States are taking settlement money right from under us!

It’s pretty hard to find a single housing advocate or foreclosure defense attorney, myself included, who didn’t find the national mortgage settlement to be, at the very least, flawed.

It may have been a necessary step to getting the housing market back on track, but we know that it didn’t come close to compensating homeowners who had been illegally kicked out of their homes, and in the end, the banks are getting off remarkably light for their robosigning crimes.

Which is why what a multitude of states are doing with some of the banks money is downright revolting.

At least a dozen states are taking tens of millions of dollars in direct payments from the settlement and treating them like a slush fund.

Let me explain.

Part of the settlement included $2.5 billion that was given outright to the states. Florida took in just over $334 million.

The settlement calls for these dollars to be used to “to avoid preventable foreclosures, to ameliorate the effects of the foreclosure crisis, to enhance law enforcement efforts to prevent and prosecute financial fraud, or unfair or deceptive acts or practices and to compensate the States for costs resulting from the alleged unlawful conduct of the Defendants.”

But much like much of the settlement overall, there is nothing in this language that has any real measure of enforcement. Some states are flat out ignoring these instructions and doing whatever they want with the money they are getting off the backs of good honest homeowners.

A new report from a national affording housing group called Enterprise Community Partners identifies 9 states that are using only part of their settlement money as it was intended. And 6 aren’t using a single dime to address the foreclosure crisis, according to the report.

And that was before California governor Jerry Brown declared his intentions to use his $410 million to fix gaps in his budget.

Texas is putting $125 million, the overwhelming bulk of the money it received, into its general fund. Missouri? Its $40 million is going to cover education cuts. Wisconsin is giving only $3 million to investigate mortgage fraud, but $26 million to their state budget.

Thankfully Florida seems to be doing everything right by seeking the public’s input on how to best spend its money. Hopefully Rick Scott won’t be tempted by his $300 million windfall, as so many other governors apparently have.

If the attorneys general allow this to stand without a dogfight, then the foreclosure settlement will become an even bigger laughing stock than it already is.

Of course they allowed the kind of vague language and that is now being exploited by these abuses, and they really have only themselves to blame. Many critics think the settlement lacks teeth and won’t do anything to help homeowners.

How exactly, with all these budgetary moves change that perception? Politicians can talk about how the foreclosure crisis decimated their budgets, but taking this money away from homeowners is nothing less than a shakedown.

It’s inexcusable and it yet again shows how little some politicians truly understand about what the banks have done to the economy and our nation. And what will happen in these states if foreclosures continue to rise?

What was the point of the protracted negotiations over the mortgage settlement, or Obama’s dog-and-pony show when it was announced, if homeowners in some states won’t see a single dime?

Homeowners must feel like Charlie Brown right after Lucy took away the football.

I’m not a reader of tea leaves, so I am not about to guess how the Florida Supreme Court will ultimately rule on Roman Pino vs. The Bank of New York.

But listening to the justices attack Amanda Lundergan, Roman Pino’s attorney, while seemingly going much easier on Bruce Rogow, the bank’s very well-respected lawyer, was at best, discouraging.

It’s common for the justices to try to poke holes in an attorney’s case, and it does not always mean that you can predict what their decision will be.

But with the thousands surely watching Thursday’s hearing, I was hoping the Court would have been a little more sensitive to the perception that they were most certainly creating, that the banks already have this one in the bag.

As a whole I found the Supreme Court judges flippant to the obvious fraud that Bank of New York has brought before the court in this case.

And for the Court to downplay the importance of that fraud, and what it means to the integrity of the judicial system, was offensive.

If you were an average homeowner watching yesterday’s hearing, I am pretty sure you came away with a feeling that the playing field is not level, and there are two different sets of rules for the banks and for the rest of us.

That is truly unfortunate.

The Supreme Court has to be above the fray, and they must not abdicate their responsibility to police their own system.

