Is homeownership still part of today’s American Dream? A recent article in the Wall Street Journal shared some old school advice on buying a home in today’s economy, more along the lines of Depression Era thinkers versus Baby Boomer spenders.

1. Buy what you can afford without scrimping on other needs. If you need to save for retirement or college, save. Don’t think your Florida home is going to pay for them.

2. If you need to move in less that seven years, then rent, don’t buy. You will be hard pressed to break even on your Florida home unless you live in it for a long time.

3. Values could stay depressed for many years. The only way you can plan to build equity in your Florida home is to pay down the mortgage.

Whether buying or selling a Florida short sale or foreclosure or renting; make smart decisions in light of today’s economy. Today’s housing market is still unraveling.

Mortgage Rates Set Fresh 2011 Low After Jobs Report

Fixed rate home mortgage loans dropped for the eighth straight week to a new low for 2011 amid concerns of another economic slowdown this year, according to data from Freddie Mac and a report by The Wall Street Journal.

The 30-year fixed-rate mortgage averaged 4.49%, down from 4.55% last week and 2010’s  4.72% average. Rates on 15-year fixed-rate mortgages fell from 3.74% to 3.68%.  15-year fixed-rate mortgages averaged 4.17% in 2010.

Lawyers Get More Time to Finish Foreclosures

Florida foreclosure defense is translating into more time for plantiff bank attorneys to complete a foreclosure, according to an article in the Palm Beach Post.

Due to the reality of Florida’s overloaded court system and swirling questions surrounding the validity of foreclosure paperwork, Fannie Mae is now allowing bank attorneys up to 450 days (about 15 months) for lawyers to complete a foreclosure before fines are levied.  The previous time limit was 185 days, or about six months.

The increased time needed to complete a foreclosure legally and correctly against a homeowner is due in large part to Florida foreclosure defense attorneys working to protect the rights of South Florida homeowners, according to Roy Oppenheim.

Obama Blames Wells Fargo, Bank of America, Chase for Modification Failures

The three largest U.S. mortgage lenders are getting some heat from the Obama administration for the failures of the federal foreclosure-prevention program, according to The Associated Press.

The lackluster performance of Wells Fargo, Bank of America and Chase with helping homeowners lower their mortgage payments has led the Obama administration to remove financial incentives it had given these lenders.

Only about one-third of the 1.4 million people who applied for mortgage modifications through the federal program have had their payments lowered permanently.

Angry Homeowners ‘Foreclose’ on Lenders

Owners of a house in Florida have engineered a “reverse foreclosure” against a Bank of America branch in Naples, according to The New York Times.

The homeowners paid $165,000 in cash to buy their home from the bank and never borrowed against it. But last February, the bank began foreclosure proceedings against them.  The homeowners hired a Florida foreclosure defense attorney and the case against them was dropped, however they were able to recover a judgment for $2,500 in attorney’s fees against the bank.

When the bank didn’t pay, the homeowners’ lawyer showed up at the bank with sheriff deputies and a moving truck to clean out the building.

The bank eventually settled with the homeowners for more than $5,700 to cover the fees and additional costs.

When the real estate market collapsed, Miami’s downtown epitomized the worst excesses of the building boom. Glittering new towers sat mostly vacant. Today Miami’s downtown real estate is booming and bustling with life and commerce thanks to foreign investors and renters.

A report by the Miami Downtown Development Authority indicates that 85 percent of new condo units are occupied. Downtown Miami’s population now numbers about 70,000 compared to 40,000 ten years ago. In spite of Miami-Dade’s 13.2% unemployment rate, downtown bars, shops and restaurants buzz with activity at the end of the workday. Sales at the swank Icon Brickell average 47 units a month.

The bad:
Clearing the backlog of foreclosures slows again as some delinquent homeowners successfully maintain that their mortgage companies can’t prove they own the loans, therefore forfeiting their right to foreclose. After last fall’s robo-signing debacle, many homeowners are waking up and realizing their banks are guilty of sloppy practices at best and forgery at worst.  Oppenheim Law continues to see banks dismiss foreclosures.

And the ugly:
Double Dip Housing is no Ameri-cone Dream
As South Florida housing prices hit a new low, the The New York Times and Wall Street Journal chime in unison with a cherry on top: Goodbye, American Dream. It seems renting is the new ‘black’ in real estate fashion as desperate sellers watch not-so-desperate buyers sit on the sidelines waiting for the bottom to hit; while they rent in Miami luxury.

