What can Florida homeowners learn from the wealthy when it comes to strategic defaults? Oppenheim Law discusses strategic default August 4 at 6 PM during the next Free Strategic Foreclosure Workshop.

According to The New York Times, more than 1 in 7 homeowners with loans in excess of a million dollars are seriously delinquent compared to 1 in 12 for mortgages below the million-dollar mark. These numbers indicate many of the country’s wealthiest homeowners are strategically dumping their financially draining properties, just as they would any sour investment.

What: Strategic Defaults: What Can We Learn from the Wealthy?

When: Wednesday, August 4, 2010 – 6:00 to 7:00 PM

Who: Homeowners facing foreclosure or underwater mortgages, real estate professionals, buyers and sellers

Where: The Oppenheim Law Online Stream

Or come in person: 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

Attend the event in Weston, FL or watch from the comfort of home. Oppenheim Law will broadcast August’s Strategic Default Workshop online through the Oppenheim Law Strategic Default Channel. Participants are invited to ask questions and comment on the presentation by registering for a free account with our streaming service.

Check out the video below for a preview of next week’s workshop. See you then!

Specifically, they are requiring mandatory mediation for all homestead property in every county in the State of Florida. Right now, only a few counties including Miami Dade and Palm Beach County have mandatory medication. The report states that in those counties where there has been mandatory mediation, approximately 75 percent of all cases are settled in mediation. Further, the Task Force is recommending that there be pre-suit mediation in order to reduce the clogging of the court system. The Task Force is also requiring that the banks– not the borrowers— pay for the mandatory mediation.

The Report also mentioned that mortgage modifications are becoming more effective. In fact, they mention that in those loans that have recently been modified, there has been a drop in the re-default rate by 31 percent. Further, they indicated that loan modifications overall increased 55 percent from the fourth quarter of 2008 to the first quarter of 2009 and increased 173 percent over the past year.

The Task Force also took great issue with a number of tactics that have been used by the banks’ attorneys. Specifically, in relevant part, the Task Force stated: “A leading plaintiff’s lawyer and a major plaintiff’s law firm have been the subject of a public reprimand and sanctions due to untruthful filings with the courts. Judges continue to see affidavits of amounts due and owing signed by law firm employees, and cost affidavits charging very high service of process fees for process serving firms owned by the law firm principals. To some extent, it is fair to be concerned whether the press of the caseload is interfering with a judge’s ability to police the conduct of the firms before them in these usually uncontested, unopposed foreclosure cases.”

In essence, the Task Force is stating that because of the sheer volume of cases, judges have not been able to necessarily fulfill their judicial responsibilities to the fullest extent under the law. In fact, the Task Force stated, “Judges should also recognize their responsibility to ensure that in uncontested cases the necessary evidentiary basis has been laid for the entry of Summary Judgment. In particular, judges should take every step to insure that the original note is produced, that the note is held in due course by the plaintiff with a right under the note to foreclose, and that the note is canceled upon entry of the final judgment. … Further, judges should to the fullest extent possible, control the behavior of lawyers before them through sanctions and attorney fees where there has been noncompliance with the Rules of Civil Procedure and with local rules requiring communication.” Thus, the Task Force is further acknowledging that judges must do a better job to police the conduct of lawyers before them.

LOST NOTE CLAIM AND REQUIRED VERIFICATION OF COMPLAINT

Probably the biggest change in addition to the mandatory mediation will be the requirement that the banks verify their complaints. That means that the banks must under oath state that the facts in the complaint are true. Simply put, the banks can no longer say that their note is lost or stolen if in fact they subsequently are able to find it. Since they have verified the complaint they will not be able to continue such a business practice. In fact, the Task Force states that such a pleading of a lost note is effectively a “prophylactic” which is filed in most actions by the banks’ attorneys who are handling a high volume of foreclosure cases. The Task Force took umbrage with this practice and stated, “This practice leads to confusion among defendants because they may not recognize the entity suing or be aware that this entity now owns or services the loan.”

In essence, the Task Force may be suggesting that continuing to plead a lost note when a note in fact is not lost may be an unfair and deceptive trade practice. While it is unclear if the banks have been pleading the lost note because they are not sure if they own the note or rather because they have tried to create confusion may or may not be relevant. What may be relevant is the fact that they knew or should have known that making a lost note claim, when the note in fact is not lost is a systemic, unfair and deceptive trade practice.

So now it is up to the Florida Supreme Court to adopt the final report and recommendations on residential mortgage foreclosure cases by the Task Force. I am hopeful that based on the diligent work that has been done by the task force that the Florida Supreme Court now does what is right and best both for the court system in the State of Florida as well as for all those of us who have property interests in Florida.

While it is generally well accepted that men would rather have their favorite shoes fixed than buy a new pair, it’s now women’s shoes that are also piling up for repair. While the WSJ chose not to get into the gender issue concerning shoe repair, I thought the major behavioral shift was extremely foretelling and even foreboding.

For one, this notion suggests that either women on their own or by subtle influence from their male counterparts are becoming frugal or financially desperate or both. Now, a Channel shoe that requires a new strap or heal gets fixed instead of given to Goodwill and Fendi pocketbooks that require a few stitches or a new zipper get repaired instead of ditched.

So what does this shoe analogy mean for our nation? As a foreclosure attorney, I see it like this. Shoe repair rather than purchase reflects that our savings rate is going up as a nation, as was just reported by the New York Times today. While, ordinarily that would be good news, it’s not. Increased savings means people are spending less at the malls (2008 was the worst holiday shopping season in 30 years), which means failure of local stores and decreased sales in malls and in turn, our economic crisis will first only worsen.

Residential and commercial foreclosures in Florida will continue to rise, as more and more people are fired (Macy’s yesterday). People will have less disposable income and thus will have to do with what they got — like old shoes! In fact, at my shoemaker they hired a seamstress last June so people could take out or in waistlines and lengthen pants for the kids. Certainly, the increase in shoe repair is only one of the numerous signs that American’s are finally getting the message.