Not only is America’s foreclosure crisis still going strong, it now comes with even more fraud and deception.

With heightened media coverage surrounding the recent national mortgage settlement and refinements to government assistance programs, experts say selling “the schtick” has only become easier for criminals. But there are red flags consumers can watch out for when trying to determine whether or not an organization is legit.

First, homeowners should never have to pay anything up front for a loan modification or information on how to negotiate with their lender, says Roy Oppenheim, whose Florida-based law firm Oppenheim Law has handled more than 1,000 mortgage and foreclosure fraud cases over the past 5 years.

“If you’re paying upfront to a non-lawyer who’s claiming they can modify your loan, that’s a big scam,” Oppenheim says.

Read More from US News and World Report

Short Sales Soar as Home Foreclosures Fall

The foreclosure crisis isn’t over, but a new trend in real estate sales could be the light at the end of the tunnel for many borrowers and lenders. Short sales, which occur when homeowners sell their homes for less than what they still owe, outpaced foreclosures for the first time ever in January,according to a new report from Lender Processing Services, Inc.

The Federal Housing Finance Agency announced this month that mortgage servicers will be required to review and respond to short sale offers within 30 days and make final sale decisions within 60 days. The new requirements, which take effect in June, have kept lenders busy expanding and training the staff needed to catch up with growing short sale demand.

“When the robosigning crisis hit, there was effectively an 18-month moratorium on foreclosures,” said Roy Oppenheim, a foreclosure defense attorney with Oppenheim Law in South Florida. “The banks got caught with their hand in the cookie jar and the lid slammed closed on it. Fraud, robosigning — it all came to a stop. But through this $25 billion settlement, they’re using the crisis to their advantage. The settlement creates a major incentive for the banks to do short sales.”

Read More from Lawyers.com

Short sales pick up in housing market

Lenders are pricing short sales more aggressively, RealtyTrac adds. In January, the average short sale price was 10% lower than a year earlier, exceeding the drop in U.S.home prices.

Some mortgage servicers started pursuing short sales more aggressively months ago. Bank of America says it did 107,000 short sales last year, up from 92,000 in 2010 and double the 2009 volume. New measures are also likely to boost short sales.

Freddie Mac and Fannie Mae, which own or guarantee 60% of home loans, will soon require lenders to decide short sale offers within 60 days. Realtors have complained that short sale offers often linger. The recent $25 billion mortgage settlement also encourages short sales.

New rules have slowed foreclosures in many states, increasing short sales, says Florida foreclosure defense attorney Roy Oppenheim.

Read More from USA Today

It’s time to call them out once more. Not for another column, but rather, a lack of one.

In October 2010 their column “The Politics of Foreclosure” made light of the plight many of my clients have undergone, and shrunk the foreclosure crisis down to a mere inconvenience for a few Washington insiders.

You and I, of course, know different.

And as the crisis grew wider and wider, and the expansiveness of the banks fraud became even more apparent, The Wall Street Journal’s Editorial Board continued to be a haven for outdated ideas, protection of the status quo and disgust for anyone trying to do good by the American homeowner.

When the AG settlement was first announced back in February, the Wall Street Journal called it a ‘bank job’ worthy of the Barker gang.

I found it disturbingly amusing that a settlement that was basically little more than a public spanking for the banks angered them so. The settlement didn’t land a single banking executive in jail, yet the columnists at The Wall Street Journal still treat the banks as the victims in the housing crisis.

The crisis, you know that the banks basically created.

The Wall Street Journal editorial board still believes the banks didn’t illegally foreclose on a single homeowner, something I personally know not to be true.

Either their editorial board is remarkably stupid or just ignorant.

And so I shouldn’t be all that surprised that they have been silent after the Department of Housing and Urban Development released audits that laid out how pervasive the culture of fraud was amongst our nation’s lenders.

If robosigning was, as The Wall Street Journal referred to it just the ‘nameless, faceless employee in the back office who reviewed the file, not the other nameless, faceless employee who sits in the front’, then why did the banks go through such giants roadblocks to keep HUD investigators at bay?

The entire process of submitting foreclosure claims was flawed, and HUD said exactly that. The pressure to push these illegal documents through came from the top. Managers ignored the signers admissions that they ‘could not handle the workload’, and responded by demanding a faster turnaround.

The lenders’ integrity was compromised, and the documents they submitted were, once again using HUD’s own words, unreliable and inauthentic…in other words, fraudulent.