The S&P/Case-Shiller National Index, released today, indicated prices nationwide fell 4.2% in the first quarter after declining 3.6% in the fourth quarter of 2010, in spite of increases in 2009 after the home buyer tax credit and early 2011.

Today’s news is another blow to the economy as it struggles to gain its footing. Typically, a rebound relies on consumer spending, including home buying, which then triggers large durable good orders like washers, dryers and furniture. But even as the economy reluctantly begins to correct itself, homeownership has continued to decline to levels not seen since 2002. Experts point to obvious factors such as foreclosures, unemployment and underwater mortgages, but also “a change in the American psyche,” meaning even those who can afford to buy are holding off, scarred by the impact of the collapse.

Another 5 percent drop in home prices will push the number of underwater borrowers to 28 percent, says CoreLogic Inc. 23 percent of U.S. homeowners were underwater at the end of 2010. A 10% drop will leave more than one-third of all U.S. homeowners with mortgages upside down.

”Once upon a time,” said Pete Flint, chief executive of the housing Web site Trulia to The Times, “owning a home was a symbol you had made it. Now it’s O.K. not to own.”

If the survey conducted by Trulia and RealtyTrac is any indication, the masses agree. One third of respondents expect the market to recover in 2014 or later.

Economists agree that a full recovery will take years, and require faster growth, decreased unemployment and a return of consumer confidence. Today’s Wall Street Journal points out a bright spot: home affordability is returning to pre-bubble levels in several markets, including Cleveland, Atlanta, and Las Vegas. In addition, mortgage rates fell to their lowest level of the year.

Many industry experts, including our very own From The Trenches guest Pat Sessions, believe last year’s recovery was artificial and we have yet to hit bottom in the real estate crisis. Chief Executive of Radar Logic Michael Feder agrees: “The market showed a little stability that was largely stimulated by the tax credit, but that stability was very short-lived,” Feder told The Journal. “The fact is we have never really started to recover.”

Oppenheim Law will continue to bring you the latest perspective on real estate news as it happens. Join the conversation on Facebook or Twitter for updates in real time.

With the major banks virtually halting all of their foreclosures due to the document mill scandals, the fees have dried up and now we can see the impact of the courts falling asleep at the switch. The tremendous irony in the matter is that the failure of the courts to properly scrutinize fraudulent foreclosures, leading to the halting of new foreclosures and the drying up of the courts’ fees, would have lead to new foreclosures. Only this time, court employees would have been processing their own foreclosures. According to the Sun-Sentinel, most of the hardship of the court furloughs would’ve been felt by low income employees who are already struggling to make ends meet.

Thankfully the state has stepped in to avoid this mess and hopefully the courts will learn not to be too reliant on foreclosure filing fees in the future. Maybe they will even make sure that foreclosures aren’t fraudulent before kicking people out of their homes and denying them their constitutional right to due process.

While South Florida is #1 for mortgage fraud and foreclosure settlement talks between banks and the Obama administration appear futile at best, this week’s new was not all doom and gloom.

Check out Oppenheim Law’s and Weston Title’s picks in the week’s winners and losers for Florida foreclosure, real estate and the economy.

Winners

Pending home sales up 18% in Miami-Dade
Pending home sales rose 18 percent in Miami-Dade County over the course of the past month, according to new data released today by the Miami Association of Realtors.

Pending home sales, which include single-family home and condominium unit sales, were also up 3.24 percent month-over-month in March, the figures show.

“Increased pending sales reflect the existence of pent-up demand and should result in strengthening home values as distressed housing inventory continues to be absorbed,” said Jack Levine, chairman of the board of Miami Realtors.

Hiring Shows Growing Strength
The American job market is starting to show some muscle, according to The Wall Street Journal.

The jobless rate, our most politically salient measure of economic health, edged down to 8.8% in the fourth consecutive monthly decline despite the fact that more Americans entered the job market.
“It’s a very solid report that shows the labor market gaining momentum,” said David Greenlaw, an economist with Morgan Stanley in New York.

The public sector remained a weak point, as local governments shed 15,000 jobs last month in an effort to close budget gaps, but many other sectors showed strong growth, according to The Wall Street Journal.

