A couple weeks ago, I posted a summary of my appearance on the nationally syndicated Randi Rhodes radio show. I talked about how Oppenheim Law is helping South Florida homeowners fashion their own foreclosure bailouts and also discussed the deterioration of the social stigma associated with Florida foreclosure.

You can hear the interview by checking out the Oppenheim Law Facebook Fan Page, or by clicking on the link below:

Attorney Roy Oppenheim Discusses Florida Foreclosures on the Randi Rhodes Show

We also wanted to post the full transcript of the radio interview.  There are some very interesting discussions about the newest Florida foreclosure defense strategies Oppenheim Law is using to help clients stay in their homes, as well as commentary on the responsibility of homeowners to be proactive and fashion their own bailouts.

I hope you enjoy reading or listening to the interview as much as I enjoyed participating.

Roy Oppenheim on Randi Rhodes Show: Florida Foreclosure Defense

Angela:           Welcome back to Randi Rhodes on the Premier Radio Networks.  Randi is out today so we’re filling in for her.  We are Frangela. That means me, Angela V. Shelton.

Frances:         And her very best friend, Frances Callier.

Angela:           That’s right.  We just smushed our names into one and got Frangela.

Frances:         That’s for you.

Frances:         Yes, it is and we’re gonna switch topics a little bit but it’s still stuff that really concerns us all.  We read a really great article this morning from the Miami Herald, Homeowners Walking Away From Underwater Mortgages and the discussion of people literally saying, “you know what?  I paid…” Here’s a story that the gentleman they talked about in this article, Andre Dukay who thought that he got a real steal when he paid $125,000 for his condo but four years later, similar units were selling for $35,000 or less. So he was faced with the prospect of being underwater in his mortgage, owing more than the unit was worth.

Angela:           Which is happening all over the country.

Frances:         Yes.

Angela:           And we talked earlier if you were listening into the Randi program earlier, I’m from Detroit and, you know, the, the median – that is the average value of a home there was recently listed at somewhere around $7,000.00.

Frances:         Mm hmm.

Angela:           Which is devastating.

Frances:         That’s right.

Angela:           There’s nothing you can do about that.

Frances:         And the reality is that this gentleman had to make the consideration.  He’s 33 years old and he was saying for the next 20 years of his life, he was going to have to pay this overprice for this mortgage. So what he decided to do was cut and run.

Angela:           That’s right

Angela:           ‘Cause that was the best option to him –

Frances:         Option.  Yes.

Angela:           Apparently in Florida as a state, they have a huge foreclosure problem and we’re very honored and happy to have Roy Oppenheim here on the line for us today to talk about this and to talk about he has – at the Oppenheim Law Firm where he – they are the lead defense – one of the leaders in defending people against foreclosures.

Frances:         Welcome, Mr. Oppenheim.

Roy:                Hi Frangela.

Angela:           All right, Mr. Oppenheim. (laughing) Thank You.

Frances:         Hi.  Thank you so much for joining us here on Randi Rhodes today.

Roy:                The honor is really all mine.  Thank you for having me.

Angela:           So, what’s the deal in Florida?

Roy:                Well, the deal is that so many people are upside down or under water that they have to make a very rational decision of whether or not they’re gonna keep paying for a mortgage that far exceeds the value of their home or if they’re going to fashion their own bailout.

Frances:         Yes.

Roy:                There is an enormous amount of frustration among taxpayers in terms of bailing out the large banks that thought they were too big to fail, and people are saying, “I have to do what’s best for me and for my family.”

Angela:           I love the language that you’re saying, crafting your own bailout because it seems as though we’re the only people who are gonna save ourselves.

Roy:                You know, from Day 1, even before Obama became president and Bush was going out, we started representing people and said listen, ‘You have to have your own lifeboat. You have to figure out how you’re gonna do what’s best for your family, and you can’t wait for the ark to come and pick you up. And you’re gonna have to build your own arc and fashion your own bailout.’ And we have become literally, in a matter of months, the folks that try and customize individual bailouts for different families based on different circumstances. It’s not one size fits all.

Frances:         Well, thar was gonna be my next question. Okay so say I’m living somewhere in Florida or some place else in the country and I’ve got this massive bill, mortgage that’s coming in. I’m unemployed and I’ve got a house that I originally bought for $300,000 and it’s devalued down to $75,000. What do I do?

Roy:                Okay. You do have lots of options.  One option is cut and run, meaning to just move out, which we don’t advise.  We would either tell people –

Angela:           Right.