But you wouldn’t know that if you read the Wall Street Journal’s editorials.

The paper reported on the audits yes, but there was no retraction, no admissions that maybe, just maybe, robosigning was more than an just a pesky little problem.

So where is the outrage now? Certainly not in the Wall Street Journal. Unless it’s against Eric Schneiderman. Or Martha Coakley.

Their editorial board must be living on another planet.

The outrage, however, is still right here in my blog.

The banks may not be trying to pass off fraudulent documents like they used to, but that doesn’t mean they won’t try every dirty trick in the book to get you out of your home.

As I said last year, the banks hijacked the judicial system (and they are still trying), and whether the Wall Street Journal will admit it or not, everyone else now knows it.

Photo by The-Lane-Team

Banks need to get their massive foreclosure backlog off the books. There are over 368,000 cases in Florida. I get that.

Getting these properties into the hands of families who can afford them, that is what I want to see. It’s needed to jump start the economy, and no one wants to see the banks out of the neighborhoods more than me.

But it can’t be allowed to happen on the backs of other homeowners plain and simple. Lenders have tried to thrust these homes back onto the market before, and that’s why they just shelled out $25 billion.

The banks were penalized for being unethical, untrustworthy and fraudsters, and it doesn’t look like they have learned their lesson.

Yet a series of proposed bills now making their way through the Florida House and Senate offer banks unjust control over the foreclosure process, all in the name of getting abandoned homes back on the market.

The Senate version, which would create the “Florida Fair Foreclosure Act”, was passed by a judiciary committee earlier this week by a 5-2 vote. There is a similar bill making their way through the House.

But are they really ‘fair’ to homeowners? Absolutely not.

These bills are being pushed by banking industry shills. They make it easier for lenders to foreclose, and allows them to do so faster.

Have the politicians in Tallahassee learned nothing from the settlement? The $25 billion isn’t even in the mail, yet some are back to their old tricks, turning a blind eye to the plights of their constituents and denying them due process.

Sounds awfully familiar to me!

What these bills do is allow for more expedited foreclosures. Under the Fair Foreclosure Act, if the banks consider a property to be abandoned or if the homeowner does not respond within 20 days of being served, a judge has no choice but to rule for a final judgment of foreclosure right then and there.

A judge’s gavel would be nothing more than a rubber stamp, yet again.

The language of what constitutes an abandoned home is just too vague, and it is vague because the banks crafted it to be that way.

What are these criteria? If there is too much trash, if at least two neighbors say the home is abandoned, and if no one can be reached at the home at different hours of the day over a 72 hour period are among a few of them. And only two of them would need to be met for a home to be considered abandoned.

The people who help determine if homes meet those criteria, they all work for the banks, not the courts, not you. This bill offers the banks impunity with absolutely no oversight.

It’s a classic example of the fox watching the henhouse. If the banks present faulty ‘criteria’ that they developed, what chance do you have?

Even if your home is later ruled to have been fraudulently taken, your only recourse under this the Florida Fair Foreclosure Act would be monetary. You don’t get your house back, and the banks would be the winners, yet again!

Judges may not like seeing a logjam in their courts, but there is a reason a foreclosure takes a long time. It’s to prevent homeowners rights from being trampled.

Now the Florida Fair Foreclosure Act does have some provisions that are beneficial, namely that they would greatly reduce the amount of time that banks would have to recoup any unpaid mortgage debt, otherwise known as a deficiency.

Banks would have only one year, as opposed to the 5 they now have to seek a deficiency judgment.

That’s not worth the chance that even one homeowner might unfairly lose their house. Once again expediency is being promoted in exchange for fairness, dues process and constitutional rights.

Let’s hope the Florida Fair Foreclosure Act dies a quick death. I doubt it though.

If there was anything positive that came out of the prolonged discussions between the states and the banks on the mortgage servicing settlement, it was that banks were reluctant to go full steam ahead in the foreclosure process while talks were ongoing.

But even before the settlement was announced, we saw signs that pointed to more foreclosures in 2012.

According to RealtyTrac, there were 24,783 foreclosure filings in the state of Florida in January, a 14% percent rise from January 2011, the first year-over-year increase in over a year.

Now that the settlement has been agreed to, the training wheels are off.

It’s petal to the metal folks. One thing that the settlement does for the banks is provide them a blueprint for how to proceed in the foreclosure process without getting their fingers stuck in the cookie jar.

Which means borrowers will once again have to defend themselves just as rigorously as they did pre-robosigning.