Professional and business services gained 78,000 jobs. Factories added 17,000 jobs, while health care added 37,000. Over the past 12 months, health care has added an average of 24,000 jobs a month.

Losers

South Florida is #1 for Foreclosure Fraud
South Florida is first in the country for the number of mortgage fraud suspicious activity reports per capita, according to a new report from the Financial Crimes Enforcement Network and The South Florida Business Journal.

The region, which recorded 11,833 such reports last year, also leads the nation in Medicare fraud and auto insurance fraud.

Overall, mortgage fraud reports rose significantly in 2010, with 70,472 reports filed last year, up from 57,507 in 2009.

In Foreclosure Settlement Talks With Banks, Predictions of a Long Process
Little was settled in the first round of foreclosure settlement talks, according to The New York Times.

As negotiations begin over new rules for homeowners who are in default, experts all agree that progress is going to take time.

But lengthy negotiations work to the banks’ advantage, according to The Times.

“The banks’ strategy is to run the clock,” a Georgetown University law professor, Adam Levitin, said. “The chances of a settlement that meaningfully reforms mortgage servicing and makes the banks pay an appropriate price for illegal conduct are rapidly slipping away.”

Draw

Subprime Bonds Are Back

As the economy recovers, long-term investors are willing to take on more risks and subprime and other residential mortgage bonds that helped trigger the financial crisis are back in vogue, according to The Wall Street Journal.

The stock market ended its best first quarter since 1999 last week, with the Dow Jones Industrial Average closing up 6.41% on the quarter.

The willingness to take on risk is helping ordinary borrowers, too, by leading banks to make more nontraditional loans, such as jumbo mortgages, and to charge lower interest rates for them.

While it is encouraging that the markets are continuing on an upward swing, cautious optimism is needed any time subprime bonds are involved.

So, while it looks like housing values keep dropping around the country and new construction is also off, South Florida real estate may have hit rock bottom or close to it.

It seems that South Florida’s position as an international location is encouraging foreigners to swoop in and purchase homes and condos that based on an international standard are outright cheap.  Of course; a strong stock market, a dollar that is fairly weak and the prospect of huge government defecits that forshadows inflation, only helps.

That was then, this is…then or now?

Last week, The Wall Street Journal published an article about Debtors’ Prisons in 2011. Currently, several U.S. states allow borrowers who are behind on credit-card payments, auto loans and other bills to be jailed. However lawmakers, judges and regulators are beginning to crack down on this practice, which Foreclosure Defense attorney Roy Oppenheim calls “illegal, unconstitutional and un-American.” In this video, Oppenheim explains how that happens and how to make sure that that doesn’t happen to you.

So how can Florida homeowners avoid becoming a part of this debtor nation? Roy Oppenheim says, “Don’t put your head in the sand, by ignoring the situation. If you’re in foreclosure, for example, make sure that deficiency judgment isn’t entered against you. Get legal counsel and make sure you know your rights.”

In the meantime, here are the top 2010 headlines from South Florida Law blog:

1.      What to Tell Our Kids About Foreclosure: From the Heart

2.      Roy Oppenheim on “Asset Protection” Discusses Deficiency Judgments and Homeowner Negotiating Power

3.      Even More Embarrassment for Banks: Foreclosure Fraud

4.      Roy Oppenheim on Strategic Foreclosure: Shay’s Rebellion 2.0

5.      Back To School: Learn the ABC’s and D for Deflation?

6.      How the Banks Aren’t Playing Fair: CBS News, Roy Oppenheim Talks with Investigative Reporter Stephen Stock

7.      Roy Oppenheim to the Wall Street Journal: “Your editorial will make future investors think twice about entire system”

8.      Cracked! Humpty Dumpty, Chase, and GMAC: The Bank Mortgage Foreclosure Fraud Crisis Continues to Fall by Roy Oppenheim

9.      The F Words: Fraud and Foreclosure – Watch Roy Oppenheim’s Workshop Replay on Bank Fraud and Mortgage Foreclosure

10.    Foreclosure Defense in a New York Times Minute with Roy Oppenheim

Your editorial “The Politics of Foreclosure” (October 9) misses a number of significant legal as well as macro economic issues. In fact the editorial’s latent sarcasm (i.e., “the affidavit was supposed to be signed by the nameless, faceless employee in the back office who reviewed the file, not the other nameless, faceless employee who sits in the front”), suggests a clear lack of respect for (i) the protections afforded to all of us by the United States Constitution, (ii) State Rights and (iii) how the real property recordation systems throughout the US have played a critical role in capital formation for 150 years.

