The bank filed a foreclosure suit, won, took title, and sold the property to an independent third party. Now imagine that you are the third party purchaser – you bought a home from a bank that obtained title via foreclosure. You move into and live in the house you purchased from the bank at a foreclosure auction.  Then suddenly, the original homeowner, who owned the property before the bank foreclosed, has convinced a court that she still owns the property.  Incredibly, in light of the bank’s failure to correctly prosecute the foreclosure lawsuit, the homeowner is right –  she still owns the house.

The problem is created through a break in the chain of mortgage ownership. Until the 1980’s, most mortgages were loans between the homeowner and a bank, who lent the money directly.  More recently, the mortgage financing system transformed into an international system of securitization, with mortgage lenders packaging their loans into securities, bought and sold by investors like stocks. These transactions even split individual mortgages into sections, where each loan could have parts owned by different investment banks.

The transfer of ownership in these mortgage backed securities (MBS) was done with contracts on the balance sheets of Wall Street investment banks, such as Morgan Stanley and Goldman Sachs. The company who originally appeared to make the loan was normally a retail lending company such as Countrywide or Lending Tree, who typically acted as a sales company, and sometimes remained contracted to service the loan.

In the event that the loan goes into foreclosure at a later date, the then-current owner of the loan files the foreclosure and sells the property to a new owner, often at auction. The land records would show a deed of transfer from the investment bank to the new owner. This creates a break in the chain of ownership of the mortgage rights. In many cases, the transfer of ownership of the mortgage loan has gone from the original lender, through several owners, and then to the foreclosing bank, none of which is recorded on the property title history. Technically, the foreclosing bank has no recorded title rights to foreclose in the first place.

MERS announced it changed its procedures to require that an assignment of mortgage be filed prior to the start of any foreclosure suit. Typically, a mortgage is recorded in the public records with MERS as nominee for ABC Corporation. Invariably, when the foreclosure lawsuit is filed, it is not filed in the name of ABC Corporation it is filed in the name of Bank of America, JP Morgan Chase or some securitized trust – an entity with no relationship to ABC Corporation.

In most foreclosure cases, banks’ lawyers argue the plaintiff has standing if it is the “holder” of the Note (i.e. if it possesses the original note with a special endorsement in blank.) Many judges accept this position, no questions asked and thus, an assignment of mortgage is often viewed as irrelevant and superfluous.

Even if Bank of America, JP Morgan Chase, or the securitized trust has standing without an Assignment of Mortgage in the public record, ABC Corporation is still the mortgage holder of record. This means that even if Bank of America, JP Morgan, or whoever prevails in the foreclosure is the high bidder at the auction, acquires title, and sells the property to a third party, ABC Corporation is still the mortgage holder of record. What does that mean? Essentially, the entire foreclosure case was like a wild deed – it took place, but ABC Corporation can still institute a foreclosure lawsuit in its own name, as it would have priority over the bona fide purchaser who acquired title from the bank.

If ABC Corporation is the mortgage holder of record, and it is not named as a party in the mortgage foreclosure suit, and there is no Assignment of Mortgage, then the mortgage in favor of ABC Corporation still exists, even after the foreclosure, even after the auction, and even after the sale to the third party. The foreclosure happened, but as far as ABC Corporation is concerned, the foreclosure is irrelevant – it still has the mortgage.

To sum it all up, when purchasing your next Tampa home, especially in the case of foreclosure, it is very important to seek the advice of a real estate attorney and if possible, purchase title insurance when you purchase a property.

With rates still at their all time low, many clients are interested in refinancing their home, or purchasing a home. The question of what their home is worth comes up almost immediately. It usually becomes a long conversation. Although, I am not an appraiser, I do give a few suggestions to my clients if they are concerned with value:

1)  If you are refinancing it may be a good idea to contact your Realtor that assisted you when you purchased the home. Your agent can provide you with a current updated market analysis.
2)  If you are purchasing a home your lender will require an appraisal, should there be a concern with a value up front, I also suggest having the seller pay for an initial appraisal. Your lender will not be able to use the same appraisal, however your agents can provide this to the lenders appraiser so they have additional information to consider.
3)  Also keep in mind if you are going to your local tax authority website, the market value that is reflected on that site typically is not a true market value of the property.

