We called it a band-aid, and at least for some South Florida homeowners, it’s proving to be just that.  The Palm Beach Post profiled several homeowners who were among the first to receive benefits from the program. Sheryl Stuart, a Jupiter homeowner whose business went under, applied for help through the mortgage relief program, and is about to see her payments end next month.  Hardest Hit only entitles qualified homeowners up to six months of mortgage assistance.

Stuart told the Palm Beach Post that even though she’s found a new job, her salary won’t be able to cover her mortgage payment once she stops receiving aid from Hardest Hit. She’s frustrated that she’s about to be right back where she started when she applied for aid in the first place.

“In this economy, to think you can turn your life around in six months is totally ludicrous,” Stuart said in the article,  ”The working class is quickly slipping into a black hole.”

The truth is this program, however well-intentioned it might have been, is just not enough. What Hardest Hit is essentially doing is giving homeowners a nice seafood dinner, when they really need to learn how to fish.

It scratches the surface but for people like Stuart it might just delay the inevitable. Unless you’re giving homeowners a solid two years of payment relief, you’re not giving these people time to go back to school, improve their financial standing, and really turn their lives around.

Hardest Hit is throwing good money after bad, and really, what’s the point of spending all this money if it won’t provide permanent relief?

Not to mention that many homeowners have been rejected by the program, nearly 10,000 according to the Post, for reasons including being over 180 days past due on their mortgage.  So if many aren’t getting the help they need, and those who are getting the relief aren’t feeling a lasting impact, what’s the point?

Spokeswoman Cecka Green told the Post the state is going through uncharted waters with Hardest Hit, and it looks to us like the state wasn’t truly prepared to handle the demand.

“We never really anticipated where we would be at this point since we had not ever before administered a program like this,” Green said.

Helping people make their payments isn’t the answer. We were elated when the Federal Reserve started talking about principal reduction, that’s a much better solution that ultimately has a chance of keeping people in their homes.

If we allowed homeowners facing foreclosure to lease back their properties, that too would have a higher success rate, in our opinion. If we’ve learned nothing else, it’s that banks make the worst neighbors.

Florida’s Hardest Hit was doomed from the get-go, so it’s time to focus on systematic long-term solutions.

Discussing topics like Florida foreclosure defense, homeowners’ rights, real estate tips and trends, and the economy, Oppenheim Law’s foreclosure defense attorneys interpret the latest news and translate what it all means to today’s homeowner.

Recent headlines include fresh topics like “Deficiency Judgments Haunting Return, Jason Lives Once Again,” “Budgetary Hardball Almost Forces Court Closures: Courts’ Reliance On Foreclosure Fees Exposed” and “Foreclosure Auctions are not eBay or Child’s Play. Novice Investors Beware!”

Over the past year, The South Florida Law Blog has broken down issues like South Florida home sales, national mortgage fraud, America’s job markets, and all the developments in foreclosure defense and short sales to help homeowners take advantage of these trends in areas the banks and the government clearly cannot.

“Homeowners need to be aware of how all of these trends can impact their greatest investment,” Oppenheim said. “We look forward to continuing to provide legal insight and practical analysis into these topics that greatly affect South Florida.”

Oppenheim Law is one of the leading Florida real estate and foreclosure defense law firms, founded in 1989. The firm has a 9.6 out of 10 rating from AVVO, the world’s largest legal directory, as well as the highest rating (A-V) conferred by Martindale Hubbell Law Directory, the most respected directory of lawyers and law firms in the U.S.

While we have addressed the deficiency judgment issue for years now, the Sun-Sentinel has now also reported on the danger of what will soon happen. In two or three years, when big banks catch up with their foreclosures, we will see a flood of such deficiency judgments. The main targets of the big banks will be strategic defaulters. Strategic defaulters are the folks who could afford their mortgages but defaulted because they are so underwater that it didn’t make any sense to pay. Not every strategic defaulter has to worry though. A deficiency judgment can only be entered in foreclosure cases. Short sales cannot lead to a judgment being entered against you unless the bank decides to file an action and litigate in court. An action would require the bank to pay attorneys and other fees with no guarantee of success and scrutiny of their documents, which might lead to sanction if fraud is uncovered.