I’ve been asked if the settlement changes my advice to homeowners, to which I reply, ABSOLUTELY NOT!

You must continue to stand your ground. If you are in foreclosure or about to enter foreclosure, I will say what I have always said, you must fight the banks and force them to kick you out of your home.

The settlement may have changed the rules for the banks, but it shouldn’t change the rules for you, the homeowner. The banks will not transform into wonderful and charitable companies just because the settlement might penalize them.

Make no mistake about it, they will continue to come at you and come at your hard.

So allow me to reiterate my advice to you, the borrower.

Get legal representation if you need it and force the banks to kick you out. Settlement or no settlement, you still have the choice to modify or do a short sale or stay and fight.

Just because the settlement exposed much of the banks misconduct does not mean you will automatically be off the hook.

Unless there is a sheriff’s deputy at your door, do not give in.

If there is proof your mortgage was caught up in a fraudulent securitzied trust, you have a much better chance now of halting the foreclosure process outright. Courts have finally caught on to the banks illegal behavior and they can’t hide behind the bench as they have done before.

Of course you won’t have your case dismissed if you don’t, say it with me now, STAND YOUR GROUND.

If a dismissal seems unlikely, then you should look at a short sale. They are on the rise and many banks will offer you substantial cash, as much as $35,000, if you agree to sell your house back to the bank.

Lenders are willing to let you walk away from your underwater mortgage if you do so legally.

That way you can get a fresh start in a more affordable home or in a rental property. But don’t expect them to make such an offer if you move out the minute you are unable to afford your mortgage. State your case, and STAND YOUR GROUND.

Your third option is to seek a loan modification or mortgage relief from the government. There are more government programs than ever, in part because of the mortgage settlement.

While many of them have not been successful in the past, the settlement has pumped more money into these programs and you have a much better chance of qualifying and ultimately staying in your home.

But remember you can’t qualify for these programs if you move out.

Stand your ground, and fight the banks.

In The Trenches

Roy Oppenheim

Just like Waldo, a copy of the mortgage settlement is awfully hard to find.

The dust has finally settled on last week’s mortgage settlement.

It dominated the news cycle once the details of the agreement broke. I spent the bulk of my day a week ago talking to the media and weighing in on it’s significance.

But there is one clear question that I haven’t heard anyone been able to definitely answer yet.

Has anyone seen the darn thing, in it’s entirety? I sure haven’t!

I’ve seen press releases from the states, plenty of summaries, and an extensive statement from Attorney General Eric Holder. So there are details that are out there. But the document itself?

Right now Waldo is easier to find.

No formal agreement has been filed with the courts and we hear it may not even be completed!

And according to my friends at the Crew of 42 Blog, Congress hasn’t seen a copy of it either.

Maryland congressman Elijah Cummings is quoted in Crew of 42 as saying he wasn’t concerned that he hadn’t seen a copy and that he trusts his attorney general.

Color us slightly more skeptical.

A website was set up explaining the details of the settlement the day it was announced, but where the actual settlement is supposed to be it just says coming soon.

For a government that prides itself on being transparent, this just can not stand.

President Obama may be reengaged and all signs point to him being back on the side of the homeowner, but there are plenty who remain unconvinced and this doesn’t exactly help.

For an agreement that 49 attorneys general and 5 large banks haggled over for months to be so hard to find is at the very least, a little bit strange.

Banks, with the settlement now behind them, are already starting to ramp back up on foreclosures based on no small part, on what the settlement says.

If they have seen it, and it would be ludicrous to think they haven’t, don’t you have the same right?

Let’s make that perfectly clear.

Depending on what you have read, you might be outraged, you might be relieved, you might be overjoyed. And the target of your wrath or sympathy might depend on your own personal perspective.

But make no mistake about it, yesterday was a day of reckoning, for me, and much more importantly, for the people I represent.

Yes, the banks got a slap on the wrist and the money they are trickling back to the homeowners won’t make up for the systemic fraud these lenders engaged in, and make no mistake it was fraud at the highest level.

I wish I could personally put the handcuffs on each CEO who allowed robosigning to occur.

But here’s the silver lining, now we have a reengaged President, who is anxious to see the job done. We have Eric Schneiderman on the case, and he is going full-speed right at the banks.

They may have not gotten the flogging they deserve, but I am optimistic that they surely will.

Conservatives can blame the borrowers all they want, and certainly not all were faultless. But the banks were the grown-ups here, they should have known better. They had the chance, in the midst of the housing boom, to stop, take a breath and take a look back at what they had done.