The best way to go about refinancing or purchasing is to utilize your local Realtors when you are inquiring about the value of your current Tampa home or a new home. We are also here as a lender to assist you with qualifying and determining the perfect and most comfortable financing options available to you.

Have you ever found yourself debating refinancing?  What are some of the questions you would like to see answered by our Mortgage Team?

Grand Central at Kennedy is one of Smith & Associates‘ premier high rises in downtown Tampa located on Kennedy Boulevard between Meridian Avenue and Channelside Drive.  Homeowners can enjoy prime urban living (without the out of this world price tag that normally accompanies) while still feeling right at home.

Some of the luxury amenities Grand Central has to offer are people-friendly pools and expansive sundecks, private cabanas, social greens and outdoor grills, clubhouses, fitness centers, jogging paths, pet walks, 24/7 security, concierge service, and covered parking.   But the great thing about this downtown Tampa location is that internal amenities are not all they have to offer.  Hop on the elevator and within moments, you can enjoy fabulous dining, the Powerhouse Gym, a locally owned dry cleaner, and various professional offices.  According to their blog, Grand Central is always “actively pursuing additional retailers and specialty stores slated for future occupancy, including a large-scale grocer.”  So there is more excitement to come!

Amenities and material greatness is not all you will find ant Grand Central at Kennedy.  They are fully equipped with an amazingly knowledgeable team ready to assist you in finding your next Tampa home.  Let’s meet the Grand Central Sales Team:

Dominique Despointes – After spending five years as the National Sales Manager for Opus Imports, Dominique needed a change. In 2003 he began his career working for The Condo Store selling luxury condos from downtown to the beaches. While working for them, he was the Sales Manager for Several Tarragon Corporation properties all around the Tampa area.  His most recent project Majestic Point Condominiums on Island Estates sold out in four months.

David B. Moyer – David graduated from Saint John Fisher College with Honors.  He joined Smith & Associates Real Estate over 7 years ago, and has closed over 500 homes, including but not limited to, Towers of Channelside, Box Factory, Victory Lofts, Meridian, One Bayshore, Art Center and Christainsted. He explores and constantly broadens his services and experiences through education. He is extremely active in the Downtown Tampa community.

The Grand Central Sales Team is available 7 days a week at 813.226.8735.  These units are selling quickly and have some AMAZING last minute deals going on!  Give them a call or visit http://grandcentralatkennedy.com to see one of these fabulous condos today!

While these ladies may be some of the most fabulous in Tampa Bay, they mean business (with frequent side orders of fun, of course).  The Smith & Associates Title, Inc. is an attorney-operated, full service company dedicated to providing exceptional real estate closings to sellers and purchasers throughout the state of Florida.

According to President, Angie Comas, “Our goal is to ensure that the real estate transaction proceeds flawlessly from opening to closing. This is accomplished by harmonizing our technology with traditional, time tested processing methods. In addition to our highly knowledgeable staff, we offer a level of exceptional customer services that the Smith & Associates customer has come to expect.”

Let’s meet the Smith Title girls that will be closing your next Tampa home:

Angi Comas, President
Angi Comas immigrated from Vietnam and landed directly in South Tampa, where she has resided since 1982.   Angi is almost a “native Tampanian” in that she attended primary schools throughout South Tampa and college at the University of South Florida. After spending three years in law school at Florida State University, she longed to come back to her South Tampa home. Although Tallahassee is a charming city, she missed driving on Bayshore Boulevard and walking around in Hyde Park Village. In 2009, Angi Comas joined Smith & Associates Title.   If Angi is not in the office, you can find her in her closet – organizing it.

Julie Simmons, Closer
Julie (or Ms.  Simmons, as she occasionally likes to be called) relocated to the Tampa Bay area in 2002 from her home-town of Pensacola, to begin her career in the field of title insurance.  Julie now calls St. Petersburg home (blocks away from our Beach Drive location).   Around the office, Julie Simmons can spotted wearing a cardigan sweater and a Smith & Associates name tag – the two most important elements of her signature look.  In addition to her passion for title insurance, Ms. Simmons enjoys running, kayaking, ballroom dancing and spending time with her beloved eight year old boxer, Dirce.