Which is exactly what would happen if the Court allows the phony documents, the fraudulent backdating, the bogus notes and assignments to be brought before them without penalty.

They would be inviting any plaintiff to bring whatever kind of garbage into the courthouse they choose, because if they get caught, all they have to do is withdraw!

The right to withdraw a case should not be used as a shield to protect yourself when you engage in illegal conduct. It’s the Court’s duty to sanction that conduct and hold the parties accountable, whether it be the banks, the attorneys, even another judge.

And that’s what Roman Pino vs Bank of New York is really about. It’s not about the harm done to Mr. Pino, or whether or not he’s ‘getting a free house’.

It is not OK to just hit the reset button whenever it suits the banks to do so.

The banks are terrified they might actually be held accountable for their actions!

If you haven’t already heard, there is a monumental case that was heard Thursday morning in the Florida Supreme Court, and every single homeowner should be paying close attention to this case.

To watch a replay of the oral arguments, please click here.

The case is Roman Pino vs. Bank of New York. It involves all the customary fraud I have seen in countless cases.

Missing documents, fraudulent assignments, fraudulents notaries, and forged documents, and a bank once again trying to shuffle it’s dirty deeds under the rug like loose dirt.

When Bank of New York first tried to foreclose on Pino, a regular working guy from Greenacres who fell behind on his mortgage when his business dried up, there was no assignment of mortgage.

So Bank Of New York’s lawyers tried to re-file with a new assignment, one which was fraudulently backdated (AKA robosigned).

The bank’s original lawyers, by the way, were from David J. Stern’s office. You know their story.

When our good friend and colleague Tom Ice, Pino’s lawyer, challenged the documents, Bank of New York suddenly decided they didn’t want to foreclosure anymore, dropped their lawsuit and scurried back into their hole.

End of the story??

Not even close. Ice continued to dog Bank of New York like a pitbull, because he, believe it or not, also thinks the banks need to actually be held accountable! (Remarkable I know.)

He tried to have the voluntary dismissal overturned, so that Bank of New York could face sanctions for the forged documents they tried to use to swindle Roman Pino and the court.

Like countless others banks, Bank of New York got their hand caught in the cookie jar. But now they are trying to remove their hand before it slams on them.

While the lower courts have sided with the bank and refused to overturn the dismissal, the 4th District Court of Appeal has asked the Supreme Court to weigh in on a question of “great legal importance, which in their own words, “has the potential to impact the mortgage foreclosure crisis”, since “many, many mortgage foreclosures appear tainted with suspect documents.”

The question is whether banks can avoid punishment simply by dropping a foreclosure lawsuit.

So now you know why this case, and the legal implications it carries, has the entire banking industry shaking in their ratskin boots.

Even though Pino has already settled with Bank of New York, and ‘remarkably’ got to keep his home, the effect this decision will have will go far beyond Roman Pino.

It could finally mean justice for homeowners throughout the state of Florida.

The Mortgage Bankers Association and the Florida Bankers Association have filed a brief with the court, as have the American Land Title Association and the Florida Land Title Association.

Guess who they are backing?

All of these organizations are asking the Court to rule in Bank of New York’s favor, so they can continue the status quo.

The banks are playing a shell game, trying to get the Court to overlook the obvious frauds committed by Bank of New York, all in the name of a “potentially devastating” economic effect a judgement against Bank of New York might have.

In their brief the Bankers Associations claim that banks will write less home loans if they can’t dismiss and then re-file a foreclosure.

Is that a threat?

What they are really saying is ‘Just let us keep doing what we’ve been doing, and let’s forget all about the rules of law.”

The housing market will be just fine. This is a scare tactic on the part of the banks, so please don’t be fooled. They are just worried their con-game will come to an end.

What the Pino case is really about is the court protecting the integrity of the judicial system and protecting the constitution. It is imperative for court to rule against Bank of New York to keep its own integrity above repute.

It’s unfathomable that a bank could simply avoid punishment for a crime that would land you or me in jail just because they decided to drop their lawsuit.

