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.

In our last blog we talked about the stories that resonated with Roy Oppenheim in 2011, but what stories mattered to you?

We reviewed the most popular stories on the South Florida Law Blog this year and came up with our list of the top 10 posts for 2011

# 10 — Florida Deficiency Judgments FAQs . . . By Popular Demand

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.

#9 — #Fail – Government Plan to Help #Florida Homeowners

At first glance, it looked like Florida foreclosure victims 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.

The two agencies that are in charge of overseeing the Independent Foreclosure Review went have gone out of their way to keep the details of this program secret. The most alarming issue is the possible conflict of interest between the consulting firms that were chosen by bank regulators to administer the foreclosure reviews. The fact is these consulting firms are actually getting paid by the banks.

The same banks that ultimately led the economy into the mortgage crisis were placed in control of deciding which homeowners are entitled to compensation for the banks own wrongdoings. It is doubtful homeowners will receive any meaningful relief from this program.

#8 — Law Review Executive Summary: Black Magic of Securitized Trusts

Deconstructing the Black Magic of Securitized Trusts by Roy D. Oppenheim and Jacquelyn K. Trask-Rahn gives an in-depth analysis of the process of securitizing mortgages and how it has gone awry. The article begins with a focus on the rise of subprime lending, the impact that subprime loans, such as “interest-only” and “negative amortization,” had on the American Dream of home ownership, and how “securitizing” these loans led to a false sense of security for homeowners and investors during the housing bubble.

During the spike in foreclosure filings that followed the implosion of the market, in an effort to prove proper standing to bring the action, banks began producing tens of thousands of assignments predating the filing of the foreclosure action. This mass production of assignments proved that trustees had not properly transferred the mortgages from inception thus the banks laced standing to foreclose.

#7 — Banks Desperately Seeking Short Sales

Oppenheim Law has represented hundreds of homeowners’ short sales over the past few years and as a result has seen millions of dollars of homeowner deficiencies waived by the banks, who are becoming more eager to avoid foreclosure and complete short sales.

On New Year’s Eve we’ll post our top 5 stories for 2011 — Happy Holidays!

Deficiency judgments

experts quoted in a recent foreclosure defense Wall Street Journal article!

If Oppenheim Law had a warning label it might read:

Deficiency judgments can be hazardous to your financial health. For best results hire a foreclosure defense attorney.

Deficiency judgments are today’s toxic wake up call.

Many Florida homeowners lost homes in the past year when they lost income and stopped paying their mortgage. In typical foreclosure cases, the bank takes the home back and sells it, meanwhile Florida homeowners think its over and life goes on. This is really the calm before the storm…

In likely scenarios, if the bank sells the house for less than what is owed, the bank can sue the homeowner for the balance.

The result is a foreclosure hangover! The remedy is more than Alka Seltzer and B12 can cure.

Foreclosure defense attorney Roy Oppenheim walks us through the scenarios of how to avoid a foreclosure hangover, also known as a deficiency judgment.

“What you should try to do at all cost is avoid a deficiency judgment,” said Oppenheim in a recent video interview.

According to a recent foreclosure story in the Wall Street Journal, 41 states and the District of Columbia permit lenders to sue borrowers for mortgage debt still left after a foreclosure sale. The economics of today’s battered housing market mean that lenders are doing so more and more.

Foreclosed homes seldom fetch enough to cover the outstanding loan amount, both because buyers financed so much of the purchase price—up to 100% of it during the housing boom—and because today’s Florida foreclosures take place following a four-year decline in values.

Ways to Avoid a Florida Foreclosure Hangover by Roy Oppenheim

Deficiency and Deficiency Judgement 101 from Oppenheim Law on Vimeo.

If a bank files a foreclosure they have approximately nine months to convert a foreclosure to a deficiency judgment, Oppenheim warns. So what are your options?

1. Deed in Lieu or Structured Foreclosure - In this scenario, attorneys work with the bank and come to a settlement where the bank gets the property in decent condition and in exchange the bank waives the right for filing a deficiency judgment against you. Sometimes credit scores can even be protected…

2. Florida Loan Modification - This is many times a more likely scenario if you want to stay in the home.

3. Florida Short Sale – Oppenheim says banks find short sales most accommodating in many cases. A short sale is when you agree to sell the property for less than the bank’s mortgage and the bank agrees to accept the offer. A deficiency can be negotiated and is often waived or reduced and negotiated.

4. Bankruptcy - What options do you have if a bank is pursuing a deficiency in a foreclosure, another option is seeking a bankruptcy attorney, says Oppenheim.

Florida is one on the states where lenders can pursue deficiency judgments and loan deficiencies are yanking borrowers back to a nightmare they thought was over…meet the foreclosure hangover.

A deficiency is when the bank forecloses on your house and a difference of money you owe remains. Once such a deficiency is registered by a court, it becomes a deficiency judgment.

In Florida, if you have a deficiency and it becomes a deficiency judgement, the Florida bank can seize your assets (bank accounts, cars, estate, etc.) for up to 20 years.

In this Summer School ‘How To’ Video, Roy Oppenheim tells you what you need to know about deficiency and deficiency judgements in less than four minutes!

The times they are a-changin’. And it’s about time.

Florida District Courts of Appeal are ruling in favor of homeowners when procedural due process has been violated as well as in cases where the trial court improperly granted summary judgment in favor of a bank based on lawyers’ assertions that have no evidentiary support on the record.

Recent decisions from the 1st, 3rd, 4th and 5th District Courts of Appeal can provide hope to homeowners and South Florida foreclosure defense attorneys that banks will be forced to start playing by the rules, or risk having their judgments reversed on appeal.

