Foreclosure, Short Sales, Deficiency Judgments — 2011’s Top 10 Headlines: Pt.1

In our last blog we talked about the stories that resonated with Roy Oppenheim in 2011, but what stories mattered to you?

We reviewed the most popular stories on the South Florida Law Blog this year and came up with our list of the top 10 posts for 2011

# 10 — Florida Deficiency Judgments FAQs . . . By Popular Demand

Some of Oppenheim Law’s most popular videos and blog posts this year were on the topic of deficiency judgements. Understanding deficiencies and the Florida rules which pertain to them are key to avoid getting a deficiency judgment.

The unpaid mortgage debt associated with a residence is a deficiency. A bank can foreclose and force a judicial sale of a home if the mortgage borrower fails to pay the associated mortgage debt. The deficiency is the difference between the proceeds from the sale and the remaining mortgage loan balance. A deficiency can also result from a short sale, which is an alternative to foreclosure.

The rules pertaining to deficiencies differ from state to state. In Florida, if the bank is successful in obtaining a deficiency judgment, it will be recorded in the public records and collectable for up to twenty years. To avoid the possibility of getting a deficiency judgment, before deciding to walk away from your home, hiring a good foreclosure defense attorney is necessary.

#9 — #Fail – Government Plan to Help #Florida Homeowners

At first glance, it looked like Florida foreclosure victims were finally getting the help they need from the feds. Reading the fine print it looks like if we had to describe this in one tweet word: #fail.

The two agencies that are in charge of overseeing the Independent Foreclosure Review went have gone out of their way to keep the details of this program secret. The most alarming issue is the possible conflict of interest between the consulting firms that were chosen by bank regulators to administer the foreclosure reviews. The fact is these consulting firms are actually getting paid by the banks.

The same banks that ultimately led the economy into the mortgage crisis were placed in control of deciding which homeowners are entitled to compensation for the banks own wrongdoings. It is doubtful homeowners will receive any meaningful relief from this program.

#8 — Law Review Executive Summary: Black Magic of Securitized Trusts

Deconstructing the Black Magic of Securitized Trusts by Roy D. Oppenheim and Jacquelyn K. Trask-Rahn gives an in-depth analysis of the process of securitizing mortgages and how it has gone awry. The article begins with a focus on the rise of subprime lending, the impact that subprime loans, such as “interest-only” and “negative amortization,” had on the American Dream of home ownership, and how “securitizing” these loans led to a false sense of security for homeowners and investors during the housing bubble.

During the spike in foreclosure filings that followed the implosion of the market, in an effort to prove proper standing to bring the action, banks began producing tens of thousands of assignments predating the filing of the foreclosure action. This mass production of assignments proved that trustees had not properly transferred the mortgages from inception thus the banks laced standing to foreclose.

#7 — Banks Desperately Seeking Short Sales

Borrowers who are in or nearing foreclosure are being offered thousands of dollars to short sale their homes. Some are even being offered $35,000 to get rid of their homes, and quickly. This situation presents an intriguing insight into the way banks are thinking at the moment. Banks would rather pay you and take a loss rather than forecloseon homes.Bank of America’s chief economist, Mickey Levy, while speaking privately, spoke of the concern that the 1.8 million bad loans in the nation will drive down the market if they go into foreclosure. Such fears help explain why the banks are desperate to avoid foreclosing on homes. In the end, this situation is a win-win. Not only do banks protect home prices, but they stand to get back more money quicker from a short sale than a foreclosureand homeowners get out of their houses with some cash in their pockets.
Number 6 on our list also dealt with short sales, as Oppenheim Law touted 2011 as the “Year of the Short Sale,”. Two of the nation’s largest lenders, Wachovia and JP Morgan Chase, chose to forgo the lengthy foreclosure process by giving select homeowners $10,000 to $20,000 to complete a short sale, according to The Sun-Sentinel.

Oppenheim Law has represented hundreds of homeowners’ short sales over the past few years and as a result has seen millions of dollars of homeowner deficiencies waived by the banks, who are becoming more eager to avoid foreclosure and complete short sales.

On New Year’s Eve we’ll post our top 5 stories for 2011 — Happy Holidays!

Tags: 2011, deficiency, deficiency judgment, foreclosure, foreclosures, judgments, law blog, law review, loss mitigation, mortgage, mortgage loans, Oppenheim Law, Roy Oppenheim, short sale, South Florida, South Florida Law Blog, subprime lending, subprime mortgage crisis, top 10

One response to “Foreclosure, Short Sales, Deficiency Judgments — 2011’s Top 10 Headlines: Pt.1”

  1. SFJD says:

    It’s definitely been an eventful year for legal news. In a few cases, there have been interesting intersects between legal news, and world news.