Affirmative Defenses to Foreclosure Lawsuits in Florida

Below the Florida Rules of Municipal Procedure, a plaintiff trying to get a judgment of foreclosure is required to attach a copy in the Note to its complaint. A Florida home owner who is served using a foreclosure complaint without a a copy with the Note should assert this being a defense. This may stop the foreclosure action until the lender can supply a copy in the note. In home foreclosure actions, any delay in the proceedings can be beneficial given it gives the homeowner a further opportunity to find alternatives to foreclosure, including a quick sale or loan change.

In virtually all circumstances, it is necessary for a homeowner to file an alternative when served with some sort of foreclosure summons and complaint. Failing to answer a foreclosure complaint may trigger the forfeiture of the legal defenses that are described above.
As an FHA approved the property market appraiser, I am particularly considering serving retirees and the elderly. As a Central Florida native that’s now into my 60s myself, I understand what both baby boomers and retirees have in mind by way of real-estate. What concerns me however are most of the terms lenders are providing the unsuspecting elderly on reverse mortgages, wherein they basically signal away their homes to live on in their other years.

Don’t get me wrong, a reverse mortgage can be a useful means by which to finance your last years, but take the precautions to learn the contract thoroughly and get your home assessed accurately lest you deplete the maximum amount of money you could easily get from that reverse house loan.

Retirement towns throughout Central Florida like: The Villages, The Plantation in Leesburg, Kings Form in Clermont, Royal Highlands in Leesburg, Highland Lakes, and Legacy of Leesburg are becoming increasingly predominant throughout the market.

One thing these communities are doing heavily is reverse mortgage loans and refinancing. The department of Homes and Urban Development (HUD) has some extremely helpful information about reverse mortgage loans, which retirees and seniors would do well to take into account. Get an honest together with fair market value appraisal of your home before you allow a lender to position a reverse mortgage into it and deplete your life savings.

As per HUD, reverse mortgages increasingly becoming popular in America. Reverse mortgages really are a special type of home loan that lets a home owner convert the equity with his/her home into bucks. They can give older Americans greater financial protection to supplement social security, meet unexpected medical expenses, make home improvements, plus more.

If you are interested in a reverse mortgage, beware of scam artists that charge thousands of dollars for information freely due to HUD.

Reverse mortgages increasingly becoming popular in America. HUD’s Federal Housing Supervision (FHA) created one of many first. The Home Equity Conversion Mortgage (HECM) is usually FHA’s reverse mortgage program which allows you to withdraw some of the equity in your home. The HECM is a safe plan that will give older Americans greater financial security. Many seniors do it to supplement social protection, meet unexpected medical expenses, make home improvements plus more.

1. What exactly reverse mortgage?

A reverse mortgage can be a special type of home loan that lets you convert a portion of the equity on your property into cash. florida mortgage rates

FHA Reverse Mortgages for People Older Than 62

If you are age 62 or older you may want to participate in FHA’s Home Equity Conversion Mortgage (HECM), better known as the Reverse Mortgage, program.

To qualify for a Reverse Mortgage you must be a homeowner that has paid off your mortgage or paid it down by a considerable amount and are currently living in the home.

With this program you can choose the way you want to withdraw your funds. You can choose to receive them in a fixed monthly amount or a line of credit or a combination of both.

How the FHA Reverse Mortgage Program Works
There are many things for you to consider before deciding a Reverse Mortgage is the right course of action for you. To help in this process the FHA requires you to meet with a Reserve Mortgage counselor of your choosing.

This counselor will discuss Reverse Mortgage financial implications, eligibility requirements and alternatives to a Reverse Mortgage. They will also discuss how to repaying this loan and what happens when the Reverse Mortgage becomes due and payable.

Upon the completion of this counseling session you should be able to make an informed decision regarding whether a Reverse Mortgage will meet your specific needs. You can search online for a HECM or Reverse Mortgage counselor or call toll-free (800) 569-4287 to locate one.

You must also meet certain borrower and property eligibility requirements. You can use the information below or a reverse mortgage calculator, readily found online, to make sure you qualify.

If you meet the eligibility requirements you can complete a reverse mortgage application through any FHA-approved lender. Almost any institution that offers mortgages will be FHA approved. You can do an online search for a FHA approved lender or ask the HECM counselor to provide you with a list. After you choose a lender they will discuss all the requirements of the Reverse Mortgage program, the loan approval process, and the repayment terms with you. If they will not do this then you picked the wrong lender. Do more research and then choose another mortgage source!