For example, the 5th DCA reversed a summary judgment decision in favor of a bank last month for a lack of evidence on the foreclosing bank’s standing to sue. The Court of Appeal found that documents submitted at trial contradicted the bank’s mere allegations that it was the holder of the note, and therefore allowed to foreclose.

“Taken together, these decisions are powerful evidence that Florida’s appellate courts are increasingly receptive to foreclosure defendants’ complaints that some trial courts are not holding foreclosure plaintiffs to the requirements of Florida Civil Procedure – and perhaps that they are also paying attention to the widely reported improprieties in the mortgage lending industry,” said Dan Bushell, a South Florida appellate attorney, on his blog, Florida Appellate Review.

We have seen the pace of foreclosure proceedings drastically slow in the past months due to the court’s heightened documentation standards. These recent decisions by the District Courts should pump the breaks even more on the banks’ steamroll approach to foreclosing South Florida homeowners. Banks better take note.

From the trenches,
Roy Oppenheim, P.A.

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.

Here are a few excerpts from the story-

“Oppenheim, a leading foreclosure defense attorney in Florida, represents many homeowners in the state who are facing deficiency judgments. There has been legislation proposed to try to limit them in Florida, but it has gone nowhere, he said.”

“Some states don’t allow the judgments.”

“Most often, banks pursue deficiency judgments when they are the buyers at the auction,” Oppenheim said. He estimates that lenders are getting the judgments on less than five percent of foreclosed properties in Florida today. “But it’s creeping up,” he said.

“The best way to avoid such judgments is to fight a foreclosure every step of the way, and not to just allow a bank to take your property,” Oppenheim said.

For the full article see http://www.naplesnews.com/news/2010/sep/01/foreclosure-deficiency-judgments-rise-lee-county/

Live from Ustream, it’s Roy Oppenheim with an instant replay available for the next 48 hours!

On a night when Oppenheim Law broadcast its monthly Foreclosure Defense Workshop to over 100 viewers on UStream, the primary message from real estate attorney and legal blogger Roy Oppenheim was one of opportunity and hope.

As we continue to roll through 2010, dubbed “The Year of the Short Sale” by Oppenheim, it is important to remember homeowners always have rights, no matter your financial situation, and options always exist for defending yourself and your home.

April’s workshop was full of advice on executing short sales, avoiding deficiency judgments, defending foreclosure and protecting your assets and rights. We’ve put together a summary of Oppenheim’s main messages, and look forward to seeing you at the next workshop scheduled for May 5 whether in person or online!

• Sluggish Mortgage Servicers – The government’s Making Home Affordable program is not going to solve this real estate and financial crisis. Banks are too slow and too reluctant to provide homeowners adequate relief.

• Short Sale Savings – Short Sales have emerged as an effective way to avoid foreclosure and save homeowners’ credit, and the government’s new short sale incentives will increase this effectiveness.
  • Oppenheim Law has already executed four short sales for clients THIS WEEK, by the time of the workshop Wednesday night, while successfully defending costly deficiency judgments.

• Cash vs. Pennies – Banks are encouraged to approve short sales and receive immediate cash relief as opposed to modifying loans and earning pennies on the dollar of their initial investments.
  
  • Case in Point – Oppenheim highlighted a letter from Selene Finance offering to pay homeowners $20,000 for moving expenses if they can execute a short sale.

• Know the facts. Deficiency judgments can stay on your record for up to 20 years: Banks may garnish wages and even collect against heirs.

• Oppenheim Law has negotiated reductions in deficiency judgments by as much as 80-85%.

We look forward to hearing your comments on April’s workshop and hope to see you all on May 5 for our next event. Until then, you can check out a replay of the workshop on Oppenheim Law’s UStream Channel. The video will be available through Friday, April 9 at 5 PM EST.

Join Oppenheim Law for the next Free Legal Real Estate Workshop on April 7, as real estate attorney and legal blogger Roy Oppenheim explains the potential government incentives for homeowners to rid their delinquent mortgages through a short sale.

Unable to make it to Weston? Oppenheim Law will broadcast its monthly workshop online through the Oppenheim Law UStream Channel. Participants are invited to ask questions and comment on the presentation through Oppenheim Law’s Twitter account @OPLaw.

What: Short Sales, Deficiency Judgments + More: Free Real Estate Workshop

When: Wednesday, April 7, 2010 – 6:00 to 7:00 PM

Who: Homeowners facing foreclosure, buyers and sellers

Online: The Oppenheim Law UStream Channel

Live: 2500 Weston Road, Suite 404, Weston, FL 33331

Cost: Free with advanced registration

RSVP: To register email roy@oplaw.net or call 954.384.6114

Oppenheim Law looks forward to seeing you on April 7 whether in person or online!

Oppenheim sat down with Asset Protection Attorney Douglass Lodmell for a second time to discuss the specific benefits legal representation can present for homeowners facing foreclosure, attempting a short sale or considering strategic default. We’ve attached the full video at the end of this post.

Oppenheim Law is continuing to defend South Florida homeowners’ deficiency judgments whether the result of foreclosure or improper liquidation and negotiation after a short sale.

“Banks are always going to go after the lowest hanging fruit,” Oppenheim said. “Legal representation and asset protection can make you an unattractive target for the banks and translate into debt settlements for pennies on the dollar.”

Check out the video below to hear Part 2 of Roy Oppenheim’s interview with Asset Protection Attorney Douglass Lodmell and feel free to leave any questions in the comments section of the blog.