The South Florida Business Journal caught up with Weston Title and Oppenheim Law to get Roy Oppenheim’s opinion on a recent mortgage deal.
Banks giving their employees sweetheart deals on financial products is nothing new. Recently, Great Florida Bank COO, Masood Ghomeshi experienced one of the perks of being a bank employee by landing a loan modification that many consider to be a good deal. According to sources, Ghomeshi’s was able to change the terms of his $652,000 home loan with Great Florida Bank so that he is only required to pay the interest on the loan for the next three years. This will effectively reduce his monthly mortgage bill by $1,500 every month.
But foreclosure defense and real estate attorney, Roy Oppenheim, disagrees that Ghomeshi got as good a deal as everyone thinks. He has seen other people get better interest rates than those afforded to Masood Ghomeshi. Additionally, “Many people can’t get this deal because they can’t get the attention of banks,” says Oppenheim. In order to get their bank to work with them, Oppenheim says most people have to default on their loans. This doesn’t appear to be the case with Ghomeshi.
Terrence Brown, a spokesperson for the bank, stated that Great Florida Bank has a loan modification program available for their customers. However, according to banking attorney Andrew Hall, the bank must make the same terms they gave Ghomeshi available to all of their customers. Additionally, since it is an insider loan over $25,000, the deal must be approved by the bank’s board.

As of June 2011, Great Florida Bank had $123 million worth of loans that had been modified. Great Florida Bank customers and Florida homeowners looking for more information about loan modification and what they can do to avoid foreclosure should visit Oppenheim Law or Weston Title.

Reporting on the winning and losing headlines, South Florida Law Blog brings you the break down and what this means to the Florida homeowner.

While South Florida is #1 for mortgage fraud and foreclosure settlement talks between banks and the Obama administration appear futile at best, this week’s new was not all doom and gloom.

Check out Oppenheim Law’s and Weston Title’s picks in the week’s winners and losers for Florida foreclosure, real estate and the economy.

Winners

Pending home sales up 18% in Miami-Dade
Pending home sales rose 18 percent in Miami-Dade County over the course of the past month, according to new data released today by the Miami Association of Realtors.

Pending home sales, which include single-family home and condominium unit sales, were also up 3.24 percent month-over-month in March, the figures show.

“Increased pending sales reflect the existence of pent-up demand and should result in strengthening home values as distressed housing inventory continues to be absorbed,” said Jack Levine, chairman of the board of Miami Realtors.

Hiring Shows Growing Strength
The American job market is starting to show some muscle, according to The Wall Street Journal.

The jobless rate, our most politically salient measure of economic health, edged down to 8.8% in the fourth consecutive monthly decline despite the fact that more Americans entered the job market.
“It’s a very solid report that shows the labor market gaining momentum,” said David Greenlaw, an economist with Morgan Stanley in New York.

The public sector remained a weak point, as local governments shed 15,000 jobs last month in an effort to close budget gaps, but many other sectors showed strong growth, according to The Wall Street Journal.

Professional and business services gained 78,000 jobs. Factories added 17,000 jobs, while health care added 37,000. Over the past 12 months, health care has added an average of 24,000 jobs a month.

Losers

South Florida is #1 for Foreclosure Fraud
South Florida is first in the country for the number of mortgage fraud suspicious activity reports per capita, according to a new report from the Financial Crimes Enforcement Network and The South Florida Business Journal.

The region, which recorded 11,833 such reports last year, also leads the nation in Medicare fraud and auto insurance fraud.

Overall, mortgage fraud reports rose significantly in 2010, with 70,472 reports filed last year, up from 57,507 in 2009.

In Foreclosure Settlement Talks With Banks, Predictions of a Long Process
Little was settled in the first round of foreclosure settlement talks, according to The New York Times.

As negotiations begin over new rules for homeowners who are in default, experts all agree that progress is going to take time.

But lengthy negotiations work to the banks’ advantage, according to The Times.

“The banks’ strategy is to run the clock,” a Georgetown University law professor, Adam Levitin, said. “The chances of a settlement that meaningfully reforms mortgage servicing and makes the banks pay an appropriate price for illegal conduct are rapidly slipping away.”

Draw

Subprime Bonds Are Back

As the economy recovers, long-term investors are willing to take on more risks and subprime and other residential mortgage bonds that helped trigger the financial crisis are back in vogue, according to The Wall Street Journal.

The stock market ended its best first quarter since 1999 last week, with the Dow Jones Industrial Average closing up 6.41% on the quarter.