Aureann Whalen, Closer
At the age of fourteen, Aureann began her title insurance career by making microfilm copies for her father, a title insurance examiner, during the summer break.  Aureann’s mother is a title insurance marketing representative and so,  Aureann was destined to be in the title insurance industry. In addition to her extensive experience as a closer in South Florida and in the greater Tampa Bay area, she closed many of the sales transactions for Grand Key in South Tampa.  Aureann speaks fluent Spanish and has a penchant for all things that are sparkly – just like her personality.  When she is not working on closings for all of our agents, Aureann likes to play golf and go to the beach.

Sara Houze, Post- Closer
Sara Houze is a post closer at Smith & Associates Title.  Although her official duties are to handle the files after the closing, Sara is also our  technology expert. Furthermore, she inspires all of us in the office with her environmental consciousness. In our efforts to become a more “green” company, Sara has taught us that almost everything can be recycled, including packaging materials, electronics and even shoes. One of Sara’s favorite pastimes is extreme-couponing – it is amazing what she can do with $100!

Whether you are looking for beautiful ladies, massive amounts of coupons, fashion tips or the most efficient closing of your life, Smith Title is who you need on your side.  Wonder women really do rock stilettos!

Have you recently purchased a Tampa, St Pete or Belleair home?  What kind of experience did you have with the Title company?

After an intense pondering session, I decided on 5 tips to maximizing small spaces.  Here goes nothing:

Be flexible. Don’t define every room to a specific purpose, give purpose to every room!
Be functional. Just because it is called a “walk-in closet”, doesn’t men that’s all its good for.  Make use of every corner and bare walls by adding an art studio or office.
Scale down. Why have a family room AND a sitting room (that no one actually sits in) with TVs in both?  Designate one area for congregating, TV watching and video game playing.  This will maximize family time as well!
Divide it up. Maximize large rooms by dividing them into sections for designated purposes.  Use 3-fold room dividers or fancy curtains to really give it a “room-y” feel. (vintage room divider found on Amazon pictured right)
Bring it outside. If you have a porch, patio or yard, ad a grill, tables, tents and out door games.  You now have the perfect place to entertain!

Still not convinced that small space living is fabulous living?  Need an incentive to decorate a small space?  A website titled Apartment Therapy actually hosts an annual “Small/Cool” Contest (yes, that is the name) for homes under 1,000 SqFt.  The categories are (absolutely adorable) “Teeny-Tiny”, “Tiny”, “Little”, “Small” and “International”.  Thousands of entries are received and there is one Grand Prize winner as well as one finalist picked per category.

This year’s winner was an amazing 460 SQFT, well lit apartment in Brooklyn (pictured thanks to www.apartmenttherapy.com).  This teeny space has been completely maximized, allowing for a section for a bedroom (top left), living room (left), office, kitchen (bottom right) and bathroom.  I am in love!

According to the contest rules “The home can be designed by a professional, weekend hobbyist or design enthusiast” so everyone is invited to participate & the prizes are pretty swell!  Check them out for even more ideas on how to maximize your small space.

Whether you opt for small space living out of necessity or desire, there are so many ways to maximize the area and make it just as fabulous as an over-sized mansion!  Not to mention how green you can be, reducing your carbon footprint by using less emissions to keep a small space functioning.

How have you maximized space in your Tampa Bay home?  Do you have any small space decorating tips?

– Since the company does not have any other lines of businesses, unlike most banks or insurance companies, it can focus all of its resources to residential mortgage financing.
– New Penn Financial has a local operation in the Greater Tampa Bay area with processors, underwriters, managers and regional executives located in our office to provide fast decisions and closing turn times. Smith & Associates Real Estate can now routinely close loans within 21 days or less while our competitors struggle to close loans in 30-45 days!
– Aligning themselves with local experts, they have created a nominated appraisal panel that comprises of the most adept, professional, and knowledgeable appraisers in the area. You never have to lose another deal due to a sub-par or out of area appraiser!
– By working with one of the Smith & Associates/New Penn Financial Mortgage brokers, clients have program options such as Super Jumbo, Asset for Income Qualification, High Debt to Income Qualification, Foreign National, Investors, & Non-Warrantable Condos.