They didn’t.

The truth is no amount of money would have been enough. And since we can’t put the banks in jail, they got what was in essence a very public shaming. And people’s eyes were opened. What you have now learned, can not be unlearned.

The banks for years, had their hands in their cookie jar, and tried as I might, I could not get people to glance over at the jar to see. I felt like a lone wolf calling out the banks on this blog.

Here was my challenge to borrowers back in 2009!!

Make the banks prove they own your note. Many times the banks are clueless who owns their note.

People thought I was Chicken Little, telling everyone the sky was falling. Well it was, and now everyone knows it. I went from being a lone wolf to a man lost in the crowd. My voice was far from the loudest voice yesterday, and that’s just fine by me.

When I first discovered that banks were essentially hiring people to impersonate banking officials and crank out thousands of fraudulent signatures, and were paying them what your average burger flipper makes, I couldn’t believe it. It was perjury and forgery, and those are crimes.

If not for the banks’ own arrogance and stupidity, yesterday’s settlement would never have come. If they had just plugged away and kept things running as they always had, they would have made money hand over fist and my clients would have been kicked out of their homes.

And what’s really bad for the banks is that robosigning is the key into the much larger world of securitization fraud, which is the real crime here.

Robosigning would have never been necessary if the banks hadn’t bundled up all these mortgages and sold them off to the highest bidder in the first place. If they had been satisfied with making millions, instead of trillions, we would not be where we are today.

What’s even worse for the banks is that robosigning provided the proof to investigate the banks for the larger fraud.

We are looking forward to the final day of reckoning, when the President and Schneiderman wrap their latest investigation because trust me, when they do, no one will give a damn about robosigning.

As always I am talking to you from the trenches.

Roy Oppenheim

Courtesy: New York Giants

The clock may have run out on this year’s Super Bowl (Way to go Giants!!) but there’s still a few minutes left in this year’s REAL grudge match, the Banks vs. the Attorney Generals.

It’s 4th and Inches, the score is tied, and it would be nice to avoid overtime.

Today we could learn whether the much-discussed robo-signing settlement with Wells Fargo, Bank of America, JP Morgan Chase, Ally Financial and CitiGroup will come to pass, and in what form.

With California AG Kamala Harris returning to the negotiating table, the deal looks closer than ever to being sealed. Harris, who represents the state with the largest amount of foreclosed homes, has rightfully been hesitant to sign off because her state has the most to gain, or lose, from this deal.

We were initially very hesitant to see this deal go through ourselves, but the time has come for it to put to bed.

Why?

Because we feel the deal in its current form does a lot. Does it help every single homeowner who’s underwater? Of course not. There is no deal that will.

But here is who it does help. The homeowners who have fought to keep their homes from day one, who were at the forefront of these legal challenges against the banks. Much of what we have learned about robo-signing and the lack of standing banks had to bring foreclosure, would not have come to light without these crusaders, and its time they got a reprieve.

In theory it also helps the responsible homeowners, the ones who paid their mortgages on-time and whose homes went underwater through no fault of their own. They too need to be rewarded.

The reported 25 billion dollars (perhaps more if all 50 states sign on) that the banks are putting up will finally offer these homeowners some principal reduction, and the chance to refinance, two things we have long sought to see.

For those who just walked away, who left their homes to fall into disrepair, it’s our opinion that they should not be a priority.

The longer this deal lingers without any hope of conclusion, the longer we face the chance of a social contagion where everyone decides to stop paying their mortgage. That will not help the market, and more importantly it won’t help the homeowners who’ve truly been wronged by the banks.

There are some bloggers and commentators who are still urging the AGs to not sign this deal. Is it a slap on the wrist? Yes, but that’s all it can be. We must not forget that rob-signing is the tip of the iceberg.

Whatever state claims that might be washed away by this agreement will seem like small potatoes once Schneiderman and his team wrap their investigation.

In fact they’ll seem more like little potato crumbs. Trust us what lies ahead is far worse.

If this settlement is the homeowner’s Super Bowl, then what lies on the horizon is the Supercalifragilisticexpialidocious Bowl.

There is nothing more important to us than making sure the banks face punishment for their dirty dealings. It is very important that people continue to challenge the banks by trying to flesh out whether they truly have standing to bring foreclosure. There’s no reason why this should end with this settlement. When it’s said and done, we believe the banks will be punished.