The willingness to take on risk is helping ordinary borrowers, too, by leading banks to make more nontraditional loans, such as jumbo mortgages, and to charge lower interest rates for them.

While it is encouraging that the markets are continuing on an upward swing, cautious optimism is needed any time subprime bonds are involved.

So, while it looks like housing values keep dropping around the country and new construction is also off, South Florida real estate may have hit rock bottom or close to it.

It seems that South Florida’s position as an international location is encouraging foreigners to swoop in and purchase homes and condos that based on an international standard are outright cheap. Of course; a strong stock market, a dollar that is fairly weak and the prospect of huge government defecits that forshadows inflation, only helps.

Roy Oppenheim Tells SFBJ: It’s a Year Late!

Oppenheim Law has been arguing for creative and practical solutions that benefit banks and homeowners alike for more than two years. Finally, while curiously late into the game, CitiMortgage announces a trial deed-in-lieu mortgage program allowing homeowners to avoid the painful foreclosure process.

The deed-in-lieu program allows Florida homeowners facing foreclosure to remain in their homes for 6 months, in exchange for signing over their deeds to CitiMortgage at the end of the period.

Check out Roy Oppenheim’s opinion on the CitiMortgage announcement by reading the entire article in the Oppenheim Law News Room.

My good friend, Julie Kay, recently wrote a South Florida Business Journal story on the mixed reviews for the government’s Home Affordable Modification Program, or HAMP, as legislators like to call it.

According to the article, HAMP is part of the U.S. Treasury’s Home Affordability & Stability Plan to save 3 million to 4 million homes from foreclosure. So far, approximately 360,165 trial modifications have started nationwide.

I was asked to provide my take on the program and will be quoted in the article. Here is a summary of my opinion as expressed to Julie:

One flaw with the program is that while a small percentage of individuals has seen their interest rate drop or the terms of their loan extended, the program does not provide for principal reduction.

A second flaw I identified is that the program does not extend to jumbo mortgages, second homes or investment properties– a group which makes up more than half of all homes.

So be sure to check out South Florida Business Journal entire story or if you are a subscriber, you can check it out at http://southflorida.bizjournals.com/southflorida/stories/2009/09/28/focus5.html

Here’s the entire story by SFBJ Julie Kay:

Three months behind on his mortgage, Hollywood resident Neil Reisner applied for a mortgage modification under the federal government’s $50 billion loan modification initiative.

But, he has been less than thrilled with the outcome. JP Morgan Chase, his loan servicer, offered him $300 off his $2,700 monthly mortgage. What he saves now will be tacked onto the back end of his mortgage.

Reisner, a journalism professor at Florida International University and father of two, says he will probably be forced into foreclosure.

“It’s disappointing,” he said of President Barack Obama’s housing plan. “They should reduce the principal. I could easily justify walking away just to get this albatross from around my neck.”

Reisner is not alone. The goal of the Home Affordable Modification Program (HAMP), part of the U.S. Treasury’s Home Affordability & Stability Plan, is to save 3 million to 4 million homes from foreclosure. So far, 360,165 trial modifications have been started nationwide.

Some people are getting meaningful reductions, allowing them to stay in their homes, according to Diane Cantor, director of Centro Campesino Farmworkers Center in Miami.

“People fall on their knees in joy” when they get modification details, she said.

Centro Campesino is one of the nonprofit agencies teaming up with Chase – which also handles mortgages issued by Washington Mutual and EMC Mortgage Corp. – to offer seminars on mortgage modification.

“We’ve seen people have their monthly payment reduced by $900,” Cantor said. “That’s the difference between staying in their homes and not staying in their homes.”

Many hoped that offering mortgage modifications to homeowners would stem the foreclosure crisis. But, modifications are voluntary, and some lenders appear to be participating more than others.

Bank of America, which has the largest number of delinquent loans in the HAMP program, had started trial modifications on only 7 percent of those loans by August, according to a new government report.

Chase has started loan modifications on 106,200 – 25 percent of eligible loans. Chase has opened 27 mortgage modification centers tnationwide, including two in South Florida.

“We’re trying to do a lot of outreach, to let the community know that we are here,” said Ertha Brathwaite, manager of the Chase Homeownership Center in Aventura. “We are getting quite a few people coming in. Based on the delinquency in Miami, though, you would expect more.”

Seven modification seminars are planned in South Florida in the next 45 days.

Homeowners can also walk into one of Chase’s mortgage modification centers or apply over the phone.