So…What does all of this mean??  More qualified homebuyers achieving the dream of homeownership!

Smith & Associates Real Estate is equipped to assist in the entire home buying experience from the initial search with a Realtor, attaining a lender all the way to having Smith Title at your closing (which we will talk about next week!)  Now to meet our fabulous Mortgage Brokers that make all of this possible:

Bobbie Nader
Smith & Associates’ Tampa Office

With over 20 years experience in the banking Real Estate Industry, consisting of operations, underwriting, closing, marketing, and originating loans, Bobbie Nader is well versed to say the least!  She is a great asset to Smith & Associates and has been recognized as a Top Producer in the field. When asking Bobbie how she feels about her job, she said “I enjoy helping clients with their home financing needs. I love what I do, and meeting wonderful people in the process. I am also excited to work along David Donaldson, my future husband.”

David Donaldson
Smith & Associates’ South Tampa Office

After working with First Union for over 10 years, Dave Donaldson came to Smith & Associates and took over the mortgage department. Not long after, he moved to the Bank of Tampa for 12 years, then eventually ended up partnering with soon to be wife, Bobbie Nader back at Smith. They have happily landed that partnership back where they first met.  A little inside scoop on Dave according to Bobbie, “David loves to cook, plan our vacations (a year in advance!), and spend time with the family.”

Steve Stapleton
Smith & Associates’ Downtown St. Pete Office

Florida licensed mortgage broker, Steve Stapleton has been a loan officer for the past 14 years and is well known throughout the Tampa Bay real estate & lending community as an honest and reputable mortgage banker. Steve has worked hand in hand with his borrowers, lenders, realtors and title companies to make sure all his transactions run smoothly and all those involved are completely satisfied.  He has lived in Tampa Bay area since 1990 & enjoys all the pleasures of the Gulf Coast, including boating, fishing, golfing, and of course…home ownership. He is very active within the community and served four years in the United States Air Force before being honorably discharged as a Senior Airman.

Amanda Stapleton
Smith & Associates’ Belleair Bluffs Office

Amanda L Stapleton is a Licensed Mortgage Broker that has been in the mortgage industry since 2001.  Starting her career as a Mortgage Processor then progressing to Processing Manager and Operations Manager Amanda knows the mortgage process from start to finish.  On her free time you may find her spending time with her husband Steve Stapleton & their dogs or volunteering for the Susan G Komen Race for the Cure!

Whether you are looking for Tampa Real Estate, a new St. Pete home or a Belleair home for sale, Smith & Associates has you covered!

Have you ever worked with our Mortgage team?  Which office did you visit and hat did you think?

Low Credit Woes. Poor scores can cause damage even if a potential home buyer qualifies for a loan.  Borrowers who have low credit scores can end up paying thousands more in increased interest over the term of a mortgage.  Knowing your score and working to build it up over time can save lots of money in the long run.

Superficial Inspections. As a new home buyer, it’s important to be able to keep a tight reign on your finances.  Nothing can be more devastating than being faced with unexpected and expensive repairs after closing.  Make sure a thorough inspection is completed in order to assure your ability to plan repairs and/or upgrades according to your own budget and timeline.

Skipping Contingencies. Talk to your Realtor about adding contingencies to the offer on your new St Petersburg home.  A contingency gives you a potential ‘out’ if the completion of an inspection should return unexpected, deal-breaking results or if financing should for some reason fall through.

Underestimating Insurance. Buyers should be careful about including the cost of homeowner’s insurance when determining whether or not they can afford a property.  Insurance, especially in Florida, can be surprisingly more than one would expect.  To avoid a potential pitfall, be realistic about the numbers.

Overspending Extravaganzas. Lenders continue to check your credit right up until the time you close on your new St Petersburg home – not just when you originally apply for a mortgage.  Be careful about your spending both before and after you apply for a loan.  Too much spending could cause issues with your ability to complete the financing process.