Roy:                – to hunker down and defend themselves or in the alternative to try and do a mortgage modification or something that’s brand new that we’re really just working on right now and that is a short refinance where another bank comes in and actually takes out your old loan but at a much lower amount so there’s substantial principle reduction in that loan and you can now all of a sudden live there again and start paying your mortgage and not be a deadbeat.  The third option –

Angela:           Ahhh.

Roy:                – The third option is to do a short sale, to sell the property at its market value, give the bank, you know, if – in Mr. Dukay’s situation you’d probably be able to sell it for $30,000 or $40,000 or $50,000, give the bank $30/$40/$50, still maybe owe the bank $100 but the bank will be thankful that he did this. Some banks now and I know you’re not gonna believe this – will give you a bonus at closing for actually having effectuated a short sale, and we just did a closing the other day where a family got a $550 bonus for actually short selling their home notwithstanding the fact that the bank had taken a loss of maybe $100/$150,000.

France:           Right.

Angela:           Wow.  Wow.  You know, one of the things that’s very interesting about the changing psychology of the United States of what’s going on in the last few years, there was a time when, you know, when our credit rating and it’s still very important to all of us of course, but people are literally saying I don’t mind this being on my, on my credit report.

Roy:                I’m gonna take issue with you with what you just said and don’t take it personally – I believe that high credit scores are the equivalent of cigarette smoking in the 1950s.  I believe that we’ve been duped to believe that we all should have–

Angela:           Yep.

Roy:                – high credit scores.

Angela:           Thank you.

Roy:                High credit scores is what caused this problem in the first place.  I know it may seem upside down and inside out but if you didn’t have a high credit score, you couldn’t have gotten to this problem in the first place.

Frances:         Right.

Angela:           You know what, I so agree with that.

Roy:                I mean, it’s just like smoking, I mean we all thought that, you know, airline pilots should smoke, our soldiers should smoke…

Angela:           Doctors were smoking.

Frances:         It’s healthy for my baby.  What are you talking about?

Roy:                I really, really see the analogy and I tell my kids that I don’t want them to have credit.  I don’t want them to have high credit scores.

Frances:         Yeah.

Roy:                I don’t want them to get into a situation like my clients are in.  You are sold a bill of goods to think that you should have a high credit score so you can overindulge, you know, in credit and this is where we’re left off.

Frances:         Interesting.

Angela:           Okay.  I think you’re right.  It goes back to a time when people, you know, I don’t want to sound like old timey but you bought a house you could afford not a house as an investment property or, you know…

Frances:         Or a lifestyle choice but you’re like I can afford this property.

Roy:                I am so happy you’re saying it.  There are two trends I want to point out to you that right now even though most people use plastic to make a purchase, two thirds of those plastic purchases today are no longer credit cards but are debit cards.  Money that’s actually sitting in people’s bank accounts.  That is a major shift that we’ve seen in the last maybe 24 months.  The other thing –

Angela:           Yes.

Frances:         Mm hmm.

Roy:                – layaway has become big again.  I mean, layaway, people don’t remember what layaway is –

Frances:         Yes!  From the seventies.  I couldn’t believe – you know, and it’s so interesting I come from a community where when I grew up, people would go and put shoes on layaway and then when you got – when we got older, it was a mark of being poor, you know, was equate – people equated it with being poor and that you then needed a credit card so that you could go and buy those shoes immediately.

Roy:                Toys R Us is doing a big volume right now –

Frances:         Yes.

Roy:                – on layaway.

Frances:         I think, K-Mart is too, or Sears, one of them they’re doing a huge ad campaign about, you know, hey, start buying your Christmas presents now with the money, you know, and pay for it as you go as opposed to buy now, pay later.

Roy:                But this is good and so the idea of a high–

Frances:         Yes, great.

Roy:               –credit score is bad and –

Angela:           Yes.

Roy:                The idea that people should establish this credit card so they can go and buy the house they can’t afford is a disaster.

Angela:           Yes.

Frances:         Mm hmm.

Frances:         One of – now, I know that if – I’ve heard – we’ve all heard a lot of people complain about the so-called mortgage relief and, and having a lot of trouble getting through these programs and having like I happen to know – I have friends and family who have a lot of difficulties dealing with Citi Group taking eight months to address the mortgage relief and then refusing it or denying it after they’ve quote unquote destroyed their credit.

Roy:                The mortgage modification process has been a disaster and –

Frances:         Yes.

Roy:                – You know, the Obama administration had expected 5 or 6 million modifications to have come through at this point in time and they’re lucky if they’ve seen maybe 500,000 go through.  They’re off by 90 percent.

Frances:         Wow.

Angela:           Yeah and it – it’s – what can you do when you’re in that situation? I have family members in this situation.  Eight months in and then they’re hearing no, we’re not gonna give it to you.

