According to an article in the South Florida Business Journal, Florida is tied with Georgia and Illinois for having the most banks in the nation with major capital shortfalls according to a study by The Street.com ratings and SNL Financial.
Where lenders and banks are under capitalized, borrowers have greater opportunities to cut deals with lenders on upside down properties. There are many reasons why undercapitalized banks and lenders present better opportunities for borrowers to cut deals.
First, undercapitalized lenders often do not have sufficient staff or resources to participate in highly structured loan workout programs. In other words, undercapitalized lenders often have more flexibility to consider a wider range of loan workout proposals.
Second, because there is often less formal internal structure, undercapitalized lenders may be more likely to take the borrowers individual circumstances into account when making loan resolution decisions.
Third, Florida foreclosure defense attorneys have an easier time defending foreclosure suits by lenders or banks that have been taken over by the Federal Deposit Insurance Corporation (“FDIC”), the Office of Thrift Supervision (“OTS”), or by another bank in lieu of government takeover. Initially, after a loan is transferred to a new owner/entity, it often takes several months for the new owner/entity to get up to speed on the loan or foreclosure status. Secondarily, after such an acquisition, the risk profile of the assets [loans] should shift in the direction of market value. In other words, if a new entity owns the loan, it should have acquired the loan at a significant discount, giving the new/current owner of the loan more flexibility to cut a deal with the borrower to resolve a contested foreclosure. Finally, Florida foreclosure defense attorneys have an easier time defending foreclosure suits where the loan has changed hands one or more times. Where a loan has changed hands several times, discovery becomes more complex, assignments may be missing, original documents could be lost, authority to foreclose may become unclear.
Therefore, the banks pain becomes the borrower’s gain.
Defending a foreclosure suit can provide not only legal leverage but also time to get a loan modification, to conduct a short sale or to avoid a deficiency.Learn More
A deficiency judgment can last up to 20-years unless paid or otherwise resolved. A deficiency judgment can be a lien on all non-homestead real estate and other assets.Learn More
Even if you perfectly “qualify” the lender does not have to modify your particular loan. Lenders cannot modify everyone’s loan; it’s simply not economically feasible.Learn More
Short Sale Consulting
Castle Law Group helps clients decide if a short sale is right for them by explaining the risks and potential rewards relative to our clients’ unique financial situation.Learn More
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