1. Purchasing a home is not an impulse buy. It’s not an item on a shelf in the check out line that can simply be thrown in a bag. This is a commitment not only to the property itself and its surroundings but also to your job and financial situation. If you do not plan on living in the home for a few years, then purchasing may not be the best idea for you.

2. Know where you stand. Recently the banking industry has increased the standards for borrowing money. One important aspect of that is the need to have a high credit score. It is virtually impossible to obtain a loan with poor credit. It may take anywhere from weeks to months to work on improving your score and making sure all facts are correct.

3. Be realistic. Everyone watches HGTV, and other shows that magnify what “real” homes may look like. Not everyone can buy a Ferrari, a helicopter, and a mansion. Focus in on homes that you can afford. For example, focus on Tampa homes for sale that are worth 2.5 x your annual salary. (i.e. $50,000 x 2.5 = $125,000).

4. Programs & Options. Though times have changed, times have not changed so much that you need to put 20% down to obtain a loan. There are still programs that let borrowers put less money down – FHA loans are an example. The FHA program currently allows a 3.5% down payment. There are stipulations that come along with this loan, so make sure you talk to a professional to guide you to the right properties.

5. Work with a professional. There are two important connections you will make when purchasing a home – your Realtor and your mortgage consultant. There is always plenty of information available from friends, family, the internet, magazines, and news outlets, but the reality is that they are not professionals. You deserve to be assisted by the very best people, whose only interest is making you happy.  They can easily assist you in obtaining your financial and lifestyle goals through the purchase of a home. It costs $0 to have a an agent help guide you through the process of finding a home and assist you in performing any related services. The only expectation a real estate agent has is that they will in turn receive loyalty from you.

6. Know your zone. School zones are important to home buyers. It is always a good idea to buy in good school areas – whether or not you have children of your own.  Though it may not be important to you, it may be important to potential buyers when it is your turn to sell the property.

7. Get pre-approved. This goes along with step 5. It is very important to know exactly what you can purchase – which includes everything from the monthly mortgage payments to insurance, taxes, and HOA fees that will all factor in to your decision of which home to purchase. Understanding your budget is the key to being happy with your house in the future.

8. Be realistic with your offers. Ask your realtor for a Comparative Market Analysis (CMA) of properties which have sold nearby near-by to learn the trends. If other Tampa homes for sale in the area have sold for 5% under the asking price, you may want to offer 10% lower then the asking price. If one of the other sold properties is in line with the asking price or higher, this is an indication that the property is ready to sell. Homes that fit this description do not stay on the market for long – unless the sale is being dragged out by a situation like a lengthy short sale process.

9. Get Inspected. After you’ve found the perfect house and have an accepted offer the next step is getting an inspection. The bank will request an appraisal to determine the value of the home in order to make sure that the offer on the property is consistent with the property’s actual market value.  This allows for the bank to feel confident in the loan. The home inspection is completed entirely for you, the buyer, to feel confident in the home.  It allows for any potential issues to be outlined which may need to be addresses prior to closing and also to make you aware of any possible future repairs which may be needed based on the state of the home.  An inspector, for example can let you know that while the roof is structurally sound currently, it may need to be replaced within 3 years. The idea is to protect yourself from potential problems which may result in the need for expensive repairs down the road.

Now that you’re up to speed on ‘Buying A Home 101′ you’re well on your way to beginning the steps of home ownership!

There are two forms of the Federal Tax Credit: the $8k and $6.5k.  We’ll use some sample scenarios involving a St Pete Beach home to help illustrate.

The first option:

Let’s start with the $8k option. This is a tax credit for FIRST-TIME BUYERS ONLY. However, the way the IRS defines “first-time buyers” is this: “a buyer who has not owned a principal residence during the three-year period prior to the purchase.” This means that if you have owned before, but not in the last three years, you are again a first-time buyer. The credit amount is 10% of the total cost of the home, up to $8,000, and it only applies to homes that are less than $800k. This offer began January 1st, 2009 and will expire April 30th, 2010.