Bank of New York is arguing the case should be left alone, because engaging in fraud is not reason enough to overturn the dismissal.

If the justices dismiss this case, banks will be able to walk away from their transgressions whenever they choose. It’s not only inappropriate, but outrageous.

Roman Pino vs Bank of New York goes to the heart of protecting our constitutional democracy, and it’s critical that the Florida Supreme Court reign in the illegal conduct and behavior of the banks, because as Ice wrote in his brief, the court should not “draw a line that protects wrongdoers and blesses fraud upon the court.”

If the justices side with the banks they will be encouraging continued falsehoods, their impartiality will be implicated, and a form a anarchy that will ultimately lead to total disrespect for our constitutional principles will be unleashed.

From The Trenches,

Roy Oppenheim

• Banks make bad neighbors.

It’s been one of my mantras for years, and it’s a statement that is again reverberating across the country thanks to The Sun-Sentinel’s 3-part series “Bad Neighbor Banks”.

Thanks to the Sentinel, 60 Minutes, and the National Fair Housing Alliance, we are seeing the hard data that back up my assertion that banks, once they foreclose and take control of a property, just leave them to rot.

The grass no longer gets cut,the garbage accumulates, and before too long you end up with widespread blight not just in urban neighborhoods, but suburbia as well.

It’s the reason why I fight so hard to keep people in their homes. You and I are just better off when you have homeowners, vested in their houses and the neighborhoods they live in, keeping up their homes.

In the Sun-Sentinel’s series there is example after example of banks not doing even the most basic of maintenance. And their argument is usually, ‘It’s not our job’.

A bank has no investment in the neighborhoods you live in, beyond their own bottom line, and the banks have all but admitted it.

“The bank itself has no economic interest or ownership stake in the properties,” a spokesman for Deutsche Bank told the Sun-Sentinel.

So I ask you again, why would you ever want a bank as a neighbor?

The numbers don’t lie. The Sun-Sentinel found 10,300 code violations in bank-owned homes in South Florida since 2007. In the cities they tracked 40 percent of bank-owned homes were cited last year.

So chances are you are living next to one of these eyesores. And I’m betting you’re not too happy about it.

The threat of foreclosure blight is far from simply cosmetic. They become havens for illegal activity, for drug use and gangs.

The Sun-Sentinel cited a Miramar toddler’s 2009 death where a boy wandered into the backyard of an empty foreclosed house and drowned. The boy’s mom told the police the water was dark and full of garbage.

Foreclosure blight is just impossible to ignore, not that the banks and many at the top haven’t tried. Thankfully Florida governor Rick Scott finally took notice, not that I expect much to come from it.

On the one hand he sounded concerned, but in his very next breath he deflected blame from the banks, pointing instead to the poor economy as the reason for the rapid spread of foreclosure blight.

Last time I checked the economy doesn’t own these homes. Banks do.

Let’s not forget who put this governor into office. The banks fully supported Rick Scott’s campaign; I can’t imagine that he will do anything that will harm the banks.

Which means it’s up to the local cities and town to nail the banks and take back their neighborhoods.

Some municipalities are now trying more aggressive tactics, from issuing subpoenas to bank officials to citing banks before they have the title in their hands. But many just haven’t had the mustard to really go after the banks.

Most of the fines or liens issued against the banks just get ignored.

These are at best desperate tactics, if cities really want to get the banks attention, they should hire outside counsel and sue the pants off the banks.

Most local governments just don’t have the resources to take on the banks in a court of law, so just like homeowners, they need to lawyer up.

But the truth is most of these abandoned homes are just too far gone. We don’t have the luxury of waiting for banks to step up.

As I said in my last blog, Pam Bondi should be giving some of the $300 million Florida is getting from the foreclosure settlement to give to cities and towns, so they can raze these decrepit homes and take their neighborhoods back.

It’s time for the banks to stop being slumlords and rotten neighbors.

