Submitted by Luis from Miramar FL

Q: I bought a condo in Miramar FL in 2006, the condo assoc. owes $500,000.00 to several creditors as a consequence of the high volume of foreclosures, approx 30% of 300 units. The condo. monthly cash flow is negative and is proposing a special assesment to cover the $500,000; and according to the present budget the there will be additional $300,000 to $500,000 bad debts this year 2009. What happens when a condo. assoc is insolvent or is bankrupt?

Answered 04/28/09 15:18:47 by Monica Hatcher

A: Luis: I don't know the answer to your question, off the bat. The situation in your building sounds pretty grim. Would you mind shooting me an email with your contact info so I can talk to you about it in greater detail? I'll also make some calls on your question. Best, Monica Mhatcher@MiamiHerald.com

Submitted by Nicole from Pembroke Pines, FL

Q: I want to take advantage of this buyer's market, but before I get laughed out of a bank, is the 20% down for a mortgage still 'standard'? I know I can do 10% plus closing costs, but 20% is a stretch.

Answered 04/28/09 15:16:37 by Monica Hatcher

A: Hi Nicole, sorry for the delay in responding. For most lenders at this point, yes, 20 percent down is the standard down payment requirement. That's a steep climb for many people. There is hope though. Ask your bank about its FHA program. These loans, insured by the federal government, require only 3.5 percent down and have become the mortgage of choice for buyers in today's market for that reason. The catch is you have to pay mortgage insurance. That's how the federal government covers its cost when some borrowers default. Depending on how much you put down, your insurance may not be that much. And, you only have to carry it for a certain number of years or until you meet a certain equity threshold. Your bank can tell you more.

Submitted by MARY from DORCHESTER MASS

Q: IF A LENDER REFI THE FIRST , THEN WHAT HAS TO HAPPEN TO THE SECOND, MY LENDER WILL MODIFY SECOND , BUT NOT FIRST THEY SAID I COULD REFI UNDER OBAMA PROGRAM, SO IF WONT MODIFY FIRST BUT WILL REFI , EXPLAIN TO ME SAID I WAS ELIGIBLE FOR HOPE FOR HOMEOWNERS ALSO, AND WHY WOULD A LENDER TAKE SIX MONTHS OF PAYMENTS OFF THE HISTORY OF EACH OF MY LOANS STARTING FROM THE FIRST SIX MONTHS

Answered 04/28/09 15:07:18 by Monica Hatcher

A: Hello, Mary, sorry for the delay responding to you. Well, today (Tuesday, 28) The Obama administration announced a new component to the Making Home Affordable loan modification program in which lenders will be asked to also reduce the interest payments on second mortgages. The guidelines, as submitted to the lenders, are pretty complex, but, basically, they are now supposed to automatically include the second in the modification. I'm not entirely clear what you mean in your note - but if your lender is telling you that you qualify for a Hope for Homeowners, that is separate from a loan modification. Hope for Homeowners is a refi program in which a lender agrees to reduce the interest and some of the principal as well. There is only one known refi at this point under Hope for Homeowners. The program, by all accounts, has been a total failure and Congress is now looking at legislation to fix it. I'm sorry not to be of much help here, but I would contact your lender again and see what can be done under the new guidelines announced today. Here's a copy of them, for your information: http://www.treas.gov/press/releases/tg108.htm

Submitted by Judy from Miramar, FL

Q: I own several properties which are up to date on payments, in fact, never late on payments, however, the houses have an ARM which matures next year, will I be able to refinance into getting a fixed rate, these are investment properties. Or, what is available for someone in my position with these investment houses with ARM mortgages and no income to qualify, they were bought with high credit scores with 5% down.

Answered 03/10/09 13:25:18 by Monica Hatcher

A: Dear Judy: The refinance and loan modification parts of the Obama home rescue plan do not extend to investor-owned properties. That was very clear in the guidelines. However, there's no reason why you cannot attempt negotiations with your lender, since they are not prohibited from helping investors. If you have a good payment record and can demonstrate that you will not be able to make the adjusted payments, they may agree to work with you. Definitely, definitely give it a try. Really, these banks can't afford a single default more - use that to your advantage. They may be willing to work with responsible investors like you. Best, Monica

Submitted by judy from orlando

Q: I have an attorney handling a loan mod for me. The bank said it will take 30 days to assign someone to my case. My attorney said I definitely will get a loan mod but the bank says they can still start the foreclosure proceedings. Why are the banks doing this when you are in the process?