For example - A sample of the simplest scenario.  You’ve been renting for years and have finally decided to take the plunge – now is the time to buy!  You’ve found a fantastic St Pete Beach home in the form of a condo on Gulf Boulevard.  Your offer has been accepted and you’re under contract to close on April 5th for $249,000.  You qualify!

Another example – You owned your St Pete Beach home until 2005, when it was sold due to your relocation.  Upon relocating, you rented for a few years instead of purchasing.  Now back in the area, you’ve found a great opportunity to purchase a waterfront property in Yacht Club Estates.  The contract has been finalized and you’re closing on April 19th at $699,000.  You qualify!

The second option:

The other form of Federal Tax Credit is the $6.5k. This credit applies to those who currently own a home, and have lived in that home as a primary residence for at least 5 of the last 8 years. Like the $8k form of credit, it also only applies to houses which cost less than $800k, and is calculated as being 10% of that total cost. The only difference is the ceiling on this policy is $6,500. This offer began November 6th, 2009, and will expire April 20th, 2010.

For example - You purchased your St Pete beach home in 2001.  It was your primary residence from 2001 to 2004, when you purchased another property in Old Northeast which then became your primary residence.  Ownership of the residence in St Pete Beach was maintained while it was rented for a few years.  In 2006, you moved back into the beach home as your primary residence.  You’ve now found a fantastic new opportunity to purchase the home of your dreams on Snell Isle which you have under contract to close on April 12th at $725,00.  Despite the fact that you currently own a home, you still qualify!

In order to claim this credit, make sure you do so when filing your income tax returns. Both the $8k and $6.5k versions of the credit require IRS Form 5405, which will aid in determining the amount of tax credit to be received. In order to be eligible the property must close before July 1st.

“What do I want in a home?”

This is a great question to ask. Unfortunately it presupposes an idealistic reality where you can afford whatever house you see, and unless you’re the aforementioned lottery winner that’s probably not going to be the case. Asking this question first will leave most buyers with a sense of hopeless negativism, which leads to a defeatist remorse and ultimately settling on a house rather than finding the house they really want. Buying a home should be exciting, but don’t overwhelm your senses. Everyone wants the house on the beach, or the manor on the hill, and it’s beautiful to always have those goals, but for now let’s plant ourselves in reality.

“How much can I afford on a house?”

Hey, good question! There are plenty of houses you can afford which will live up to your dreams. You’re going to want to figure out how much you can save over X amount of time. Set a goal and do some simple math. How much can you have saved after six months? How about after a year? This will help you figure out how much of a down payment you can put together (most lenders require 20% down) for your new St Petersburg home, or house in Tampa. These first numbers will help you yield a budget for monthly mortgage, but also for your utilities and other living expenses. Over estimate these numbers to be safe.

“Okay, I have my budget… now what?”

With these numbers in mind start thinking about where you might want to live. Google is the most efficient way to find anything these days, so start there. Try searches like “St Petersburg home” or “Tampa homes for sale”. From here you will find a catalogue of houses and communities that display details and price ranges on individual properties. You’ll want to get in touch with a realtor and find out when you can take a tour of the some of the houses.

“What do I look for when I’m on a tour?”

First you have to develop a rating system. It can be a scale of 1 to 10, 1 to 5, or whichever suits your particular ability to scrutinize and note differences honestly. Give each home an overall score based on your system. You will also want to take plenty of pictures and take notes. Since these notes are based on your vision they can encompass any aspect of the property you’d like to remember later. But there are a few points you will always want to be mindful of: 1) Neighboring areas, 2) Sunlight or lack thereof, 3) overall feel of the area. With these criteria, your notes, pictures, and rating system you will have the information enough to make a wise decision. Also, remember that your rating system is probably the most honest of these factors since it is based on your overall opinion of a particular property.

“Where do I look?”

While great properties for first time home buyers can be found in nearly all the fantastic communities that the Tampa Bay area has to offer, here are some suggestions for areas to start looking.  For more information of these neighborhoods, just click on the community name.

Tampa area:

• Seminole Heights
• Tampa Heights
• Carrollwood
• Westchase
• Temple Terrace

St Pete area:

• Old Northeast
• Crescent Heights
• Pasadena
• Seminole
• Crescent Lake