Posts Tagged ‘Florida short sales’

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Oppenheim Law Reports Short Sales Up, Saves Homeowners Millions

Monday, August 29th, 2011
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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.
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Posted in Florida Law News, Florida short sales | 1 Comment »

Short Sale Deficiencies Now Illegal in California. What About Florida?

Thursday, July 28th, 2011
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Welcome back to the Divided States of America.

Oppenheim Law has been discussing the chasm that exists in our country between recourse and non-recourse states for years. (Check out Roy Oppenheim’s Op Ed piece in the Sun-Sentinel) It now appears that rift is widening.

In non-recourse states, like California, a lender may not pursue a deficiency following a foreclosure sale for loans that qualify as “Purchase Money Mortgages.” For a loan to qualify as a purchase money mortgage in California, the loan must be obtained at the time of purchase of the borrower’s principal residence. This can also include a second mortgage obtained at the time of purchase. Lien holders of purchase money mortgages are also unable to receive a deficiency judgement against a California homeowner who executes a short sale.

And earlier this month California passed legislation giving even more protection to underwater homeowners. California Senate Bill 458 now provides that even junior lien holders, meaning mortgages not obtained at the time of purchase, no longer have any deficiency rights against the borrower after a short sale.

Recourse states like Florida provide no such protections to underwater homeowners. Banks are able to pursue deficiency judgments against Florida borrowers who are foreclosed on, or even Florida homeowners who execute a short sale. A key aspect of Oppenheim Law’s Florida real estate practice is defending homeowners from deficiency judgments by negotiating with banks during the foreclosure and short sale processes.

Proponents of Cal. Senate Bill 458 argue the legislation brings more certainty to the short sale process and is a valuable protection of homeowners’ rights. They argue that by removing the possibility of a deficiency judgement from the negotiating process, short sales will be executed more quickly and efficiently, helping repair the real estate market.
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Posted in Florida Law News, Short Sales | 2 Comments »

Florida Real Estate’s Mortal Enemy: Excess Inventories

Wednesday, June 1st, 2011
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Florida Real Estate’s Mortal Enemy: Excess InventoriesWhat is killing Florida real estate? Excess inventories and falling home prices.

House prices have been continuously falling for the first time in 70 years, and South Florida homeowners should expect the trend to continue.

A surplus inventory of houses caused by Florida foreclosures and short sales is the mortal enemy of home prices. Lower prices are needed to sell off excess inventories of residential properties, and in turn lower prices encourage more inventories from anxious sellers.

So how big are excess inventories and how long will it take for the real estate market to absorb them?

According to Economic Consultant Gary Shilling, we are currently facing a surplus of up to 2.5 million excess house inventories in the United States, a number that is subject to rise with further foreclosures and falling home prices.

To forecast the length of time to work off this excess inventory and have the market return to more favorable inventory and price conditions, Shilling developed projections of supply and demand for residential units.

Household formation averaged about 900,000 per year over the past decade as measured by the Census Bureau. Shilling uses this number as a reasonable estimate of yearly housing demand. However, with many college students moving back with their parents after graduation, household formation is not happening as fast as it once did.

New construction of single family homes and apartment units is running about 700,000 per year, and about 300,000 U.S. homes are torn down, converted or removed from housing stock each year. Based on these numbers, Shilling calculates new housing supply to be about 400,000.
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Posted in Florida foreclosures, Florida Law News, Florida real estate, Foreclosure Defense, Foreclosure Fraud, Infographic, Roy Oppenheim | 2 Comments »

REMICS – The New Vehicle for Banks to Defraud Taxpayers

Thursday, May 5th, 2011
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Roy Oppenheim Discusses REMICSAs Florida real estate slowly pulls itself out of the foreclosure fraud files; there is finally a government agency standing up to the bully of banks!

The IRS.

Last week, Reuters News Service published an exclusive article exposing yet another way the banks have been defrauding taxpayers. This time it wasn’t directly through improper lending practices, robo-signing or bad assignments of mortgage.

Now, the IRS discovered that banks acting as servicers for “REMICs”, otherwise known as Real Estate Mortgage Investment Conduits, have been claiming tax-exempt status on the income they generate under favorable tax code provisions.

So what is a REMIC? A REMIC is a passive entity where mortgages are pooled and securitized into investments. Generally, the investors in REMICs are large funds, pension plans, and 401ks.