From The Trenches,

Roy Oppenheim

Florida Attorney General Pam Bondi is now asking for the public’s input on what she should do with the $300 million the state will be receiving directly from the national mortgage settlement.

She is openly soliciting your suggestions through her website from now until May 14th. As a foreclosure defense attorney and one of the people on the front lines of the housing crisis, I have more than a few ideas.

So Pam, please consider this my open letter to you and your office.

First and foremost, here is what you should NOT do with the money. Don’t throw it at principal reduction. It will have virtually no impact on Florida’s communities, it would be like throwing the money into quicksand.

So far, Florida’s efforts to offer financial relief to homeowners have just fallen flat.

Florida’s Hardest Hit program just hasn’t worked, and even recent changes to the program’s requirements will not help it reach enough people.

Move The Banks Out of Your Cities

What you need to do Ms. Bondi, is use the money to make systemic changes to Florida’s housing market.

First, give the money to your towns and cities to clear out Florida’s foreclosure blight. Blight caused by the abundance of abandoned homes the banks own, but refuse to take care of.

I’ve long told my readers that banks are bad neighbors, and the Sun-Sentinel now has the numbers that make my case.

Ms. Bondi, despite what your boss says, banks are the problem and you need to get them out of your cities and towns. Give your local governments the ammo to do it.

Your local cities are already going after the banks to try to force them to maintain their homes, as any property owner SHOULD do, but liens and fines mean nothing to these “Too Big To Fail” banks.

So give the money to local Florida municipalities so they can condemn and demolish these eyesores. Then let the cities buy these properties from the banks at their ‘true value’ and auction them off. Let new homes be built.

This will stabilize Florida’s neighborhoods and the real estate market, and in the end reduce suburban blight.

Take Back Your Property Records

Next, support your local clerks by giving them some of the money to support their investigations into MERS. Banks have violated the rules of real estate ownership with this fraudulent record keeping system and thankfully a few clerks, both in Florida and across the country have taken action by filing lawsuits against MERS.

This is the type of action you need to be encouraging and funding. MERS has destroyed our recordation system and turned what once was one of America’s strongest selling points and turned it into a laughing stock.

Our ability to control property ownership records used to be protected by our government, but over the last few years records have been bastardized and suddenly we’re more concerned with protecting banks ownership interests instead of the rights of regular citizens.

The banks have lost control over their own mortgages and it’s time to give your clerks the ability to seize control of these records back from the banks.

Give All Your Constituents Access to Legal Counsel

Lastly, it’s important that anyone have the access to good legal advice when defending their home. Not everyone can afford to hire a foreclosure defense attorney, and when homeowners go without representation, the banks trample all over them.

There are not-for-profit legal counsels offering help to homeowners, but many are understaffed or undertrained. Pam you could help fund these centers with the foreclosure settlement money,

If needed, use the money to offer specialized training to their staffs, so they can offer the same legal advice I offer to my clients.

Homeowners need help in undoing the wholesale violation of their property and constitutional rights, rights which are the bedrock of this nation. They need these rights restored.

Finally if you have any funds left bring an anti-trust action yourself, on the grounds that the banks are too big, anti-competitive and have harmed the state.

From The Trenches,

Roy Oppenheim

Maybe you weren’t convinced the first time I told you the era of the short sale was finally upon us.

I can’t blame you for thinking that banks were acting irrationally when it comes to the foreclosure process.

But Lender Processing Services just offered up the most convincing numbers to date that short sales are no longer just some pie-in-the-sky dream for distressed underwater borrowers.

For the first time in the US, LPS says there were more short sales in a single month then there were foreclosures.

In January short sales made up 23.9 percent of home sales, while foreclosure sales made up 19.7 percent of all home purchases.

Of course that means that over half of all real estate closings are for distressed homes.

A year before, the percentages were skewered in the opposite direction. In January 2011, 16.3 percent of home purchases came through short sales, and 24.9 percent were foreclosures.

