South Florida law blogger and foreclosure attorney Roy Oppenheim strongly opposed the deal, which is being sought by state Attorneys General including Florida’s Pam Bondi, in a recent FOX newspiece. Now New York Times columnist Gretchen Morgensen has backed up Oppenheim’s assertion that the deal, in its current proposed form, is not worth the potential relief that it might provide to homeowners.

Oppenheim called the reported $20-25 billion dollars in principal that homeowners would be forgiven for “a drop in the bucket” and now Morgensen reports that deal would only cost the banks between 3.5 and 5 billion dollars in actual cash, to be paid by about a dozen or so institutions. The rest of the banks’ penalties would come in the form of credits.

While HUD secretary Shaun Donovan insisted in the Times article that the settlement will hold banks accountable, both Morgensen and Oppenheim remain unconvinced. Oppenheim told FOX the deal isn’t worth a “deal with the devil”, and that it robs homeowners of the chance to bring legal action against the banks.

And will it really provide the relief homeowners are seeking?? The Times piece points to a 2008 settlement involving Countrywide Financial that promised $8.7 billion in relief to borrowers in Illinois and California that failed to deliver anything close to that. And California is one of several states that has backed out of this current negotiation.

It’s also worth noting that not all troubled mortgages would be covered under this proposed settlement, according to Morgensen. People with loans from Freddie Mac and Fannie Mae would not be able to get their principals reduced, leaving many homeowners out of luck. Only privately funded mortgages would be eligible.

Yet another strange twist to this deal is that any homeowner who lost their home since 2008 would get $1,500 from the banks, the New York Times reports, costing the banks a total of $1.5 billion. As Morgensen rightfully points out, this is far less than any wrongfully foreclosed on homeowner deserves, and more than anyone who was legally foreclosed on should receive. This incentive makes no distinction between people who were victims of mortgage fraud and those who were not.

Bottom line, a deal still seems likely, and all the parties involved emphasize they are seeking a deal which is fair to both sides, but Oppenheim cautions that can’t happen unless there are greater repercussions to the banks or should we say bank robbers?

Roy Oppenheim and his client shared their recent story in this week’s Daily Business Review with an inside look at the trials and tribulations of a system where one asks: Who is on first? 

Under a state Supreme Court order issued 18 months ago, banks have been paying third-party mediators to perform outreach and mediation in an effort to keep Floridians in their homes. But in spite of spending at least $750 per case, the lenders rarely get homeowners into mediation.

According to defense attorneys, lenders appear unprepared to mediation, only prolonging a foreclosure case. It took homeowner Juan Picasso, who went into default after his son was diagnosed with a rare cancer, 26 months to get a modification on his mortgage. Deciding to do the application for modification himself, Picasso’s application for modification was denied three times and it wasn’t until he sought foreclosure defense attorney Roy Oppenheim’s help, that the case was settled with the bank.

Picasso described a mediation session that could have been in a Three Stooges short film.
Oppenheim, a foreclosure defense attorney in Weston, produced the letters as proof and noted the bank kept losing its copies of Picasso’s financial information and the bank’s responses.

“They kept saying all kinds of different things. They force-placed insurance on the property. They said Mr. Picasso’s insurance ran out so they put a ridiculous insurance policy on the property, which quadrupled the cost of insurance. He was in default because they were not keeping track of the insurance they put on his home.”

Roy Oppenheim explained to the Daily Business Review that the mediation program was designed to be a more flexible forum for homeowners to get a loan modification or sale to avoid foreclosure.

“If you think there’s going to be a principle reduction, forget it,” Oppenheim said. “That’s never on the table. Those are just urban legends and the stuff of Internet scams.”

In many cases, mediation settlements resulted in a short sale to avoid affecting the Florida homeowner’s credit history. The program requires homeowners eligible for mediation, some 63,019 individuals, to pro-actively take advantage of it. However, by the end of 2010, only 8,669 mediations were conducted, of which only 2,309 resulted in an agreement.

A major bottleneck in the process is that banks continue to be overwhelmed. The lawyer for the bank may attend the mediation in person, but he has no authority. The bank’s modification officer appears by phone and the bank representative online has limited authority, never makes a decision during the meeting and routinely discusses the case as if he is looking at the file for the first time.

Click here for the full article

McCollum’s economic crimes division is investigating the Law Offices of David J. Stern of Plantation, the Law Offices of Marshall C. Watson of Fort Lauderdale and Shapiro & Fishman of Boca Raton and Tampa for possible unfair and deceptive actions in handling foreclosure cases.