Not only did the banks failed to comply in any manner with the requirements of the Internal Revenue Code that allow this favorable tax treatment, they have apparently decided to ignore the IRC altogether.

So what does this mean for taxpayers?

It means that the banks have been systematically ignoring IRC provisions, thinking the IRS is too sheepish to enforce the law. These entities, as a result of the actions of the banks servicing the mortgages, have failed to pay billions of dollars in taxes, and robbed the government, and thus the American people, of that money.

The reason that REMICs were afforded this massive tax break is due to the fact that they are meant to be vehicles for passive investing, and as such they have rules for strict compliance that require that all mortgages passing into a REMIC must be transferred into a trust within 90 days of trust formation.
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Posted in Reuters | 2 Comments »

Banks Desperately Seeking Short Sales

Sunday, April 17th, 2011
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Banks Desperately Seeking Short SalesThere 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.

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Posted in Deficiency Judgements, Florida foreclosures, Florida Law News, Florida real estate, Florida short sales, Foreclosure Defense, Roy Oppenheim, Short Sales | 2 Comments »

Elm Street or Main Street: Roy Oppenheim on Foreclosure Nightmare on Main Street

Monday, March 28th, 2011
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Foreclosures are back… just like Freddy Krueger. Just like in the horror films when things start to calm down and get back to normal… out pops Freddy Krueger again to scare the living daylights out of you.

Well, that seems to be the case here in Florida as it relates to real estate and foreclosures. The news this past week has been that median prices have increased by approximately 22 percent in the past year in South Florida and sales of homes actually also has increased 12 percent from last year.

During the past six months, however, there has been a drastic reduction in the number of foreclosures that have been processed and brought to market due to the fraud-closure crisis that became apparent last fall.

Fast forward to today and we’re seeing the resurgence of the foreclosure crisis. Many of the foreclosure mills have shut down and are being replaced by new firms, many of whom will not process as many cases. Just in the past ten days we have seen an increase in the number of people served in foreclosure and the scuttlebutt is that the process this time around will be faster and more furious.

The unfortunate aspect of all this is just as the real estate market was starting to find its footing, and some even would say slightly rebound, these new foreclosures will either reduce the price of existing real estate or, in fact, bring down prices another 10 or 20 percent. Of course no one knows for sure how buyers will react. Will such additional foreclosures encourage even more buyers to come into the market because they’re getting even a better deal – or will the number of buyers in the market be somewhat fixed or stagnant; increasing supply and reducing the market price of homes?
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Posted in Florida foreclosures, Florida real estate, Foreclosure Defense, Foreclosure Fraud, Roy Oppenheim | 1 Comment »

Broward County Order Gives Homeowners Short End of the Stick… Again

Wednesday, March 23rd, 2011
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Broward County Order Gives Homeowners Short End of the Stick… AgainBroward County homeowners now face an additional hurdle when trying to complete a loan modification or short sale to avoid a Florida foreclosure.

In Sun-Sentinel reporter Paul Owers’ blog House Keys, Owers discusses the ramifications of Broward County now requiring 10 days’ notice to cancel residential foreclosure auctions according to an administrative order signed by Broward Chief Judge Victor Tobin.

Prior to the Administrative Order, Broward foreclosure auctions could be cancelled only hours before the sale. Now, homeowners looking to cancel a home foreclosure in Broward County are forced to file a motion and be scheduled for a hearing at least 10 business days before the foreclosure sale date.

Oppenheim Law Real Estate Attorney and Legal Bogger Roy Oppenheim was quoted in the article saying, “This will have unintended consequences. Clearly, the homeowner gets the short end of the stick here.”

Effectively, this order limits the time homeowners have to negotiate a short sale or loan modification before their home is put up for auction. Before the order, these deals could be completed up to the last minute.

This order appears to be an attempt to eliminate the backlog of foreclosure cases by limiting the number of homeowners who cancel their foreclosure auctions.

“Roy Oppenheim gets it, and I agree with him,” said Ronald Scott Kaniuk in a comment to the blog. “Courts throughout the state are trying to expedite foreclosures in the mistaken belief that completing foreclosures – even if the process is flawed, improper or ill-advised – is better than having cases continue to proceed on a normal track like any other litigation.”
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Posted in Florida foreclosures, Florida Law News, Florida real estate, Florida short sales, Foreclosure Defense, Short Sales, Sun Sentinel | 2 Comments »

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