There is still some time left before we are inundated with deficiency judgments. Nevertheless, everyone going through the foreclosure or short sale processes needs to be on their guard. We here at Oppenheim Law have seen a recent up tick in banks pursuing deficiency judgments. Steps can be taken now that will help protect people against this worst-case scenario, as we have successfully been doing in the last few years.

South Florida Law Blog features Ft. Lauderdale foreclosure defense attorney Roy Oppenheim’s blog. Topics include the latest opinions, views and perspective on real estate news, foreclosure defense, the economy, the foreclosure fraud crisis, and Oppenheim Law’s foreclosure defense workshop.

You can vote for your favorite blog by logging in via your Facebook, Twitter or Sun-Sentinel account. Voting ends Monday, April 11 at 10 a.m.

We look forward to continuing to bring you the latest and greatest in real estate, foreclosure defense and economic news and trends.

From everyone at Oppenheim Law, thank you for your continued support!

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.”

“The fact is that these rules are ad hoc and apply only to foreclosure cases, relegating a whole class of defendants to different treatment,” Kaniuk continued.  “This process doesn’t help anyone except the banks, who don’t need any more help, or bailouts for that matter.”

Today, Weston Title and Oppenheim Law completed one of the largest short sales with JP Morgan Chase. The original note was approximately $6 million, but the bank approved a payoff for almost half that amount. The bank agreed to the haircut in exchange for receiving the $3 million in proceeds.

Further, the bank waived the deficiency judgment demonstrating what Roy Oppenheim has been stating for the past several weeks, “The banks are eager to deal and get the economy back on track.”

In fact, rumor has it that the JP Morgan Chase CEO, Jamie Dimon, had to sign-off on this deal.

As Oppenheim said two weeks ago in the Sun Sentinel, “The result will be more short sales, loan modifications and ‘meaningful mediations’ that will help stabilize housing prices that have been falling steadily since 2006.

For more on Foreclosures, catch the replay of last week’s Oppenheim Law monthly Foreclosure Defense workshop on Oppenheim Law TV for the next few days!

Humpty Dumpty sat on the wall.
Humpty Dumpty had a great fall.
All the king’s horses and all the king’s men.
Couldn’t put Humpty Dumpty back together again.

Most Americans, including some lawyers and even judges don’t understand what happened. Yes, it is complex and confusing. But at the end it’s real simple.

In the old days, a bank would lend a homeowner money to buy a house.  The homeowner would sign a promissory note promising to pay the money back to the bank.  The homeowner also signed a mortgage, giving the bank the right to foreclose and take the house back if the homeowner did not pay back the money.

Mortgage Follows the Note

Lawyers and judges grew up with the legal doctrine that the “mortgage follows the Note.” Simply put, if the note was transferred from one bank to another the mortgage would follow the transfer.

But that was then, this is now.

At some point, the folks who brought you this mess  (i.e. overly ambitious bankers on Wall Street) had the “great idea” of slicing and dicing the interest of the Note and literally severing it from the Mortgage. Why this was done was actually for a matter of convenience, expediency, and, arguably, greed. Such motivations for now are secondary to the crisis we are experiencing.

Humpty Dumpty = Mortgage and the Note

But this is clear:  If you think of Humpty Dumpty as the Mortgage and Note, and you break it apart (as what occurred on Wall Street), when the Notes were broken into pieces and the mortgages were assigned to Mortgage Electronic Recording System (MERS), the fact is that it may well be nearly impossible to bring the mortgages and their corresponding Notes all back together again. Plain and simple!