Answered 03/09/09 12:05:15 by Monica Hatcher

A: Judy: How does your attorney know you will definitely get a loan modification? That would seem something only the bank could guarantee. It seems to me that your lender is proceeding with foreclosure because they haven’t yet reviewed your file and don’t know whether you will qualify. Also, lenders are bound by servicing contracts with the investors who own the loans. It could be that they are required by these agreements to file foreclosure until a new payment plan has been reached with a borrower. Foreclosures are, some have said, taking up to 18 months in some Florida counties because of the heavy volume. While the bank may initiate the foreclosure to save time in the event you do not qualify, I wouldn’t worry about it. If you get a loan modification, the process will stop. Further, the bank won’t sell your home and evict you while you are in the midst of a loan workout. Kind regards, Monica

Submitted by Angie from Miami, FL

Q: I bought my condo in 2005 by all of the old rules: 20% down, 30 year conventional mortgage. I am no where near foreclosure, thank God, and could not justify to "fake it" to get any modifications. Is there anything being done for those of us who played by the rules but are now down 40% or more of the value of their homes??? The condo was valued at $165000, & I would be LUCKY (with all the new rules) to sell at $100000.

Answered 03/05/09 13:26:25 by Monica Hatcher

A: Hi Angie, nope, nothing for you, unless you fall behind on your payments OR are in immediate danger of falling behind. The Obama refinance plan helps only those with loan-to- value ratios of between 80 percent to 105 percent. Otherwise, though, homeowners on the brink of delinquency could try to qualify for a loan modification - but this might be hard to do since investors who own their loans would have to sign off. Usually, they don't allow servicers (this would be the company you pay every month) to modify loan terms unless a borrower is behind enough to enter foreclosure. The Obama plan does not require them to help current borrowers that are horribly upside down - as is the case with many homeowners in our market - but offers financial incentives to those that do. Could you give me a call to discuss, 305-376-3424. I'm working on a story about this issue. Kind regards, Monica

Submitted by Rosa from Miami, FL

Q: Hi. Do you know if self employed individuals qualify for a Loan modification? My husband and I are both self-employed and do not have regular paystubs to submit. We spoke to our lender but they just keep asking for last paystubs.

Answered 03/05/09 13:12:51 by Monica Hatcher

A: Hello, Rosa: That's a good question. Is there not some other way you can document your income? Has your lender not asked for your tax returns?

Submitted by Berri Wells from Laurel MD

Q: Ms. Hatcher thank you for your article. I do no live in Florida, but I am encouraged! Briefly, as a borrower can I approach Fannie Mae directly re: refinancing? Secondly, what suggestions do you have for approaching lenders directly? I need reductions in rate and or principle to more affordable note. I am not making much headway with the loan modification and the lender.

Answered 02/19/09 18:50:37 by Monica Hatcher

A: Hi Berri: First, you'll need to check with your lender to find out whether your loan is backed by Fannie or Freddie. Since the plan is still being hammered out, it might be best to do this after March 4. On the refinance/modification issue, ask your lender to direct you to their loss mitigation department. If you are in danger of becoming delinquent, the new housing plan encourages lenders with incentives to modify your loan before you fall behind. This could be difficult, some experts have said, because lenders are bound by contracts with their investors as to when they can change the loan terms. Normally, they can't modify a loan until a borrower is significantly behind. But it's worth a try. If, as it seems, you've already attempted to resolve the issue with your lender, you might seek out a nonprofit. Check HUD for a certified organization. They have mediators that are skilled and equipped to negotiate on your behalf. Again, though, you may want to wait until after March 4th to see how this Obama plan unfolds. Best wishes, Monica

Submitted by rey from miami, fl

Q: I would like to know if the income levels are Before or After taxes.

Answered 02/19/09 17:09:17 by Monica Hatcher

A: Rey, usually it's gross income, so that's before income taxes.

Submitted by Richard from Miami, Florida

Q: The new bailout plan has a big gap: it appears to leave out helping those with a second mortgage. Thus, if your second is the one dragging you down, making you maybe go into foreclosure, nothing in the bill will help you. The plan only looks at ways to help modify first mortgages. Correct? Thus, if they reduce your first to a small interest and monthly, but your second (home equity or fixed) is the problem, tough luck - obama's plan will not help. Correct?