Why are the banks now convinced, as I was long ago, that going through the long and harrowing process of a foreclosure is not their best option?

The proof is once again in the numbers. On average, foreclosed homes sold for 29 percent less than non-distressed properties in January.

Homes sold via short sale? They went for 23 percent less. Here in Florida, LPS says short sales have outnumbered foreclosures since July.

That means short sales are a better deal for the banks, plain and simple.

The truth is banks don’t want to own these properties, they certainly can’t handle maintaining these homes, and they just end up laying waste to neighborhoods by hanging on to them.

It’s just better for banks to sell the home and get a new buyer inside, rather than engage in a legal battle with a homeowner over whether they even have the right to foreclose in the first place!

And it’s better for homeowners who want to walk away from their homes, because they can do so legally, and leave the threat of foreclosure behind for good. It’s simple logic, yet it took the banks eons to come to this conclusion.

At Oppenheim Law we’ve saved homeowners over 22 million dollars in deficiencies. Homeowners are able to walk away from their obligations without any lingering repercussions of a deficiency judgement chasing them around for 20 years.

The bottom line it’s just sound business sense for banks, and its the best way to legally walk away from your underwater mortgage.

From The Trenches

Roy Oppenheim

In the weeks after the mortgage settlement was announced by the Federal Government, I waited under baited breath to the see it in its entirety.

Almost every week I read a different report stating the documents to finalize the settlement were about to be filed in court.

And as each reported deadline came and went, I grew more and more skeptical.

Would the banks manage to sneak some last minute releases in? Would the lofty figures promised to beleaguered borrowers be diminished?

The good news, now that documents have been completed and released to the public, is that the answer to both questions is a sound no.

The banks are not getting any get-out-of-jail-free cards, claims against MERS and the securitization process are still very much on the table.

On the other hand, did I learn anything new about the massive frauds perpetrated by the banks? Not really.

There are pages listing what the government has now labeled as “Unfair, Deceptive, and Unlawful Loan Practices”.

The settlement does say that the banks violated federal laws, that they wrongfully denied modification applications, and overcharged for ‘forced place insurance, among other misdeeds.

It even finally acknowledges that the banks engaged in robosigning.

But these are things that my clients and I have long known.

If you’ve read the Wall Street Journal, or the New York Times, or any thorough news story on the housing crisis, there’s little in the mortgage settlement’s pages that will surprise you.

And that’s thoroughly disappointing. What the government has presented to the public is a complete white-washing of the robosigining and “fraudclosure” scandal. It acknowledges that the banks committed certain indiscretions yes, but I couldn’t find one concrete example, not one thorough examination of how it occurred.

Not that I didn’t expect it.

There are hundreds and hundreds of pages documenting how the many types of relief that banks will now offer will be credited towards their penalties.

There is far far less about the crimes that led to these penalties in the first place. There is no admissions from the banks. They committed forgery, perjury, impersonation, tax evasion, and plain old garden variety fraud.

In my last blog I railed against the Florida Fair Foreclosure Act, which is making its way rapidly through the Florida Senate as the session winds down.

I said it’s being pushed by banking industry shills and should die a quick death.

So of course it was passed by the Senate Banking and Insurance Committee by a 6-4 vote and will now be headed to a full vote before the House and Senate.

Thanks guys! With friends like that…..

But after a moment of reflection and enlightenment, I have this to say to my friends in Tallahassee.

Bring it On!

That’s right! Pass the Bill.

My phones have not stopped ringing these days, as more and more clients are getting ready to lawyer up.

That’s right this bill will only increase the value I bring to my clients each and every day for without an attorney the Legislature will make sure that the “Florida Fair Foreclosure Act” is fair… for the banks … but not for you.

They will make sure that without counsel that you will be stripped of your right to defend your home. Without counsel the new law will ensure that you will go through a legal system that will resemble a steam roller.

It makes me laugh that the Legislature is entrusting the banks to not commit fraud once again. Because the honor system worked so well the last time.