As a real estate attorney in Florida who previously practiced on Wall Street, I personally know of countless cases where the bank sues the wrong homeowner for foreclosure or where two banks claim to own the same mortgage.  It seems that you are significantly discounting the importance of procedural due process that requires that an affidavit be sworn under oath and that an individual has personal knowledge of the amounts owed by a borrower. Further, you are making undue light of notary fraud and perjury (both criminal acts) when an individual attests to another’s signature with knowledge that such attestation is false.  Such conduct is not only a violation of state law but also of various federal laws such as The Fair Debt Collection Practices Act, violations under the Federal Trade Commission for Unfair and Deceptive Trade Practices, mail fraud, wire fraud, and possibly racketeering. These “mistakes” are not mere technical issues but go to the core of our legal system.

Your editorial completely disregards an important constitutional concept of legal standing.  Standing is the substantive due process notion of what a party must do in order to have the legal right to bring a legal action through our judicial system. Without the protective concept of standing, anyone could sue anyone at any time, ultimately causing legal anarchy. To fabricate standing, the banks used fraudulent assignments, bad notaries, and allowed for perjured documents to be presented to judges. The banks were forced to engage in such conduct because just like Humpty Dumpy the banks broke the mortgage into different parts, splitting the Note from the Mortgage by assigning the Mortgages to a third party (MERS) and selling the Notes to another entity. The Notes were then further sold off in traunches. However, to put the “egg” back together again in order to foreclose and have standing required a whole lot of bogus documents that were never anticipated by Wall Street.

As for State Rights, had President Obama not vetoed a bill that required each state to require the other to respect the other’s notary requirements, the banks’ would have run off to the state that has the least protective and most flimsy notary rules. We have seen this script before when South Dakota became the home of choice for almost all credit card issuers; residents in other states wound up with usurious interest rates sometimes in excess of 30 percent a year. It seems that your editorial board is not consistent when it comes to advocating for the rights of States to protect its own citizens in the manner such states deem most appropriate.

Finally, had mortgages not been permitted to be assigned behind a black veil of MERS where the assignments are not made public as with a formal state-run recordation system, most of the problems we are now addressing could have been avoided.  In his acclaimed book The Mystery of Capital, Why Capitalism Triumphs in the West and Fails Everywhere Else, Hernando de Soto articulates clearly that America’s and the West’s protection of property rights and its open and transparent recordation system has been the true engine of inbound capital flows that allowed America to go from a developing nation 150 years to one where the dollar, at least for now, is the world’s reserve currency.

Let me be absolutely clear: Your editorial will make future investors of real property, particularly foreigners, think twice about our entire real property system.  Questions will be asked for a generation how banks literally hijacked the judicial system turning it into their own collection system while dispensing with the rules of law that have protected property right owners from the day our great nation was founded. Had we just let our legal system do its job we would have made it out of this mess.  Next time, please think twice about throwing the baby out with the bath water just because you think you know who the real culprit is here. Remember, had this whole house of cards that started on Wall Street not come tumbling down: Humpty Dumpy would still be perched on his wall today and homeowners would not be struggling to pay their mortgage because they lost their livelihoods. Maybe, just maybe, the banks are now getting their just desserts.

And if you believe the latest news that Bank of America is not too worried about the looming tsunami of mortgage repurchases because it is socking away tons of cash, think again.

From the trenches

Roy Oppenheim

PS: In case you missed it, here’s a link to Roy Oppenheim’s interview with the BBC about the foreclosure fraud scandal.

It just so happens one of my clients, Steven Olson, was also a phone call away, ready and willing to talk to Hagarty about how he came to his conclusion to stop paying and walk away.

This is a toxic time for homeowners in the real estate market. In good times, it would be unthinkable to stop paying the mortgage, but today it is the right option for some. Read the full story Debtor’s Dilemma: Pay the Mortgage or Walk Away on the Oppenheim Law News Room or in today’s Wall Street Journal on page A22.