So far Schneiderman has not wavered in his efforts to go after the banks. His efforts in the last few weeks have them running scared for the first time. We’re confidant he’ll do whatever it takes to get the banks. He has been one of the holdouts against this deal, but he is starting to turn around on it.

If he can be comfortable with it, then so can we.

Thanks to RJ Matson and the St. Louis Post Dispatch for this wonderful cartoon! It sums up our feelings quite nicely.

Freddie Mac’s Regulator ‘Completely Puzzled’ by Allegations of Conflict

If Edward DeMarco is puzzled by the outrage over the revelation that Freddie Mac was investing in securities that paid off if homeowners couldn’t refinance, then call us puzzled by his puzzlement. Either he’s a bold-faced liar or he is just plain dense. Does he really not get it?

DeMarco, the acting director of the Federal Housing Finance Agency, had the gall to tell National Public Radio this morning that one of his major responsibilities was to make sure that Freddie Mac didn’t lose money. NPR, by the way, was one of the agencies that broke the story in the first place.

Eddie, you’re a now a government-run company. You were semi-private at one point, but now you are an arm of the government. You should be looking out for the homeowner, and that’s it. You can claim that these investments, which for all intensive purposes were betting against homeowners, were just routine financial transactions.

We ain’t buying it.

Freddie Mac was created solely to help ease up the mortgage market and make it easier for people to get into homes. Anything counter to that, which clearly these investments were, goes against your mission statement. We’re not interested in profit, we want to see more people in homes.

Eddie, as Donald Trump would say, You’re Fired!

Schneiderman Suing Banks For ‘Deceptive And Fraudulent Foreclosure Practices’

We gotta give Eric Schneiderman another ‘atta boy’ because he has not let up against the banks!! This time its because of their creation and use of the Mortgage Electronic Registration System, better know as MERS.

Today we learned he is suing, in his role as New York Attorney General, Bank of America, JP Morgan Chase and Wells Fargo, along with MERSCORP and a host of other companies because of their use of the foreclosure registry. Schneiderman alleges the banks submitted documents to MERS that had false and misleading information to make it appear they had the authority to foreclose when in fact they didn’t.

He contends homeowners were at a distinct disadvantage because MERS made it impossible for them to track property transfers through public records.

It all comes back to the key point that we have railed against, that the banks often could not prove that they owned the homes they were trying to foreclose on, and used fraudulent documentation to cover their tracks. Schneiderman may not be the first to call out MERS, but he has zeroed in on the problem with it and the banks poor record keeping.

Keep it up Eric!

Swiss Bank Wegelin Charged in U.S. With Aiding Tax Evasion

We’re not exactly sure how you can put a bank in an American jail, especially when it’s not even in the US, but we’re glad the government is trying!

Wegelin & Company, a 270-year-old Swiss bank, has been indicted on federal charges of tax evasion here in the United States. Prosecutors allege they helped over 100 American clients hide more that 1.2 BILLION dollars in assets from the IRS. Three of its top officials are also facing charges.

Wegelin has already said on their website that most of their customers and employees are being transferred to another bank in the wake of these charges.

It’s great to see the government get tough with Wegelin, but when are they are they going to bring US banks up on similar charges for what they’ve done to the homeowners and for not playing by the same rules as the rest of us?

Have a great Super Bowl weekend and we’ll see you Monday — From The Trenches!

President Barack Obama delivers remarks on the economy at Shaker Heights High School,Shaker Heights, Ohio, Jan. 4, 2012. (Official White House Photo by Chuck Kennedy)

We really haven’t seen President Obama insert himself directly into the housing crisis, but there are rumblings that he may do just that during Tuesday’s State of The Union address.

The fact is that is what homeowners have been clamoring for. A new USA TODAY/Gallup Poll found 58% of Americans want the government to do more to help people keep homes.

According to HousingWire, Ohio senator Sherrod Brown told reporters today that there was evidence that Obama would address the robo-signing case which involves several major banks. A North Carolina congressman even said there were rumours that Obama would announce a settlement, something HUD secretary Shaun Donovan suggested last week was ‘very close’, as we mentioned in our Week In Review on Friday.

For the record, Obama’s press secretary refused to confirm any details, saying only that the President was “focused on the issue of housing”.

Between Dononvan’s comments and the recent white paper sent out by the Federal Reserve, it seems that more and more top government officials are finally realizing how important the housing market is to our economic recovery, not to mention their own political survival.

This is not news to us here at the South Florida Law Blog.