Posts Tagged ‘mortgage modification’

Oppenheim Law Argues for “Meaningful Principal Reduction” in The Miami Herald

Friday, January 29th, 2010

MiamiHerald

In case you didn’t hear, the Obama administration announced changes for requirements of paperwork and documents regarding the Making Home Affordable on Thursday, hoping to improve the success rate and communication between homeowners and lenders.

While this bureaucratic decision may indeed help a few more modifications squeeze through the banks clenching hands, ultimately, the change that is needed for South Florida homeowners requires substantial principal reduction on underwater mortgages.

Oppenheim Law has been arguing for over a year that there are too many mortgages valued greater than the actual market worth in South Florida, and merely lowering interest rates and extending the life of loans will not do enough to solve the Florida foreclosure problem.

To read my thoughts on the latest Home Affordable Modification Program changes, check out the entire Miami Herald article, “Home-loan aid altered” in the Oppenheim Law News Room.

From the trenches,

Roy

Obama Administration Implements New Guidelines to Assist Short Sales

Wednesday, December 2nd, 2009

While mortgage modifications continue to be a huge problem for the Obama administration, they seem to be following the advice of the geeks at the Federal Reserve and from the folks in the “Trenches“. (See WSJ Article).  You are eligible to do a short sale if (1) you have a government backed loan (Fannie, Freddie, VA, etc.), (2) its your primary residence, (3) you have been turned down for a modification, and (4) you have had the property listed at market price. That means you may get $1,500 from the government upon closing and you get to Walk Away! No Deficiency!  Learn more about alternatives to foreclosure and defenses to foreclosure at our seminar tomorrow night at 6:00 p.m.

The New Normal… NYT Reports: Expect Four Million More Foreclosures Despite Obama’s Mortgage Modification Policy

Friday, October 9th, 2009

In today’s New York Times (10/9/09) the lead story in the Business section is: “In Trial Phase, Mortgage Bills Fall for 500,000. Is that supposed to be good news or news at all? I am not sure. I guess it depends on whether you think the glass is half full or half empty.

The reality is that by now the Obama administration had anticipated (or promised) about 5 million modifications: not 10 percent of that number!

So the real news is that Mark Zandi, chief economist at Moody’s and one of the top real estate prognosticators in the US is fully anticipating another 4 million foreclosures, as reported in the article today. Now I call that News. That’s right four million! Thus, one can expect at least 35% of those foreclosures to occur right here in Florida.

Further Peter Goodman, the NYT’s reporter failed to actually discuss the percentage decrease that occurs s in modifications or whether there was material principal reduction to date. Well I will tell you: the average successful mortgage modification is between 20%-22%. Little if any principal is reduced. Thus we can anticipate that many of these half million modifications will become part of the 4 million in foreclosure. In fact, based on prior studies, modifications without principal reduction lead to foreclosure half the time.

So don’t expect real estate values to start increasing any time soon as long as folks keep losing their homes. Yes, the economy is no longer in free fall and things are better than last fall: Stock market is rising, retail sales have stopped falling and job losses are decreasing. However, until people are employed and can afford their houses payments again and there are meaningful principal reduction or forbearance of underwater equity nothing much will change. The folks who brought us this mess: the politicians and regulators in Washington, the “bright minds” on Wall Street and the banks, will have to first realize that keeping people in their homes is better for them and for the rest of us too. Welcome to the New Normal.

From Deep in the Trenches,

Roy Oppenheim

The Florida Supreme Court Task Force on Residential Mortgage Foreclosure Cases speaks out: Chastises Banks and Banks’ Attorneys.

Monday, August 17th, 2009

Today, the Florida Supreme Court Task Force on Residential Foreclosure Cases issued their final report.  While the report is over 50 pages in length, they are making a number of very important recommendations that should help Florida homeowners.

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.

White House is Prodding Mortgage Servicers to Modify More Loans

Monday, July 13th, 2009

It looks like mortgage servicers are going to woodshed for deliberately not modifying mortgages and allowing foreclosures to sore! its about time!  Here is the letter that Treasury Secretary Timothy Geithner and Housing and Urban Development Secretary Shaun Donovan sent to 25 mortgage-servicing firms last week:

“We are writing to you as a participant in the Administration’s Making Home Affordable (MHA) program. As you are aware, the Home Affordable Modification Program (HAMP) under MHA is designed to help responsible but at-risk homeowners modify their mortgages in order to lower their monthly payments to sustainable levels and avoid foreclosure. This program is a critical part of our collective effort to stabilize the housing market and promote economic recovery.

