Survey: Mortgage Foreclosure Scams Surge

Not only is America’s foreclosure crisis still going strong, it now comes with even more fraud and deception.

With heightened media coverage surrounding the recent national mortgage settlement and refinements to government assistance programs, experts say selling “the schtick” has only become easier for criminals. But there are red flags consumers can watch out for when trying to determine whether or not an organization is legit.

First, homeowners should never have to pay anything up front for a loan modification or information on how to negotiate with their lender, says Roy Oppenheim, whose Florida-based law firm Oppenheim Law has handled more than 1,000 mortgage and foreclosure fraud cases over the past 5 years.

“If you’re paying upfront to a non-lawyer who’s claiming they can modify your loan, that’s a big scam,” Oppenheim says.

Read More from US News and World Report

Short Sales Soar as Home Foreclosures Fall

The foreclosure crisis isn’t over, but a new trend in real estate sales could be the light at the end of the tunnel for many borrowers and lenders. Short sales, which occur when homeowners sell their homes for less than what they still owe, outpaced foreclosures for the first time ever in January,according to a new report from Lender Processing Services, Inc.

The Federal Housing Finance Agency announced this month that mortgage servicers will be required to review and respond to short sale offers within 30 days and make final sale decisions within 60 days. The new requirements, which take effect in June, have kept lenders busy expanding and training the staff needed to catch up with growing short sale demand.

“When the robosigning crisis hit, there was effectively an 18-month moratorium on foreclosures,” said Roy Oppenheim, a foreclosure defense attorney with Oppenheim Law in South Florida. “The banks got caught with their hand in the cookie jar and the lid slammed closed on it. Fraud, robosigning — it all came to a stop. But through this $25 billion settlement, they’re using the crisis to their advantage. The settlement creates a major incentive for the banks to do short sales.”

Read More from Lawyers.com

Short sales pick up in housing market

Lenders are pricing short sales more aggressively, RealtyTrac adds. In January, the average short sale price was 10% lower than a year earlier, exceeding the drop in U.S.home prices.

Some mortgage servicers started pursuing short sales more aggressively months ago. Bank of America says it did 107,000 short sales last year, up from 92,000 in 2010 and double the 2009 volume. New measures are also likely to boost short sales.

Freddie Mac and Fannie Mae, which own or guarantee 60% of home loans, will soon require lenders to decide short sale offers within 60 days. Realtors have complained that short sale offers often linger. The recent $25 billion mortgage settlement also encourages short sales.

New rules have slowed foreclosures in many states, increasing short sales, says Florida foreclosure defense attorney Roy Oppenheim.

Read More from USA Today

If there was anything positive that came out of the prolonged discussions between the states and the banks on the mortgage servicing settlement, it was that banks were reluctant to go full steam ahead in the foreclosure process while talks were ongoing.

But even before the settlement was announced, we saw signs that pointed to more foreclosures in 2012.

According to RealtyTrac, there were 24,783 foreclosure filings in the state of Florida in January, a 14% percent rise from January 2011, the first year-over-year increase in over a year.

Now that the settlement has been agreed to, the training wheels are off.

It’s petal to the metal folks. One thing that the settlement does for the banks is provide them a blueprint for how to proceed in the foreclosure process without getting their fingers stuck in the cookie jar.

Which means borrowers will once again have to defend themselves just as rigorously as they did pre-robosigning.

I’ve been asked if the settlement changes my advice to homeowners, to which I reply, ABSOLUTELY NOT!

You must continue to stand your ground. If you are in foreclosure or about to enter foreclosure, I will say what I have always said, you must fight the banks and force them to kick you out of your home.

The settlement may have changed the rules for the banks, but it shouldn’t change the rules for you, the homeowner. The banks will not transform into wonderful and charitable companies just because the settlement might penalize them.

Make no mistake about it, they will continue to come at you and come at your hard.

So allow me to reiterate my advice to you, the borrower.

Get legal representation if you need it and force the banks to kick you out. Settlement or no settlement, you still have the choice to modify or do a short sale or stay and fight.

Just because the settlement exposed much of the banks misconduct does not mean you will automatically be off the hook.

Unless there is a sheriff’s deputy at your door, do not give in.

If there is proof your mortgage was caught up in a fraudulent securitzied trust, you have a much better chance now of halting the foreclosure process outright. Courts have finally caught on to the banks illegal behavior and they can’t hide behind the bench as they have done before.

Of course you won’t have your case dismissed if you don’t, say it with me now, STAND YOUR GROUND.

If a dismissal seems unlikely, then you should look at a short sale. They are on the rise and many banks will offer you substantial cash, as much as $35,000, if you agree to sell your house back to the bank.

Lenders are willing to let you walk away from your underwater mortgage if you do so legally.

That way you can get a fresh start in a more affordable home or in a rental property. But don’t expect them to make such an offer if you move out the minute you are unable to afford your mortgage. State your case, and STAND YOUR GROUND.

Your third option is to seek a loan modification or mortgage relief from the government. There are more government programs than ever, in part because of the mortgage settlement.

While many of them have not been successful in the past, the settlement has pumped more money into these programs and you have a much better chance of qualifying and ultimately staying in your home.

But remember you can’t qualify for these programs if you move out.

Stand your ground, and fight the banks.

In The Trenches

Roy Oppenheim

Yesterday’s robosigning settlement that all but one state ultimately signed off on, was far from perfect.