“At the centers, they are trained to handle mortgage modification,” Chase spokeswoman Nancy Norris said. “That is all they do. They don’t sell mortgages, they’re not dealing with credit card issues. They’re just trying to help homeowners stay in their homes.”

Chase can drop the interest rate to as low as 2 percent and extend the term of the loan, Norris said. However, she emphasized that the program is not about “principal forgiveness.”

“The biggest misconception in South Florida is that being upside down is a financial hardship – and it’s not,” Norris said. “Our goal is to make it affordable to the homeowner to make their house payment, not to reduce the principal.”

That is one of the key flaws with the program, according to legal experts.

“There is some urban legend that you’re going to see some massive amount of principal reduction,” said Roy Oppenheim, a foreclosure defense lawyer in Weston. “You’re seeing some reduction – about 20 percent – but it’s usually interest, penalties and stuff. On rare occasions, you see some principal reduction.”

Oppenheim said HAMP excludes jumbo mortgages, second homes and investment properties.

“That’s 60 percent of homes right there,” he said.

April Charney, a nationally recognized foreclosure expert, says the only real solution to the problem is for Congress to declare an emergency moratorium on foreclosures.

The HAMP program cannot work, said Charney, who sits on the Florida Supreme Court Foreclosure Task Force, because much of the mortgage paper has been bought in bulk and sold to foreign countries.

“Until we can do workouts with stabilized mortgages, we’re all going to lose,” she said. “Until we can reduce principal and interest rates, we are counterproductive.”

Still, on the ground floor, workers at Centro Campesino in Miami are optimistic about the HAMP plan. More than 20 people came to the first outreach meeting with Chase last month.

“We would like to do this with all the different lenders one day a week,” Cantor said. “It’s going to take a lot of things working at the same time to solve this foreclosure problem, but that doesn’t mean there isn’t some value in getting the mortgage reduced from 7.25 to 2 percent.” by Julie Kay

So, we all know how much I hate publicity! LOL. But, when marketing columnist Jeff Zbar from the South Florida Business Journal was looking for a local business to feature, one that was blending social media and traditional to gain more online visibility, how could I say no?

My PR agency, The Buyer Group, told me I needed to be in this story! I’m proud to be the trail blazer when it comes time to reinventing your business and how you think. In today’s economy, what worked yesterday might never work again, so we try new things.

Here’s the story, let me know what you think.

Hybrid campaigns blend online, traditional marketing methods

When Roy Oppenheim appears as an expert guest on a local television news broadcast, that’s the start of a hybrid marketing campaign.

His media relations firm pitches him to the media as an expert in foreclosure and real estate law. When Oppenheim appears on television, he takes that recording and posts it to YouTube – and then embeds it in his Web site and blog site. He then blogs – in one of the more than two dozen blogs he’ll post each month – about the appearance, his monthly seminars and other content.

Oppenheim once believed in the power of traditional marketing. Today, his campaigns are a blend of some traditional and heavy online and social media.

“We’re not using social media just to solicit clients, but as a means to deliver services and information,” said Oppenheim, senior partner with the newly branded practice, Oppenheim Law. “We’re redefining ourselves as almost a Web-based firm. You have to be on the path and embrace this medium to make it successful.”

As new media and online social marketing take hold, some companies are embracing a hybrid approach to their marketing. Not keen to cut off their remaining traditional marketing – including print, radio, Yellow Pages or television ads, and public relations – they’re lowering those budgets, but using what’s left to drive awareness about their online presence.

For Oppenheim, each news release that’s distributed is optimized for keywords critical to the firm. His Twitter feeds, a Facebook fan page, his LinkedIn account and other sites are driving brand awareness of Oppenheim Law and Weston Title, his title insurance company.

No one application has proven to be the “silver bullet” that individually drives the bulk of Oppenheim’s online awareness, said Lisa Buyer, principal with the Deerfield Beach-based Buyer Group, his marketing firm. But, the combined results have been a 98 percent increase in Web site visitation, from about 900 unique visitors a month late last year to 1,800 in August, she said.

“They all feed off one another,” said Buyer, who started handling Oppenheim’s PR, search optimization and social media in December. “We use social media to promote some of the traditional marketing events such as seminars, where it takes traditional networking to really close a deal.”

Oppenheim’s blended approach has reduced or eliminated much of his traditional advertising, halving his Yellow Pages ads last year and pulling them completely this year. His mainstay today is media relations and public appearances as a way to drive traffic to his Web site, blog and social media sites.

Read on for the full story from the South Florida Business Journal.