Since we published our detailed guidance, we have started to see a significant ramp-up in the number of trial modification offers and trial modifications underway. However, much more progress is needed. There appears to be substantial variation among servicers in performance and borrower experience, as well as inconsistent results in converting trial modification offers into actual trial modifications. We believe there is a general need for servicers to devote substantially more resources to this program for it to fully succeed and achieve the objectives we all share.

In order to assess our progress under the program and improve the speed of implementation, we request that you designate a senior liaison, with whom you have regular contact and who is authorized to make decisions on behalf of you as CEO, to work directly with us on all aspects of MHA. We will invite this person to meet with senior Treasury and HUD officials on July 28 to discuss full implementation of the program. To prepare for that meeting, we ask that your liaison send us a letter by July 23, detailing specific steps that your organization will take towards effective implementation and compliance. Similarly, we invite you or your liaison to provide suggestions on ways that we can improve program design.

In conjunction with this meeting, we plan to take three important steps to improve the program’s performance. First, we will begin publicly reporting results under the program. By August 4, we will begin issuing monthly reports with servicer-specific performance measures, including the number of trial modification offers each servicer has extended to eligible borrowers, the number of trial plans that are underway; the number of final modifications, and eventually, the long term success of those modifications. The purpose of these reports is to provide a transparent and public accounting of individual servicer performance as well as overall program performance. We will discuss with you the content of these reports at the July 28 meeting.

Second, we will work with servicers such as you to set more exacting operational metrics to measure the performance of the program, such as average borrower wait time for inbound

borrower inquiries, the completeness and accuracy of information provided applicants, document handling, and response time for completed applications.

Third, in order to minimize the likelihood that borrower applications are overlooked or that applicants are inadvertently denied a modification, Treasury has also asked Freddie Mac, in its role as compliance agent, to develop a “second look” process pursuant to which Freddie Mac will audit a sample of MHA modification applications that have been declined. Freddie Mac will coordinate with servicers such as you to address specific cases that arise and to address general operational weaknesses where errors prove more systematic.

We are asking that all servicers expand servicing capacity and improve the execution quality of loan modifications in order to help the sizable number of homeowners at risk of foreclosure and eligible for the program. This will require adding more staff than previously planned, expanding call centers beyond their current size, providing an escalation path for borrowers dissatisfied with the service they have received, bolstering training of representatives, developing extra on-line tools, and sending additional mailings to borrowers who may be eligible for the program.

We are confident that together we can improve the speed and efficacy of the MHA program in a manner that is consistent with your aims as a leading financial institution.

Our shared goal must be to make the program as successful as possible in keeping Americans in their homes and providing stability to the housing market. With your continued help, we believe that we can achieve this goal.

Sincerely,

Timothy F. Geithner Shaun Donovan”

http://www.washingtonpost.com/wp-dyn/content/article/2009/07/09/AR2009070902928.html

Change is in the Air: White House Holds first Passover Seder and Obama takes on Role as Mortgage Broker in Chief

Friday, April 10th, 2009

Today, as many of my friends celebrate Good Friday and I continue to celebrate Passover, my office is a virtual ghost town. So I actually had a moment to take stock on changes that are occurring in our collective lives. First and foremost it is just hard to believe that the White House held a Passover Seder last night. http://thecaucus.blogs.nytimes.com/2009/04/09/obama-to-host-seder-dinner/ The Seder is the ceremonial meal whereby Jews retell  their miraculous story of their departure from Egypt while having a rather long ceremonial meal conducted in a certain order.  In some ways the Passover story can serve as an allegory for the Obama Administration in that just over a year ago it would have seemed that only by a “miracle” would we be sitting here right now with our first African American President.

President Obama Hosts First Ever Passover Seder at the White House

President Obama Hosts First Ever Passover Seder at the White House

Further, as someone deeply entrenched in the real estate economy, as a foreclosure defense lawyer and owner of Weston Title, I would never have envisioned a sitting President calling on homeowners to refinance their homes.   And yesterday that is exactly what the President did! http://online.wsj.com/article/SB123932215927307049.html The President explained the low interest rate climate created by the Bailout and how families can actually create their own stimulus of the economy by pumping back the money they save through refinancing– directly into the economy.

But even before the President gave his three cheers to mortgage refinancing, we have been seeing an up tick in activity in the real estate market in general and in terms of banks contacting us to help them close their refinances. In fact, earlier in the week, I thought for a moment it was Christmas when all the phone lights on my office phone were lit up like a Christmas Tree. I had to use my cell phone to call out of the office.

The buyers who are closing are bottom fishers looking for great deals from short sales, foreclosures, builder specs and generally first time home buyers who have now concluded that buying is cheaper than renting.  Some high end buyers are anticipating a wave of inflation that may be here sooner than any one can imagine.