Let’s make that perfectly clear.

Depending on what you have read, you might be outraged, you might be relieved, you might be overjoyed. And the target of your wrath or sympathy might depend on your own personal perspective.

But make no mistake about it, yesterday was a day of reckoning, for me, and much more importantly, for the people I represent.

Yes, the banks got a slap on the wrist and the money they are trickling back to the homeowners won’t make up for the systemic fraud these lenders engaged in, and make no mistake it was fraud at the highest level.

I wish I could personally put the handcuffs on each CEO who allowed robosigning to occur.

But here’s the silver lining, now we have a reengaged President, who is anxious to see the job done. We have Eric Schneiderman on the case, and he is going full-speed right at the banks.

They may have not gotten the flogging they deserve, but I am optimistic that they surely will.

Conservatives can blame the borrowers all they want, and certainly not all were faultless. But the banks were the grown-ups here, they should have known better. They had the chance, in the midst of the housing boom, to stop, take a breath and take a look back at what they had done.

They didn’t.

The truth is no amount of money would have been enough. And since we can’t put the banks in jail, they got what was in essence a very public shaming. And people’s eyes were opened. What you have now learned, can not be unlearned.

The banks for years, had their hands in their cookie jar, and tried as I might, I could not get people to glance over at the jar to see. I felt like a lone wolf calling out the banks on this blog.

Here was my challenge to borrowers back in 2009!!

Make the banks prove they own your note. Many times the banks are clueless who owns their note.

People thought I was Chicken Little, telling everyone the sky was falling. Well it was, and now everyone knows it. I went from being a lone wolf to a man lost in the crowd. My voice was far from the loudest voice yesterday, and that’s just fine by me.

When I first discovered that banks were essentially hiring people to impersonate banking officials and crank out thousands of fraudulent signatures, and were paying them what your average burger flipper makes, I couldn’t believe it. It was perjury and forgery, and those are crimes.

If not for the banks’ own arrogance and stupidity, yesterday’s settlement would never have come. If they had just plugged away and kept things running as they always had, they would have made money hand over fist and my clients would have been kicked out of their homes.

And what’s really bad for the banks is that robosigning is the key into the much larger world of securitization fraud, which is the real crime here.

Robosigning would have never been necessary if the banks hadn’t bundled up all these mortgages and sold them off to the highest bidder in the first place. If they had been satisfied with making millions, instead of trillions, we would not be where we are today.

What’s even worse for the banks is that robosigning provided the proof to investigate the banks for the larger fraud.

We are looking forward to the final day of reckoning, when the President and Schneiderman wrap their latest investigation because trust me, when they do, no one will give a damn about robosigning.

As always I am talking to you from the trenches.

Roy Oppenheim

As October begins with lows in new home sales and mortgage rates and highs in mortgage fraud and foreclosure rates, Oppenheim Law continues to help clients navigate through the legal waters.

On a high note – we are pleased to report Roy Oppenheim has been selected by his peers for inclusion in The Best Lawyers in America

Three cheers for Sheila Bair, the former head of the FDIC and a true advocate for the little guy, who resigned this week on July 8th. She fought for what is right for the homeowner, the depositor and the taxpayer.

Shelia was probably the only person in the Obama administration who really “got it.”

As a financial regulator, she understood the crisis as we do at Oppenheim Law, on the ground and in the trenches.

Truly the champion of the little guy, Sheila really understood that there were two sets of rules in this country:one set for big banks and another set for everyone else.

Her opinion was always dismissed and considered inferior to that of the Treasury and the Federal Reserve. She knew that the Obama Administration, while maybe understanding the plight of the little guy, always capitulated to the interests of big business, Wall Street and the banks.

Sheila understood that from Day One her responsibility was to protect the consumer, the depositor, the homeowner, and most importantly, the taxpayer. In a major piece written in the New York Times magazine this past weekend, she questioned why investment banks that were “counterparties” to AIG, like Goldman Sachs, received 100 cents on the dollar from the AIG bailout. Goldman, in fact, received over $12 billion from the bailout. As is well known, many people in the administration were in fact in some way connected to Goldman.

Before the crisis had truly descended upon our nation in 2007, Sheila understood that if banks were required to modify mortgages there was a possibility that the foreclosure crisis which led to the meltdown of the real estate market and subsequent destruction of the economy could possibly be contained.

No one listened to Sheila!

Shelia constantly tried to convince both the Bush and Obama Administrations that something needed to be done, however, her warnings were not heeded until it was too late.

Had the government listened to Shelia on early mortgage modification, it is possible “that the government could have prevented lots of pain and might have helped stabilize the economy a lot sooner,” according to the NYT.

However, Shelia states that maybe one of the reasons that mortgage modifications never really took off was that “maybe people thought that [she] was overstating the problem.” She added that in many cases regulators didn’t believe that borrowers were worth helping. The sense was that borrowers had probably overstated their income and assets and thus deserved to be thrown out of their homes.

Shelia also felt that the Treasury and the Federal Reserve did not lay the blame with overzealousness and greed on Wall Street but rather with a “system come undone.” We of course know that it was precisely greed on Wall Street that caused the crisis.

Needless to say, we here at Oppenheim Law will miss Sheila Bair and we hope, whatever she does, that she will not give up the good fight for what is right for the homeowner, the depositor and the taxpayer.

Three cheers for Sheila Bair!

From The Trenches,

Roy Oppenheim