Banks Under Siege

This is why the banks are now under siege. Banks are accused of fraud and perjury in trying to put the Note and mortgage back together. In fact, The New York Times is running Foreclosures Slow as Document Flaws Emerge today as its lead story. The Sun Sentinel quotes Nova law professor, Robert Jarvis (an old Bronx Science classmate of mine) who stated that this problem is now too large for the courts to handle and that the federal government or the banking industry itself will have to step in.

Following Chase’s Lead – Sun Sentinel Cover Story by Harriet Johnson Brackey

I spoke with Harriet about this yesterday and now it is today’s cover story.

Weston attorney Roy Oppenheim says the state Supreme Court’s decision to spend millions to speed up foreclosure cases is ultimately going to slow down the whole process.

“It’s going to backfire on everyone who thought they could ramrod these foreclosures through while denying people due process,” he said.

And it will!

Title Insurance Companies Stop Insuring

Adding insult to injury, some title underwriters are now not willing to insure any real property where GMAC foreclosed. That means if you recently purchased a home just pray you have title insurance because you have a huge claim looming. You will not be able to resell or refinance your property for a long time.

So… while some of us have warned for some time that many of the banks are really not “good” eggs,  Chicken Little has come home to roost.

“All the kings horses and all the kings men will not be able to put Humpty Dumpty back together again.”

Oppenheim continues to help Florida homeowners learn more about developing stories concerning bank fraud and will focus on this subject in his monthly foreclosure defense workshop on Wednesday October 6 at 6pm.

Weren’t you surprised when you opened your mailbox?  Most folks were stunned when they received their estimated real estate tax bill over the past few weeks.  Like me, they justifiably expected that their property taxes would go down as their assessed values for their property decreased.  However, this was not the case as the property taxes either stayed the same or even increased.  According to the Sun Sentinel, towns and cities in Broward County (except Fort Lauderdale and Parkland) are playing a little “shell game” by increasing the millage rate (that means the tax percentage rate) to compensate for the drastic decrease in the value of real estate in South Florida.  Because of these “shell games,” homeowner’s mortgage escrows will actually increase which will then cause more homes to go into foreclosure.  Our local governments just don’t get it!  Why can’t local governments do with less?  Why can’t our elected officials tighten their belts as we all have had to do over the past few years?  Most governments are bloated with excess fat that can always be trimmed.  The bottom line is that increased millage rates will not solve the problem but will only make it worse. Until we elect our kids into office and bring in a new generation that was brought up in these times: NOTHING will change… plain and simple.

Click Here to View Interactive Map of Proposed Tax Rates by City in Broward County

Roy Oppenheim

In the Trenches

The county had 3,759 homeowners in some stage of foreclosure in July, up 77 percent from June and 42 percent from a year ago. Palm Beach County had the 11th-highest foreclosure rate of Florida’s 67 counties.

Foreclosure defense attorney and legal blogger Roy Oppenheim told the Sun Sentinel he is noticing expensive mortgages going into default more frequently.

“This is like the second shoe dropping,” he said. “A lot of people with higher incomes have been seriously, seriously hurt.”

Want to learn more about mediation and foreclosure? Join Oppenheim Law for our free monthly foreclosure defense workshop the first Wednesday of each month and check out the entire Sun-Sentinel foreclosure story in the Oppenheim Law Newsroom. Find Oppenheim Law on Facebook or follow us on Twitter for up-to-the-minute real estate news.

Florida real estate attorney and legal blogger Roy Oppenheim contributed to the report, which explains how a tenfold increase in foreclosure cases over the past five years is crippling the South Florida court system.

According to Oppenheim Law, South Florida courts have turned to mediation, a process prior to foreclosure proceedings that gives homeowners and banks an opportunity to avoid a battle in court if an agreement on the future of the property and debt can be reached. The problem, though, is most homeowners are not aware they now have a right to mediation.

“Mediation makes all the difference in the world,” Oppenheim says. “There are so many opportunities to resolve matters in mediation, a lot of creative ways.”

Check out the entire Foreclosure Tsunami article in Oppenheim Law’s Newsroom to find out the state’s plan to eliminate half of the foreclosure backlog by the end of the year.