Florida attorneys including foreclosure defense attorney and legal blogger Roy Oppenheim questioned the timing of the investigation, suggesting it was politically motivated by McCollum, a Republican candidate for governor. In a Mason-Dixon poll taken only a week ago, McCollum trailed by 6 points – 31 percent to 37 percent.

“Why didn’t he do this two years ago?” Oppenheim asked. “He knows the allegations have been out there. He knows complaints have been made. I think the timing is a little off. I’m thrilled he’s doing this, but I would have preferred he do this one-and-a-half years ago. Many people who didn’t have attorneys didn’t have the support of his office.”

Oppenheim also wishes McCollum would extend his investigation to lenders and mortgage holders for filing faulty foreclosures.

“He’s investigating the law firms, but he should be investigating the banks,” Oppenheim said. “He should also be looking into banks trespassing onto peoples’ properties. The law firms are the scapegoats. I see them as pawns.”

Check out the entire Daily Business Review article in the Oppenheim Law Newsroom

Is strategic default nearing its peak? Oppenheim Law doesn’t think so.

Pointing to recent positive indicators in the economy and real estate market, today’s Daily Business Review poses this question to foreclosure defense attorney Roy Oppenheim in today’s Economic Outlook.

Signals of stabilization in South Florida real estate include:

• The Florida Association of Realtors reported May data showing year-over-year increases in the median prices of single-family home sales.

• Default Research of Mount Pleasant, Pennsylvania, reported that initial foreclosure filings in Broward, Miami-Dade and Palm Beach counties fell 51 percent in May, compared with April.

A turnaround in home prices could eliminate the incentive to voluntarily enter foreclosure through strategic defaults. “If prices start going up, they wouldn’t be upside-down anymore,” Oppenheim said in the Daily Business Review. “But I don’t see that happening for awhile.”

Check out the entire Daily Business Review article in the Oppenheim Law Newsroom.

As discussed today in the Daily Business Review (see article below), the Third District Court of Appeals criticized a Miami Dade circuit judge for extending a foreclosure by one month. In essence, the Court reversed the judge’s opinion by stating that a courtroom is no place for compassion!

While it is inappropriate for an attorney to criticize the appellate court for possibly being uncompassionate, it is fair to say that a good foreclosure defense will go a long way in preventing a judge from having to attempt to be compassionate. Rather the Rules of Civil Procedure, the Florida Constitution, and the idea that the bank comes to the foreclosure with unclean hands will go a lot further than begging the court for mercy.

Typically circuit court judges were permitting extensions of foreclosure dates in order for homeowners to be able to complete a mortgage modification or a short sale. Ironically enough, if the banks didn’t drag their feet in approving short sales and approving modifications, the judges would never have been put in this terribly uncomfortable position in the first place.

Thus, in an ironic twist, we thank the appellate court for further justifying what we do every day and that is to defend homeowners with legitimate legal defenses in a foreclosure. The banks have done enough things incorrectly that will provide a trial judge an opportunity to delay a sale, should they want to, through the use of appropriate legal arguments.

The only unfortunate aspect of the appellate court’s ruling is that unrepresented clients will now be further churned and spit through a process that is only accelerating because of the increased workflow and reduction in court staff due to budget cuts. It is ironic that the bank even brought this action to the appellate court but it was through abuse by the homeowner that ultimately frustrated the bank in pursuing this appeal. Frankly, I would always prefer to have a strong legal argument than to beg for compassion from the court. So now you know the truth, don’t ever expect judges to be compassionate– even if it was their true desire.

From deep in the trenches,

Roy Oppenheim

Foreclosure Cases Appeal court takes judge to task for ‘benevolence’

October 06, 2009

By: Susannah A. Nesmith

Benevolence and compassion” have no place when it comes to setting foreclosure sales, a state appellate court ruled in a stern order.

The 3rd District Court of Appeal judges said they “thoroughly disapprove” of a decision by Miami-Dade Circuit Judge Valerie Manno Shurr to give an extra month to a couple trying to sell their home before a foreclosure sale, Senior Judge Alan R. Schwartz wrote for the panel last week.

Manno Shurr declined to comment on the decision, citing judicial rules that prohibit her from talking about specific cases. But in court, she made her position clear.

“People are having a hard time now. They are having a difficult time. Everybody knows it. Businesses are failing. People are losing money in the stock market. You know, unemployment is high,” Manno Shurr said. “Everybody knows that we are in a bad time right now, and I hate to see anybody lose their home.”