Answered 02/19/09 14:09:15 by Monica Hatcher

A: Richard, you appear to be correct. And, by refinancing the first mortgage, you also have to get the lender on your second to agree again to its second lien position. During the housing boom, many new buyers got so-called piggyback loans that consisted of a first loan of generally 80 percent of the home's value and a second loan for the remaining 20 percent. Obama's plan allows for homeowners whose first mortgages are no more than 105 percent of the current market value of the home to refinance at today's interest rates, thereby lifting at least some of the burden. For folks having trouble with home equity credit lines and second mortgages alone, there doesn't seem to be much for them. However, we should wait until March 4th when more details will be released. Maybe some of these issues will be addressed.

Submitted by Stan from Miami, Florida

Q: Fannie Mae just put a restriction on loans on mortgages for Florida condos that have 15% or more units 30 days delinquent on association fees. That means that no other unit owner can sell his/her apartment. That locks everyone else up for years to come! Do leans do anything for the condo to collect the money owed?

Answered 01/27/09 14:28:43 by Monica Hatcher

A: Stan: First, I should clarify that the restriction you cite, in fact, applies to new and established condos nationwide. The story, which ran Saturday, incorrectly stated it applied only to Florida. However, you are right that the new rule could make it harder to sell your unit because it will be much harder for buyers to get financing. Banks are still making loans on new condos, but they are requiring down payments of up to 40 percent. Regarding your question on liens, it is one way associations seek to recoup unpaid dues. They can also foreclose on the units with delinquencies.

Submitted by Ann Rawcliffe from Miami, FL

Q: Can a husband/wife/ relative serve of the same board of directors for a homeowner's association?

Answered 01/27/09 13:01:56 by Monica Hatcher

A: Ann: Ken Direktor, who heads the community association practice group for law firm Becker & Poliakoff and knows this stuff like the back of his hand, told me that there is no such restriction for HOAs. However, a change to the Condo Act passed by the Florida legislature last year does prohibit co-owners of a single property from serving together on a condo association board if their names appear on a unit’s title. When lawmakers meet in the upcoming legislative session in March, they may change that, though. Direktor said there’s a proposed amendment to the law that would allow co-owners to serve together if they own more than one unit in the building.

Submitted by Cesar from 33186

Q: Do you think that interest rates will get any lower with this new Federal administration and if so for how much longer?

Answered 01/27/09 12:47:05 by Monica Hatcher

A: Hi Cesar: That's an answer question many would-be buyers would like to know. I asked a source of mine, Grant Stern, who owns Morningside Mortgage Corp. Miami, who said the answer is MAYBE. Even though the federal funds rate, which is the rate banks lend to one another is nearly 0 percent, Freddie Mac reported this week that the interest rates on a 30-year, fixed-rate loan is 5.12 percent. Why? RISK. Lenders are charging higher-than-normal risk premiums on loans because they fear losing more money on foreclosures. Stern said this means there is room for mortgage rates to drop, but lenders have to cooperate. The Obama administration could conceivably require certain concessions from lenders if they ask to receive bailout money. The president has indicated he wants lenders to do far more to help keep homeowners out of foreclosure, for instance. So, we’ll have to see what he does.

Submitted by Jim Alvarez from Boynton Beach, FL

Q: I have an interest-only mortgage that will start adjusting at the end of the year. The house is worth about $100,000 less than the mortgage now due to prices falling. How can I switch to a regular fixed mortgage, and will I have to lay out a large sum of cash to do so?

Answered 01/27/09 11:55:24 by Monica Hatcher

A: Yes, you'll have to come up with the difference between your current mortgage and your home's market value to refinance, which may be hard to do - well, for most people, anyway. Lenders are modifying many loans into fixed-rated mortgages in an effort to keep people out of foreclosure. The catch is that, in most cases, lenders are only willing to do that if a borrower has missed several payments. If you don't think you'll be able to make the adjusted payments later this year, reach out to your lender now by calling their loss mitigation department. Or, you can contact a nonprofit that can guide you through the process. Try the HUD hotline for a counseling center nearest you: 1-877-HUD-1515