As 2011 got underway we were presented with a fascinating yet disturbing report by the Florida Association of Court Clerks called “Unfair, Deceptive and Unconscionable Acts in Foreclosure Cases”. It brought these horrible practices into the harsh light of day.
“What we got from this is the state has had the opportunity to see where the laws have been broken,’ Palm Beach County Clerk and Comptroller Sharon Bock said at the time, “and frankly, it is in large part thanks to the work of the defense attorneys.
We cited April Charney from the Jacksonville Area Legal Aid and Peter Ticktin and many others wonderful attorneys who have taken bank officers’ depositions, challenged judges rulings and fought the good fight for the Florida homeowner.
Somewhere along the line, the overly ambitious bankers on Wall Street had the “great idea” of slicing and dicing the interest of the Promissory Note and literally severing it from your Mortgage. Why? Convenience,expediency, and, arguably, greed. And much like Humpty Dumpty after his great fall, the banks couldn’t bring the mortgages and their corresponding Notes all back together again. The banks were accused of fraud and perjury trying to do just that.
If Americans are right, 2012 will finally be the magic year for the housing market. Over 2,000 adults were polled by Trulia and RealtyTrac , and the majority, 22 percent, said most Americans think the housing market will fully recover in the new year. A mere 10 percent thought a recovery would happen this year, while nearly a quarter of those surveyed predicted a bumpy road until 2015 and beyond. (more…)
Some of Oppenheim Law’s most popular videos and blog posts this year were on the topic of deficiency judgements. Understanding deficiencies and the Florida rules which pertain to them are key to avoid getting a deficiency judgment.
The unpaid mortgage debt associated with a residence is a deficiency. A bank can foreclose and force a judicial sale of a home if the mortgage borrower fails to pay the associated mortgage debt. The deficiency is the difference between the proceeds from the sale and the remaining mortgage loan balance. A deficiency can also result from a short sale, which is an alternative to foreclosure.
The rules pertaining to deficiencies differ from state to state. In Florida, if the bank is successful in obtaining a deficiency judgment, it will be recorded in the public records and collectable for up to twenty years. To avoid the possibility of getting a deficiency judgment, before deciding to walk away from your home, hiring a good foreclosure defense attorney is necessary.
At first glance, it looked like Floridaforeclosurevictims were finally getting the help they need from the feds. Reading the fine print it looks like if we had to describe this in one tweet word: #fail. (more…)
In an official Florida real estate news release, Oppenheim Law reports about 80 percent of its Florida foreclosure clients had deficiencies completely waived once they closed their short sale, also known as a pre-foreclosure sale, saving homeowners more than $16 million dollars in 2010/2011.
The lesson learned: by working with the banks, homeowners can craft their own real estate bailout and avoid a deficiency judgment.
“We are seeing banks focus on more efficiently clearing distressed inventory through more streamlined short sales,” said South Florida Law Blog’s Roy Oppenheim.
The increase we’ve seen in short sales is in line with numbers reported by RealtyTrac, reporting a 19 percent increase in short sales in 2011’s second quarter, while the number of bank-owned sales was stagnate. 12 percent of nationwide sales were short sales, according to the Q2 2011 U.S. Foreclosure Sales Report released by RealtyTrac.
“The short sale program is not a government bailout, it has evolved through American ingenuity,” reminds Oppenheim, “but is one of the only programs that is truly working.”
Florida banks see the short sale light
The banks would not be approving these shorts sales if it wasn’t an upside for them too, and it is. Banks have finally realized a short sale will also help their bottom line.
The average price for a home sold in short sale was $192,129 in the second quarter, 21 percent below the average price of a non-foreclosed home.
Yet a home that went through foreclosure sold for an average of $145,211, nearly 40 percent lower than a non-foreclosed home. (more…)
Is homeownership still part of today’s American Dream? A recent article in the Wall Street Journal shared some old school advice on buying a home in today’s economy, more along the lines of Depression Era thinkers versus Baby Boomer spenders.
1. Buy what you can afford without scrimping on other needs. If you need to save for retirement or college, save. Don’t think your Florida home is going to pay for them.
2. If you need to move in less that seven years, then rent, don’t buy. You will be hard pressed to break even on your Florida home unless you live in it for a long time.