Borrower Requirements
Be at least 62 years of age
Own the property free and clear or have a considerable amount of equity
Live on the property and it must be your principal residence
You cant be be delinquent on any federal debt
Attend a consumer information session presented by a HUD approved HECM or Reverse Mortgage counselor

Property Requirements
A single family home or
A 2 to 4 unit complex and one unit must be occupied by the borrower or
A HUD approved condominium community or
A manufactured or mobile home that meets all FHA requirements
Financial Requirements
Income, assets, monthly living expenses, credit history, payments of real estate taxes and insurance premiums may be verified.
You can select from five payment plans:
Tenure – equal monthly payments to you as long as one borrower lives and continues to occupy the property as their principal residence.
Term – equal monthly payments to you for a fixed period of months.
Line of Credit unscheduled payments or installments to you, at times and in an amount of your choosing, until the line of credit is exhausted.
Modified Tenure – combination of line of credit and scheduled monthly payments to you for as long as one borrower lives and continues to occupy the property as their principal residence.
Modified Term – combination of line of credit plus monthly payments to you for a fixed period of months selected by you.
You can change your payment plan at any time for $20.00
What Your Mortgage Amount is Based On
The age of the youngest borrower
The current interest rate
The appraised value or the FHA Reverse Mortgage limit of $625,500 or the sales price whichever is less.

As a general rule the more valuable your home is, the older you are, and the lower the interest rate is, the more you can borrow. If there is more than one borrower, the age of the youngest borrower is used to determine the amount you can borrow.
For an estimate of your Reverse Mortgage cash benefits, go to the HECM Home Page,, and select the online calculator.

Reverse Mortgage Costs
You can pay most of the costs of a Reverse Mortgage by financing them. This means that you can have them paid from the proceeds of the loan and not with cash from out of your pocket. On the other hand, financing the costs reduces the net loan amount available to you.

A Reverse Mortgage can incur several fees and charges including mortgage insurance premiums (initial and annual), any third party charges, origination fees, interest and servicing fees. The lender will discuss these fees and charges with you prior to closing your loan.

You will be charged an initial mortgage insurance premium at closing. The premium will be either 2% for the Standard insurance program or the 1% for the Saver insurance program. These insurance programs are based on the appraised value of your home, the FHA HECM mortgage limit of $625,500 or the sales price whichever is lower. Over the life of the loan, you will also be charged an annual mortgage insurance premium that equals 1.25% of your mortgage balance.

Mortgage Insurance Premium
One of the costs you will incur with a FHA reverse mortgage is a mortgage insurance premium. This pays for the mortgage insurance which guarantees that you will receive expected loan advances by guaranteeing the reverse mortgage with the lender. You can finance the mortgage insurance premium as part of your loan but it will reduced the net amount of cash that you can receive.

Third Party Charges
Closing costs incurred from third parties can include the appraisal fee, costs of the title search, insurance premiums, charges for any needed surveys, inspections charges, recording fees, mortgage taxes and the cost of an credit checks. Other fees may be incurred as deemed appropriate.

Origination Fee
Another fee you will pay is an origination fee. This compensates the lender for processing your Reverse Mortgage. A lender can charge a Reverse Mortgage origination fee of up to $2,500 if your home is valued at less than $125,000. If your home is valued at more than $125,000 the lender can charge 2% of the first $200,000 of your home’s value plus 1% of the amount over $200,000. Reverse Mortgage origination fees are capped at $6,000. These fees are usually negotiable between you and the lender.

Interest Rate
You can choose a fixed rate or an adjustable interest rate loan. If you choose an adjustable interest rate, you can choose to have the interest rate adjust monthly or annually.
Lenders may not move annually adjusted Reverse Mortgage by more than 2 percentage points per year and not by more than 5 total percentage points over the life of the loan. FHA does not require interest rate caps on monthly adjusted Reverse Mortgage.

Servicing Fee
Lenders or their agents provide servicing throughout the life of the Reverse Mortgage. Servicing the loan includes sending you account statements, disbursing loan proceeds and making certain that you keep up with loan requirements such as paying real estate taxes and hazard insurance premium. Lenders may charge a monthly servicing fee of no more than $30.00 if the loan has an annually adjusting interest rate and $35.00 if the interest rate adjusts monthly. At loan origination, the lender sets aside the servicing fee and deducts the fee from your available funds. Each month your loan is in effect the monthly servicing fee is added to your loan balance.

FHA rules are subject to change. These were the guidelines at the time this article was written February 5, 2012. Please check with the applicable agent or agency to ensure that they are still current before making any buying decisions.

Fha Streamline 203k – The Basics

One of the most exciting opportunities today for loan officers and real estate agents alike is the opportunity to sell off the glut of foreclosed homes on the market. A big problem with these potential deals is that most people who are losing their home because they can’t make the payments usually lack the money for routine maintenance as well. Once foreclosed upon, those homes hit the market needing some serious sprucing up.

In 2005 HUD came up with a new FHA insured mortgage program they called the “Streamline (K)” Limited Repair Program. The Streamline 203k loan permits homebuyers and those refinancing to borrow up to an additional $35,000 into their mortgage to improve or upgrade their home.

Most loan officers go looking for a special set of guidelines for Streamline 203k loans. There are some specialized guidelines and loan to value rules, but the key thing to remember is that all standard FHA underwriting guides apply just the same way they for any regular FHA loans when it comes to credit, income and asset documentation. This includes decisions reached by both automated underwriting systems and manual underwrites.