Frances:         Right and then we’re told don’t pay it for three months ’cause you got to be in default to get this.

Roy:                It’s unbelievable and the government has perpetuated it.  There are –

Frances:         Yes!

Roy:                –government loan programs – I, I think FHA and Fannie Mae – their guidelines say that you must be anywhere between 2 and 12 months in arrears or they’re not even considered and they’ve published –

Frances:         Right.

Roy:                – and if you don’t believe me you can go to my blog – South Florida Law Blog and we have actually published those standards because we think it’s the most absurd and perverse thing we’ve ever seen in our life.

Angela:           Exactly because the idea was to help you, but instead so in this case that I’m talking about this person has a Citi Group… Citi Group bought their mortgage or whatever, they go for the mortgage modification, meet all the requirements, they’re being told yes, yes, yes.  They do what they have – they’re told to do, they go into arrears or whatever to not pay for two months, their credit rating gets “destroyed” and then they come back and get told they’re not going to get the modification and so – and then they’re told oh, the only way you can complain is to talk to the representative in your state but there’s no representative in their state.

Roy:                You get the royal runaround and unless –

Frances:         Exactly.

Roy:                – And unless you’re gonna treat this as a full-time job or hiring someone like our firm, you will not get it.  If you treat it as a full-time job, you can get it done but short of that, you will not get it done because they will –

Angela:           Wow.

Roy:                – run you into the ground in some sort of systemic way to make sure that if you get through, they’ll lose your file and the people you were talking to will, will all of a sudden not be there or they’ll be in India or they’ll be somewhere else –

Frances:         Exactly.

Roy:                – ultimately you – it just doesn’t go through.

Angela:           And they’ve been offering this new thing. So they say no to the mortgage modification and then they come up with oh but we’ve got this other plan where we’ll reduce – we’ll give you kind of a break for two or three years and then it’s right back to where you were.  Have you heard anything about this or –

Roy:                Yeah, yeah, some cases that they are giving some sort of a – I guess you can call it a moratorium or -

Angela:           Right.

Frances:         Yes.

Roy:                – whatnot and, and that’s really not a bad situation ’cause I mean for two years you can live in your house and, and your outlay isn’t as bad and in two years, you can start to faction your own bailout again.

Frances:         Right.

Roy:                A lot of this I think is a question of how do you run out the clock. How do you stay in your home for as long as possible and thereby not affecting your family’s day-to-day activities. And I think psychiatrists actually paid us the most because we assume that people who come in depressed, they haven’t been able to sleep, they got bags under their eyes –

Frances:         Right.

Roy:                – and when they leave, they’re laughing, they’re happy. They get off all their anti-depressants, and they stop losing hair, and they get on with their life.  One of the things we, we try to do is let people know that, you know, this moral stigma that used to exist about going into foreclosure –

Angela:           That’s right.

Roy:                – It’s not that I created it, I just – I’m just saying that it’s not a stigma anymore.

Angela:           We want to talk some more about this we have to take a quick break here but we hope you can stay on the line.

Frances:         We are talking to Roy Oppenheim who is giving us incredible advice here about some people just cutting and running and, and getting out of their – creating their own bailout.  The number here is 866‑877‑2634.  We are Frangela sitting in for the fabulous Randi Rhodes on the Premier Radio Network.

Angela:           Welcome back to Randi Rhodes on the Premier Radio Networks.  Randi is out today so we’re very honored to be filling in for her.  We are Frangela.  That means me, Angela v. Shelton.

Frances:         And her very best friend, Frances Callier.

Angela:           That’s right, just Frangela.

Frances:         Frangela.

Angela:           It is 22 minutes past the hour and we are, we are talking to, we’re talking to Roy Oppenheim who is an attorney in Florida about home foreclosures and what you can do and what our options are and so we want to make sure we still got him on the line.

Frances:         Yes.  Hi, Roy.

Roy:                I am still here, Frangela.

Angela:           Thank you.  So, you know, before the break, you were talking about the stigma of that people are going through or have gone through in the past about, foreclosure.

Roy:                Sure.

Angela:           And I would like to get back to that.

Roy:                I don’t think that the social stigma of, of being in foreclosure is what it used to be.

Frances:         Mm hmm.

Roy:                In Florida alone, we now have maybe as many as 26 or 28 percent of people in South Florida who either are behind or are in foreclosure.

Frances:         Oh, wow.

Angela:           Wow.  That’s terrifying.

Roy:                Except maybe one other little town on the west coast of Florida it is the highest rate in the United States.

Frances:         Mm hmm.

Angela:           That’s amazing.  So, really, at the end of the day, where people in the past would be trying to keep it very close to the vest, their issues, their financial issues and problems, it’s you just, walk down the street and there’s five, six other people on your block just like you.