The appellate court found her reasoning flawed and said her decision granting extra time was “an abuse of discretion in the most basic sense of that term” because the bank had a right to the sale.

Several attorneys expressed outrage over the opinion but declined to go on the record, saying it could potentially be detrimental to them to openly criticize the judge or the court.

Mike Christiansen of Mastriana & Christiansen, a Fort Lauderdale attorney who has practiced real estate law for more than 30 years, was surprised by the tone of Schwartz’s remarks.

“It’s astounding to me, in the extraordinary times in which we find ourselves, that the court did not assert strong leadership and support the simple notion of compassion in cases where people and families are losing their homes,” he said.

“Compassion is what distinguishes a robotic application of the law from real justice. And justice is what we should — and do — expect from judges.”

Barry Simons of the Law Office of Barry L. Simons in Miami, attorney for Joseph and Blanca Doyle, declined to comment on the ruling against his clients.

Charles M. Rosenberg, attorney for Republic Federal Bank, said his client decided to appeal Manno Shurr’s decision in part because the bank felt Miami-Dade trial judges “needed some guidance.”

“With all of the foreclosures being filed in this county, we thought that the trial judges needed some guidance from the court of appeal on under what circumstances they could grant extensions because it’s very common for people to run into court at the last minute asking for extensions,” he said.

With the foreclosure sale of the Doyle home scheduled for the day after the opinion was published, the appellate court’s ruling had little practical impact other than to chastise the judge and provide some guidance.

“Although we thus thoroughly disapprove of the order, in view of the fact that the postponed sale is due to take place within a short time of this decision, no useful purpose will be served by formally quashing the order or ordering the sale to take place on an earlier date with all the procedural complications which would then result,” Schwartz wrote, stressing, “There are to be no further postponements of the sale.”

Judges David Gersten and Barbara Lagoa concurred.

More than 100,000 open foreclosure cases are in Miami-Dade, according to Clerk of the Courts Harvey Ruvin. Many are taking years to resolve.

In the Doyles’ case, the bank filed suit to foreclose on their 8,300-square-foot home in Pine-crest in January 2008 and got a $2.5 million foreclosure judgment in November, according to records.

The case was delayed when the Doyles filed for bankruptcy, but a federal judge tossed their case as frivolous. The Doyles were barred from filing another bankruptcy case for six months, and the extension Manno Shurr granted got them past that date.

“The immediate reason we filed was because of their abuse of the bankruptcy system,” said Rosenberg, a Carlton Fields shareholder in Miami. “We understand that the court should have discretion to grant extensions, but there has to be some reason for doing it.”

The Doyles did not file a second bankruptcy petition, and the house sold at auction Thursday. Rosenberg’s firm submitted a $1.3 million bid on property with an assessed value of $2.64 million.

Foreclosure attorneys were predictably divided on the opinion. Attorneys specializing in defending homeowners were concerned that it takes away judicial discretion and leaves homeowners already in financial straits even more vulnerable to the whims of lenders. Those who represent banks said it would help them deal with homeowners who are abusing the process.

Peter Ariz, a South Miami solo practitioner who represents homeowners, said extensions often are necessary because the banks he deals with won’t negotiate mortgage modifications quickly.

“The judges here have really been the only ones defending the consumers because they’ve allowed the borrowers the time to negotiate,” he said. “There’s a lack of compassion on the other end when it comes to the lenders.”

“I deal with banks that delay the modification process for months before finally offering a modification that actually raises the homeowner’s payments,” he said. “And then they file a foreclosure while they’re negotiating the modification. That’s just unconscionable.”

On the other hand, lender attorney Zoe Krikorian of Weisenfield & Associates in Miami hopes the ruling will speed Miami-Dade foreclosure cases.

“If there are legitimate reasons — people really trying to modify the loan, or they have a valid contract for a short sale — that’s one thing,” she said. “But many times, it’s just a delay tactic so people can stay in their houses longer without paying.”

She said the earliest sale date she could get for foreclosure judgments issued now is next April. And it often takes months to get a judgment after a case is filed. Plus, lenders usually wait for several months of missed payments before filing foreclosure suits.

“When we reset a sale, think about it. They’ve already had as long as two years since they stopped paying,” she said.

Miami-Dade civil judges “are each carrying dockets of three to four thousand foreclosure cases,” chief civil administrative Judge Jennifer Bailey said by e-mail.

“As a result of the explosion of foreclosures, judges are routinely confronted by emergency motions, and each judge tries to do justice in the case before him or her according to the law and equity.”