But its sad that the Legislature is interfering with the independence of the judiciary by telling the courts what to do and how to do it.

Please, please try your best to pass the Florida Fair Foreclosure Act, because all you’ll be doing is making sure I’ll have a new stream of clients to defend, and more importantly be able to help the economy by hiring more people.

Unfortunately it just goes to further my point that the banks will try take advantage of homeowners every chance they get, and you still need representation to fight them.

The banks haven’t learned anything from the robosigning fiasco, and are still trying to find shortcuts. They will do whatever they can and grease any palm in order to make things easier for them.

And unfortunately, there are still plenty of politicians willing to offer one.

So once again to the politicians in Florida’s capital I say, pass the Florida Fair Foreclosure Act. You’re going to do it regardless of what I say.

But remember, I’ll be waiting for you, your enablers– the banks, and so will be my new clients!

Photo by The-Lane-Team

Banks need to get their massive foreclosure backlog off the books. There are over 368,000 cases in Florida. I get that.

Getting these properties into the hands of families who can afford them, that is what I want to see. It’s needed to jump start the economy, and no one wants to see the banks out of the neighborhoods more than me.

But it can’t be allowed to happen on the backs of other homeowners plain and simple. Lenders have tried to thrust these homes back onto the market before, and that’s why they just shelled out $25 billion.

The banks were penalized for being unethical, untrustworthy and fraudsters, and it doesn’t look like they have learned their lesson.

Yet a series of proposed bills now making their way through the Florida House and Senate offer banks unjust control over the foreclosure process, all in the name of getting abandoned homes back on the market.

The Senate version, which would create the “Florida Fair Foreclosure Act”, was passed by a judiciary committee earlier this week by a 5-2 vote. There is a similar bill making their way through the House.

But are they really ‘fair’ to homeowners? Absolutely not.

These bills are being pushed by banking industry shills. They make it easier for lenders to foreclose, and allows them to do so faster.

Have the politicians in Tallahassee learned nothing from the settlement? The $25 billion isn’t even in the mail, yet some are back to their old tricks, turning a blind eye to the plights of their constituents and denying them due process.

Sounds awfully familiar to me!

What these bills do is allow for more expedited foreclosures. Under the Fair Foreclosure Act, if the banks consider a property to be abandoned or if the homeowner does not respond within 20 days of being served, a judge has no choice but to rule for a final judgment of foreclosure right then and there.

A judge’s gavel would be nothing more than a rubber stamp, yet again.

The language of what constitutes an abandoned home is just too vague, and it is vague because the banks crafted it to be that way.

What are these criteria? If there is too much trash, if at least two neighbors say the home is abandoned, and if no one can be reached at the home at different hours of the day over a 72 hour period are among a few of them. And only two of them would need to be met for a home to be considered abandoned.

The people who help determine if homes meet those criteria, they all work for the banks, not the courts, not you. This bill offers the banks impunity with absolutely no oversight.

It’s a classic example of the fox watching the henhouse. If the banks present faulty ‘criteria’ that they developed, what chance do you have?

Even if your home is later ruled to have been fraudulently taken, your only recourse under this the Florida Fair Foreclosure Act would be monetary. You don’t get your house back, and the banks would be the winners, yet again!

Judges may not like seeing a logjam in their courts, but there is a reason a foreclosure takes a long time. It’s to prevent homeowners rights from being trampled.

Now the Florida Fair Foreclosure Act does have some provisions that are beneficial, namely that they would greatly reduce the amount of time that banks would have to recoup any unpaid mortgage debt, otherwise known as a deficiency.

Banks would have only one year, as opposed to the 5 they now have to seek a deficiency judgment.

That’s not worth the chance that even one homeowner might unfairly lose their house. Once again expediency is being promoted in exchange for fairness, dues process and constitutional rights.

Let’s hope the Florida Fair Foreclosure Act dies a quick death. I doubt it though.