Roy:                That’s right and I think if you study social networks you’ll see that foreclosures work like social networks. So does divorce for that matter. And that is that when you have someone who’s in foreclosure the moral stigma is reduced because you have a sense of kinship.

Angela:           Yes.

Frances:         Mm hmm.

Roy:                Just like when people get divorced a lot of times a bunch of divorced women or divorced men kind of hang together, and it reduces the social stigma of divorce.

Frances:         Yes.

Angela:           So what do you do when somebody comes into your law firm and they come in and you were talking earlier about feeling like people, can get some relief from this – what is – can only be the most stressful thing to go through which is going home every night and not knowing how long you’re going to be able to be in your home.

Frances:         Mm hmm.

Angela:           And, and not knowing what to do. What do you do when somebody first walks in?

Roy:                Well, first of all, we try and look at this a little bit more holistically, and until now, this kind of an attorney practice or law practice didn’t really exist.  What you try and figure out is how are you going to keep someone in their home?

Angela:           Right.

Roy:                And so usually that’s gonna mean they’re gonna stop making payments but, but having said that –

Angela:           Wow.

Roy:                – you then want to look and see what kind of culpability the bank has had or the various parties that helped create the loan in the first place and that will allow you to, to definitely give the person some leverage in trying to figure out what their bailout is going to be and ultimately –

Frances:         Mm hmm.

Roy:                – they’re gonna probably have four options.  One is they can just stay and fight ’til the end and then if and when they lose, they leave, or at some point they can try and modify or refinance the loan hopefully reducing the principle. And it’s funny because I’ve been quoted at various times as saying that it’s an urban legend that you’re gonna see real principle reduction in mortgage modifications.

Angela:           Right.

Roy:                Until recently I believed that was accurate and now what we’re starting to see is all the banks want to do is get as much money back from these properties as possible –

Frances:         Mm hmm.

Roy:                –Cut their losses and run so as much as the homeowners are running, the banks want to run, too. And the reason they want to run is they don’t want to be stuck with a property that they have to do the following:  they don’t want to pay the taxes –

Frances:         Mm hmm.

Roy:                – they don’t want to pay the homeowner association assessments, they don’t want to pay the pool guy, they don’t want to pay –

Angela:           insurance

Roy:                – the bug guy, they -

Frances:         Yeah.

Roy:                – don’t want to pay for the landscaping and they don’t want to –

Angela:           Right.

Roy:                – be responsible for the kid that drowns in the pool which has already happened.

Angela:           Exactly.

Frances:         Wow.

Angela:           Yes, especially with that many foreclosures, how could you even keep up with that?

Frances:         Yeah, manage all of those properties.

Roy:                It’s an unbelievable mess so for the bank’s perspective. They’re better off trying to figure out how to keep the person there, even though modifications is not the way to do it –

Frances:         Mm hmm.

Roy:                – But a short sale, if they leave and put someone else in there that works or finding another financial institution that’s willing to come along and lend the person the money equal to what the short sale amount would be.

Angela:           Right.

Roy:                And that’s just starting now and, and there we are starting to see substantial principle reduction just like in a short sale.

Angela:           Right.

Roy:                What I was gonna say is until recently I really think that the federal reserve and the banking system had a reluctance with keeping people in their homes if their mortgage was gonna be substantially reduced.  I’m not just talking about taking interest from 8 percent to 4 percent.

Frances:         Right.

Roy:                I’m talking about lopping off $150,000.00 in principle off their mortgage.

Frances:         Right.

Angela:           That was my next question was – do you think that there is gonna be a time that – where we kind of auto correct the housing crisis and talk about the true value and getting people to pay – having the opportunity to pay what the house is actually worth now?

Roy:                I think that is happening and the reason that the banking system didn’t want to do that is something called moral hazard.

Frances:         Mm hmm.

Roy:                It’s a term that means if you let people do bad things, they’ll continue to do bad things.  So, for example the reason they let Lehman Brothers fail was because they didn’t want all the other banks to think that the government would continue to bail them out.  Having said that, what did the government do?  They bailed out all the banks.

Angela:           Roy Oppenheim, you have been fabulous.  Thank you so much.

Frances:         Thank you so much, from Oppenheim Law –

Angela:           Yes.

Frances:         – We appreciate you coming on with us.

Angela:           Yes.  Yes, yes, yes.  Thank you so much.  You have been listening to Frangela filling in for the incredible Randi Rhodes right here on the Premier Radio Networks.  The numbers here are 866-877-2634 or 866-87-Randi with an I.  We’ll be right back.