Strategic defaults are here to stay: It’s estimated that at least 1 million homeowners who can afford to pay their mortgage chose to simply walk away last year, according to CBS and 60 Minutes.
After doing the math and watching property values shrink in some instances to less than half of what’s owed on a mortgage, homeowners are opting to rid their underwater property and start fresh.
According to 60 Minutes, more than 11 million homeowners across the country are underwater, and it’s estimated that number could double in the next year.
This means nearly half of all American mortgage holders will owe more on their homes than those homes are currently worth.
Oppenheim Law has presented the theory of strategic default in our monthly Florida Foreclosure Defense Workshops and also with FOX News WSVN and CBS 4 News. Check out the videos below.
“We’ve been through an event that none of us have ever experienced in this country since the Depression,” David Stevens, the commissioner of the Federal Housing Administration, told Morley Safer and 60 Minutes.
Check out the entire 60 Minutes strategic default segment below and share your thoughts in the comments section.
Homeowners across the country tuned in Wednesday night as Oppenheim Law hosted its monthly Foreclosure Defense Workshop and broadcast the event live online through UStream TV.
Miss out on the live show? Oppenheim Law is streaming the Short Sale and Strategic Default Workshop on the South Florida Law Blog and UStream TV Channel through Sunday night.
We’re giving homeowners a second chance to hear Roy Oppenheim explain the latest trends in Florida foreclosure defense. Check out the video below for answers to many of the common questions homeowners have when facing a foreclosure, short sale, or strategic default.
Questions or feedback? Oppenheim Law would love to hear your suggestions for next month’s free Real Estate Workshop on June 2 in the comments section below, and be sure to follow Roy Oppenheim on Twitter @oplaw for all the latest real estate news.
Strategic default and short sales are the latest buzzwords in Florida foreclosure and real estate. Find out how these foreclosure defense strategies can prevent foreclosure and costly deficiency judgments May 5 from 6-7 p.m.
Roy Oppenheim tells homeowners how to challenge banks at their own game and how to craft your personal bailout.
What: Short Sales + Strategic Defaults: Free Real Estate Workshop
When: Wednesday, May 5, 2010 – 6:00 to 7:00 PM
Who: Homeowners facing foreclosure, buyers, and sellers
Unable to make it to Weston? Oppenheim Law broadcasts its free monthly Short Sales and Strategic Defaults Workshop online through the Oppenheim Law UStream Channel. Participants can ask questions and comment on the presentation through Oppenheim Law’s Twitter account @OPLaw.
Oppenheim Law looks forward to seeing you on May 5 whether in person or online!
Stocks Up + Economy Recovering, But a New Real Estate Storm On The Radar
Book the First: Recalled to Life
On the national front, news stories indicate that the stock market is steadily resurrecting itself, the first real positive sign that the economy may finally be on the mend. A recent article in The Wall Street Journal noted that banks especially were showing vast improvements, with J.P. Morgan Chase calculating a 55% surge in quarterly profits. While the news is encouraging, there is still hesitation rather than outright relief in the undertone of the stories. The reason: if the banks have not learned from their mistakes, the economy might be six feet under again and sooner than we think.
Book the Second: The Golden Thread
While numbers in South Florida still appear disheartening, a little golden thread appears to be tying up the drowning homeowners into a pretty little package called loan modifications. Although a recent article in The Sun-Sentinel quoted RealtyTrac stating that foreclosure filings in Broward had risen 38% in Broward from March 2009, the numbers seem to be decreasing slightly from previously months. The federal government attributes this to the success of new government workout programs.
Recent statements from the Treasury Department tout the success of the new government loan modification programs. Although the programs did not technically go into effect until April, some banks began using them “successfully” earlier. A recent press release by the Assistant Secretary of Financial Stability for the Treasury Department stated the new programs were on track to help 3 to 4 million homeowners by the end of 2012, with over 1.4 million homeowners already beginning the application process. While this appears to be a positive turn, everything will fall apart if that single golden thread snaps. (more…)
What could be more embarrassing for the already floundering banks than the fact that their foreclosure, loan modification and short sale systems are a complete mess?
Well, a recent court decision in a mortgage foreclosure lawsuit in Pasco County, FL, revealed the banks, besides being disorganized, are apparently not above stooping to commit fraud in order to file foreclosure actions against homeowners. You can view the Court’s order by clicking here.
Many homeowners probably don’t know the bank has to prove it has standing to bring a foreclosure action. Standing is the constitutional right for a party to appear to bring a case in court. Without standing, a party has no right to be in court. But in reality, the bank must prove that they in fact own and hold both the mortgage and promissory note, and thus have the right to foreclose.
This becomes a problem for banks because they are so disorganized that the documents are often lost or misplaced. An even bigger problem occurs when the original mortgage lenders sell the mortgages and notes and convert them into a securitized trust. When these mortgages are assigned to another bank or a securitized trust, the assignment of mortgage must be executed and notarized. Within these assignments, foreclosure defense attorneys are finding all kinds of problems that are leading to foreclosure cases being thrown out of court.
Fraud in the Court
A problem found in an assignment of mortgage that was recently thrown out by the court was especially astounding. The Plaintiff, U.S. Bank, filed a foreclosure action on December 6, 2007, based on an alleged assignment of mortgage dated as of December 5, 2007. (more…)
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. (more…)
National news exposed another monster rearing its ugly head to drown already flailing debtors.
The New York Times reports today that wage garnishment is on the rise: up 30 to 120% depending on the state. This news comes as a kick to debtors who are already down, buried in insurmountable debt.
Under federal law, the garnishor must leave the debtor with 30 times the federal minimum wage per week. However, when taking into consideration the federal minimum wage is $7.25 per hour, this means the creditor only has to leave the debtor $217.50 per week to live.
In Florida, creditors can garnish up to 25% of a debtor’s disposable income, which means if you make $800 a week after taxes, they can garnish up to $200 of your paycheck every week until the debt is paid. Debtors are only allowed to take the lesser of the two, which usually results in them following the 25% option. But losing even 25% of their income is a devastating blow to debtors who are already struggling to keep their head above water.
Banks claim the problem is the debtors, who refuse to return phone calls and ignore lawsuits. In the long run, ignoring the lawsuit actually creates a larger problem for the debtor. Banks get default judgments and collect astronomical interest rates on the debt as high as 79.9% per year. Those kinds of rates are enough to make organized crime syndicates smile.
On top of that they tack on outrageous attorneys fees, because the debtor is not showing up to fight. In many cases, the banks are able to get a default judgment without ever having to prove the debt, much less justify to a judge the fees and penalties they are charging. (more…)