3. Values could stay depressed for many years. The only way you can plan to build equity in your Florida home is to pay down the mortgage.
Whether buying or selling a Florida short sale or foreclosure or renting; make smart decisions in light of today’s economy. Today’s housing market is still unraveling.
Nearly 40% of homeowners who took out a second mortgage are underwater on their loans, but the news surrounding second mortgages isn’t all doom and gloom for Floridians, says Florida foreclosure defense attorney Roy Oppenheim.
Second mortgages refer to any loan taken out on a property that is subordinate to the first mortgage, and include home-equity loans or lines of credit.
According to data from CoreLogic and The New York Times, homeowners with a second mortgage are two times more likely to be underwater on their property. CoreLogic’s data also shows that homeowners with second mortgages are facing deeper levels of negative equity in their homes – $83,000 compared with $52,000 – than borrowers without second mortgages.
The bright side is that Oppenheim Law is seeing massive principal reduction on second mortgages through loan modifications, according to Oppenheim. It’s becoming common for the Florida foreclosure defense law firm to negotiate up to 80% in principal reductions of second mortgages, a far greater percentage than first mortgages.
A vast majority of first mortgages were cut up, bundled and sold to investors as mortgage backed securities, the process that played such an enormous role in the Florida real estate crisis. On the other hand, nearly three-quarters of second mortgages are still held by the banks that made the original loans.
The good news for Florida homeowners is that these banks are beginning to treat second mortgages similarly to consumer credit card debt, accepting minimal “pay offs” to settle up with homeowners.
Homeowners who are willing to negotiate a “short payoff” can have tremendous success reducing their second mortgage principal by 50% to 80% and then paying off the remaining balance in cash. Banks are even starting to solicit Florida homeowners with second mortgages to make initial offers for 40% to 50% reductions, which Oppenheim Law is then able to negotiate to as much as 80%. (more…)
Florida foreclosures and good news all in one story? Yes, it is true.
A new federally funded program is now accepting applications for mortgage assistance payments in Florida. The Florida Hardest-Hit program pays an applicant’s mortgage for up to six months to help them to focus on finding a job. There is a maximum, however, of $12,000. Also, the program will pay out up to $6,000 to bring loans current. If this seems meager, it is. Governor Scott gutted the program and stripped it of all effectiveness by changing the terms from 18 months of assistance to six. Ostensibly, this was done to open the program to more people. The problem with such a change is that the assistance provided will do little good to the people that need it most, those who bought houses during the height of the bubble and thus are extremely underwater. Additionally, loans that only need $6,000 to be current are hardly the loans that merit special federal assistance.
Oppenheim Law encourages homeowners to participate! The lack of effectiveness is not stopping homeowners from applying, nor should it. Any help is better than no help at all. Yesterday, the first day of the program, saw many more applications than were expected. However, an official tally for the state won’t be available until the end of the week.
There is an interesting practice developing at our nation’s big banks. Borrowers who are in or nearing foreclosure are being offered thousands of dollars to short sale their homes. Some are even being offered $35,000 to get rid of their homes, and quickly. This situation presents an intriguing insight into the way banks are thinking at the moment. Banks would rather pay you and take a loss rather than foreclose on homes.
Do such offers signify that banks have learned their lesson and are trying to get out of sub-prime loans, or are they looking to just prevent further losses? Perhaps the answer is that the banks are concerned about existing home prices. Bank of America’s chief economist, Mickey Levy, while speaking privately, spoke of the concern that the 1.8 million bad loans in the nation will drive down the market if they go into foreclosure. Such fears help explain why the banks are desperate to avoid foreclosing on homes. They don’t want the rest of their loans to become vulnerable: the more foreclosures, the more house prices fall, therefore, the value of the banks’ loans go down and more people want to walk away from their homes, causing the banks even more losses.
In the end, this situation is a win-win. Not only do banks protect home prices, but they stand to get back more money quicker from a short sale than a foreclosure and the good publicity would be a nice change of pace for their PR departments. Homeowners in trouble are also helped because they can get out of their houses with some cash in their pockets and get on with the rest of their lives.
Continuing our list here’s Pt. 2 of our Top 10 stories for 2011 — 