So with all the change that is going on… one thing that has not changed– and will not change is how capitalistic market forces that are merely reflections of our collective greed and fear are  working well once again.

Have a great weekend!

Spot Light on Real Estate Bail Out Workshop

Wednesday, April 1st, 2009

Watch WSVN Tomorrow for Insider Information on Short Sales, Mortgage Modification & Refinancing

@WSVN’s Daisy Rodriquez spearheads a story on what options homeowners have when it comes to their personal real estate bailout. The Channel 7 News team came to my office on Monday to get my legal perspective on South Florida’s foreclosure crisis and homeowner bailout advice.

While not everyone is in foreclosure, there’s no doubt that a good majority of homeowners have issues; whether it be upside-down on loan to value, mortgage rate adjustments spinning payments out of control, short sale red tape and banking nightmares, or just treading through the simple option of refinancing when the comps are getting killed by neighbor foreclosures.

Reality check: Florida is ranked the second highest foreclosure state in the U.S. and Fort Lauderdale a staggering No. 6 nationwide, there is no shortage of homeowners who need a bailout plan.

What can you do? Watch the segment on WSVN’s Channel 7 http://www.wsvn.com/ scheduled to air tomorrow, Thursday, April 2, 2009.

Or come to my free workshop and get personalized answers.

What:   Homeowner Bail Out Workshop
Where:   2500 Weston Road, Suite 404, Weston, Florida.
When:   April 2, 2009,    6:00 to 7:00 PM
Cost:  Free with Advanced RSVP to roy@gate.net or 954.384.6114

Unless the number of Florida foreclosures slows, the economic crisis in our nation will worsen. However, the good news is, distressed homeowners can take action to avoid or delay foreclosure. They just need to be armed with the right information – and the right Florida legal expertise.

Topics discussed in tomorrow’s real estate bailout workshop include:

  • Florida mortgage modifications, refinancing, and short sales and who qualifies for which option
  • When deed-in-lieu is the best choice
  • When bankruptcy is the only and best option
  • How to negotiate with the bank and avoid deficiency judgment
  • Understanding homeowner legal rights in the foreclosure process
  • Common errors Florida banks are making that could stop foreclosure

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Close with me at www.westontitle.com

Today’s NYT Foreclosure Policy Editorial; My Thoughts Exactly

Friday, March 6th, 2009

Déjà vu. I awoke this morning to today’s New York Times top editorial Helping the House Poor . It was a direct reflection of my Florida foreclosure defense concerns discussed at length last night over the Obama Foreclosure plan. We had a full house of Florida homeowners facing foreclosure, real estate professionals dealing with the foreclosure and short sale markets,  as well as WSVN’s Andre Hepkins reporting on this national economic foreclosure crisis.

The Obama Foreclosure plan problem:  it does little for people who have a small amount or no equity in their homes.

The reason is simple: When you have little or no equity in your homes you have little or no incentive to keep the mortgage current.  “Owner” becomes “renter”… of his or her own home. Meaning that at the end you will have built zippo equity after making your mortgage payments.

Thus, the consensus is building fast. The stock market too seems to be speaking. Until the markets and government address a way to eliminate the negative equity in the mortgage market we will likely not get through this foreclosure mess.

The House of Representatives spoke yesterday too! They passed a major change in the bankruptcy rules allowing a judge to alter the principal amounts of outstanding principal balances of mortgages when it exceeds the market value of homes. We all call that a “Cram Down”. Because the judge is cramming down the principal reduction down the throat of the banks. In other words it’s a forced modification. Some people consider it a cram up… but I won’t go there!

As a foreclosure defense attorney, I’ve been strongly advocating for the judges to have this new authority since it gives us attorneys a new weapon to negotiate with the banks. In my opinion, the threat of the cram down is as important, if not more important, than actually going through the whole bankruptcy process.  In fact, just last night I noted this the missing “club” in the weapon’s arsenal of foreclosure attorneys to help level the negotiating playing field.

I must say it has been rather lonely out there– with little support from anyone including the courts. So, it’s great to see we finally we are getting some help from The President and Congress. But the law has not passed yet. The Senate still needs to vote and things are less certain there.

What can you do?

Do what we’ve been trained to do. Call BOTH your United States Senators and tell them what you think. And remember, if you live in one of the hard hit states for foreclosure: California, Florida, Arizona, Nevada, Michigan and a few others. This new law may determine you, your family’s and your State’s financial health.

For those who joined me last night at the Foreclosure and Bailout Workshop… I thank you for your time and input. Be my guest at my up to the minute Foreclosure Defense Workshops on the first Thursday of Each Month. Next one is schedule for Thursday April 2, 2009 at my office.