) Program.

Unemployment Mortgage Assistance Program (UMAP)
Under UMAP, loan funds can be used to pay monthly mortgage and escrowed mortgage-related expenses on your Fort Lauderdale or Hollywood home until you can resume payments or up until 18 months - whichever comes first. This program is for first mortgage payments only.

Broward county homeowners who are unemployed, underemployed or have had a reduction of income because of death, divorce or disability are eligible. To be considered for these funds, you must meet eligibility requirements in three areas: 1) household eligibility; property eligibility; and, 3) mortgage eligibility. You must meet all criteria within each category to qualify. However, simply meeting all the eligibility criteria does not guarantee approval for assistance under either program. The mortgage company can still deny your eligibility.

Homeowner Requirements
1. Must be a Florida resident
2. Must be a legal U.S. Resident or a legal alien
3. Must ocupy the home as your primary residence
4. Must be unemployed or underemployed
5. Total household income must be below 140% of the area median income (AMI) this includes all income for persons living in the home who are 18 years and older)
6. Must have monthly housing debt that is more than 31% of the homeowners gross monthly income (monthly housing debt includes: mortgage principal, interest, taxes, insurance and homeowner association dues)

Click here for more information on Broward Florida Hardest Hit Program.pdf

Florida Housing will soon be rolling out two programs to help distressed homeowners in Fort Lauderdale, Florida. This program was piloted in Lee County last year and will soon be available statewide.

There are two programs available: 1) Unemployed Mortgage Assistance Program (UMAP) and 2) Mortgage Loan Reinstatement Payment (MLRP) Program.

Mortgage Loan Reinstatement Payment Program (MLRP)
Under MLRP, loan funds can be used to bring the past-due first mortgage current on your Fort Lauderdale or Hollywood home current. Up to four months of mortgage payments can be paid under this program.

Broward county homeowners who are unemployed, underemployed or have had a reduction of income because of death, divorce or disability are eligible.

To be considered for these funds, you must meet eligibility requirements in three areas: 1) household eligibility; property eligibility; and, 3) mortgage eligibility. You must meet all criteria within each category to qualify. However, simply meeting all the eligibility criteria does not guarantee approval for assistance under either program. The mortgage company can still deny your eligibility.

Homeowner Requirements
1. Must be a Florida resident
2. Must be a legal U.S. Resident or a legal alien
3. Must ocupy the home as your primary residence
4. Must be unemployed or underemployed
5. Total household income must be below 140% of the area median income (AMI) this includes all income for persons living in the home who are 18 years and older)
6. Must have monthly housing debt that is more than 31% of the homeowners gross monthly income (monthly housing debt includes: mortgage principal, interest, taxes, insurance and homeowner association dues)

Click here for more information on Broward Florida Hardest Hit Program.pdf

Lee County quietly began a pilot program in October, 2010 to help homeowners with temporary hardships catch up their mortgage payments. FUnded by the U.S. Treasury Department, the program provided up to 18 months of mortgage assistance or help in bringing delinquent accounts up to date.

In Lee County, 963 homeowners applied for the assistance. Of those applicants, 480 were rejected for various reasons (owned more than one property; were more than 181 days late on payments; or owed more than 400K on their loan). However, 64 homeowners were approved, 108 are still in the pipeline for assistance and 371 are still being reviewed.

Next month, the program goes statewide and homeowners in Dade, Broward and Palm Beach counties will be able to apply for the assistance. Applications will be limited so it's best to keep tabs on this program and apply as soon as you're able.

I'll have more on this program as facts become available

As a Fort Lauderdale bankruptcy attorney, I often meet with homeowners who are facing a scheduled foreclosure sale. During their free consultation, the main question they have is "how will a bankruptcy stop the sale of my home?" There are a couple of options available under the bankruptcy laws on how to stop a foreclosure sale.

First, either a Chapter 7 or a Chapter 13 bankruptcy filing will invoke an "automatic stay" and stop a foreclosure sale from happening as long as you file the bankruptcy case with enough time to submit a Suggestion of Bankruptcy notice to the Clerk of Court that is conducting the sale. Although you could technically show up the morning of the sale and do this, that's never a good idea. You should try and file your case at least 2-3 days before the sale to allow time to notify the Clerk's office of the bankruptcy filing. Ideally, you should file your bankruptcy case at least a week before but if all you have is a few days, it will suffice.

A Chapter 7 bankruptcy filing will stop the sale for you and eliminate all your debts, but it probably won't do much towards saving your home. After the case is over and the automatic stay is lifted, the foreclosure proceeding will start up again and a new sale date will be scheduled.

In a Chapter 13, aside from stopping the sale, you also have a couple of options that might help you stay in your home long term. In a Chapter 13, you can submit a repayment plan to the court that includes your mortgage arrearages (all the money that you're behind in your mortgage) and your current mortgage payment. The banks are forced to take your payments over three to five years and allow you to catch up with your mortgage. If you complete your plan, at the end of the repayment period, you are current with your mortgage and your payment goes back to what it was before you fell behind.

In Broward County, the Chapter 13 trustee, Robin Weiner, is working diligently towards offering a loan modification program within Chapter 13. Due largely to her efforts in bringing the lenders and debtor attorneys together to agree on guidelines that are acceptable to everyone, homeowners will soon be able to apply for HAMP modifications through mediation during the Chapter 13 process. Certain restrictions apply for this program but it's a great opportunity for Chapter 13 filers to speak directly with their lenders and see if they can get their mortgage modified. More on this later.