Here are the general criteria for a deal to qualify for Streamline 203k:

* May be used for purchase or refinance of one-to-four (single family) residences, including HUD REO properties

* May be either fixed or adjustable rate mortgages

* Combines the funds to purchase or refinance (pay off existing liens) along with the funds needed to repair/rehabilitate the property.
Repairs are completed after closing. (NOTE: A 203K cannot be a Cash-Out Refinance. All money must go to repairs.)

* One closing, with rehabilitation funds escrowed and disbursed as the work is satisfactorily completed

* Can be used to update homes, correct health and safety issues, pay for higher cost items such as a roof, etc.

* Property value must be sufficient to purchase/refinance and complete the rehabilitation

* Property must be 100% complete or equivalent document and must be at least one (1) year old.
(EXCEPTION: Presidentially declared disaster areas for one (1) year after the disaster)

* Borrower and credit eligibility same as for other programs (No Investors, including REO sales)

Here are a few additional aspects of the Streamline 203k:

* No minimum borrowing threshold, but there is a maximum of $35,000, which most lender require to include at least a 10% contingency fund

* Appraisal is completed as “Subject To Repairs”

* A minimum 10% Contingency Fund is required

* Unlike regular 203k’s no consultant and plan is required

* No general contractor is required

* The lender is responsible for ensuring that the repair cost is reasonable and customary for the area in which the property is located

* No preparation of architectural exhibits (as required in HUD Handbook 4240.4 REV-2, Paragraph 3 – 2) is necessary

* Streamline 203k helps address the repair issues that are often delaying or preventing sales and refinancing

Obviously there will be some differences between regular FHA and streamline 203k when the time comes to calculate the maximum mortgage amount.

Here is how the maximum Streamline 203k mortgage amount is calculated:

The mortgage amount can be the lesser of:

A. The maximum (statutory) mortgage limit for area

B. The “As is” value (usually the purchase price or outstanding debt in case of a refinance transaction) plus cost of rehabilitation

C. 110% of “After Improved” value; Condominiums are limited to 100% of “After Improved” value.

D. If the borrower has owned the property for less than one year, the acquisition cost is the maximum.

Only a handful of lenders are accepting loans under the full FHA 203k guidelines, but many FHA lenders are offering the streamline version.

Its Important For Your Condominium Community To Be Hudfha Approved

The Feds changed the game.

You now need to be HUD and FHA approved before your condominium community can offer FHA loans to your buyers. Once your complex is approved you must be recertified every 2 years.

If your condo community is not HUD/FHA approved you are missing out on a lot of buyers.

For people who can’t qualify for conventional loans the FHA loan program is the answer.

According to DQ News in April 2011 – 33.4% of the purchase mortgages used in 20 of the largest metro areas were FHA-Insured and the November 2010 Realtors Confidence Index reported that Nationally 39 percent of recent buyers purchased a home with FHA-insured loans.

If your condominium community is not FHA approved you are missing out on a lot of potential buyers. This will also affect current homeowners when they go to sell their unit.

For many first time home buyers qualifying for a conventional loan isnt possible. Through the FHA there are programs that make it feasible for these people to get affordable financing.

The Benefits of the FHA Loan Program

– A low down payment

The FHA program lets buyers put as little as 3.5% of the purchase price down. As you can imagine this opens many doors for people that wouldnt otherwise be able to come up with a conventional down payment.

– Help with closing costs

Qualified applicants can also receive up to 6% towards closing costs. This further reduces the loan and down payment amount.

– Co-Signer requirements

Another part of the program allows for a blood relative to co-sign. What makes this program different is that if the home-buyers dont have enough credit to qualify on their own a blood relative can co-sign without needing to reside in the home that is being purchased.

With the help of those benefits people with little credit, low and moderate incomes and first time home buyers have more opportunities to find affordable housing.

These types of people make up a large part of those buying homes. First time home buyers are usually those that are less qualified for conventional loans. Without being HUD approved your condo community will not be able to provide affordable financing from the FHA.

Recently HUD made drastic changes to their condo approval program. These changes jeopardize the availability of FHA loans for condominiums.

HUD Changes:

– Elimination of spot approvals
– Mandatory recertification for projects approved prior to October 2009
– Re-certification every 2 years

The elimination of spot approval can cause major concern and problems for your condominium community. Spot approvals gave every condo community a way to assist people requiring FHA programs. Loans were decided on an as needed basis.

If you were relying on spot approvals to obtain financing for those homebuyers that need FHA assistance that option is no longer available. You will not be able to get FHA help to purchase a home within your community.

Now full HUD approval is required for anyone wanting to use the FHA loan program.

If your condominiums need to be certified or recertified now is the time to do it. It is anticipated that there will be a boatload of applications to HUD for FHA approval over the next few months so get yours in now. First come – first served.

To see if your condominium complex is HUD/FHA approved go to

To view HUD Mortgagee Letter 2009-46 B regarding condos approval go here

For a Condominium Project Approval and Processing Guide go here