Things are looking up for Florida homeowners still in foreclosure in 2015. As demonstrated by recent decisions, Florida courts are beginning to hold banks to a higher standard when it comes to proving standing. Continue reading
Back in June of 2012 I wrote a column briefly explaining the difference between judicial and non-judicial foreclosure states and I debunked the myth that a housing recovery could only be had if a state was a non-judicial foreclosure state. I explained that the idea of individuals having to give up their property rights is not a necessary ingredient in a housing recovery.
Today, two years later, my theory still holds true. Florida, one of twenty-two non-judicial foreclosure states, continues to experience a robust rebound. Guess what, we did it while maintaining individual property rights and allowing homeowners to be heard by a detached and independent judicial system and making sure that the banks are playing by the rules.
Yes, it is true that non-judicial states are experiencing a faster recovery. In non-judicial foreclosure states, homes with defaulted loans move into new owners’ possession relatively quickly. Homes are less likely to be tied up in court proceedings and deteriorate due to neglection and ultimately drive down prices of surrounding properties. However, the benefits of having an out pacing recovery do not come without their costs.
Keep Tabs on the Integrity of the Banks:
The race back to 2007 peak home prices is not the only statistic that matters. We must make sure that we get to those levels, and surpass them, in a sustainable fashion. What good is it getting to the top and knowing that you are destine to fall? A key element in assuring such stability is to keep tabs on the integrity of the banks. Banks have obligations to their share holders to realize growth quarter after quarter. As we have seen, banks are willing to fulfill these obligations at the detriment of our society as a whole. If it was not for judicial foreclosure states and their ability to test the integrity of banks, robosigning and other fraudulent acts by banks would have never been discovered.
WEST PALM BEACH — Florida homeowners received more than $9.2 billion in home loan help through the historic National Mortgage Settlement negotiated last year, exceeding expectations by $800 million, according to a final progress report released Thursday.
The payouts, which came in the form of reduced loan debt, lower interest rates and allowing for short sales, were shared by 119,411 borrowers statewide, resulting in an average savings of more than $77,000 per homeowner.
Florida Attorney General Pam Bondi was a lead negotiator on the settlement made with the nation’s five largest banks to atone for mortgage- and foreclosure-related offenses. It is heralded as a real estate rejuvenator by some _ allowing borrowers to stay in their homes with lower mortgages, or facilitating short sales.
But others in Palm Beach County said the awards seemed arbitrary and that success was like winning a golden ticket.
“In many cases, the clients didn’t need the help. In other cases, they had already lost the home,” said Kevin Maher, community outreach director for West Palm Beach-based DebtHelper.com. “To be honest, it seemed almost random.”
Still, the agreement was the broadest effort yet to help the nation’s struggling homeowners. Nationwide, $51.1 billion in mortgage relief was doled out to 642,130 borrowers with the average homeowner receiving $79,704 in savings.
The five banks in the settlement — Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial _ were responsible for awarding varying amounts of relief. Bank of America gave the most at $27.8 billion.
Much of the aid came in the form of forgiveness of second loans. In Florida, $3.4 billion in second mortgages was erased for 49,808 borrowers.
Banks faced criticism early on for focusing on the secondary liens because it was money they likely would have lost anyway in a foreclosure, but it also allowed borrowers to more easily negotiate a loan modification on their primary mortgage, said foreclosure defense attorney Roy Oppeheim.
“We had a lot of second mortgages wiped out and that was like manna from heaven for my clients,” said Oppenheim, who is still critical of the settlement for being too lax on banks. “They got credit for things they would have already done without really paying for the robo-signing fraud that they committed.”
Delray Beach homeowner Jerry Rappelets said he was shocked when Bank of America hacked $120,000 off his primary mortgage, reducing his monthly payment by $900.
In the construction business, Rappelets and his family suffered financially when he was laid off and then got into a car accident that kept him from working for eight months. The mortgage reduction allowed him to stay in his home.
“It’s the house that my son came home to when he was born,” Rappelets said. “We’ve been there eight years.”
Thursday’s report was the fifth from the settlement’s monitor Joseph Smith. It covered the period from March 1, 2012 to June 30.
Because lenders do not earn a dollar-for-dollar match on relief provided to borrowers, the nationwide $25 billion deal has provided much more in mortgage aid to homeowners. For example, for every dollar forgiven by a lender on a second mortgage, it receives only a 10-cent credit toward its required settlement amount.
Smith cautioned that Thursday’s numbers were self-reported and had yet to be confirmed by his office.
This summer, banks were scrutinized by attorneys general for failing to meet customer service requirements that are outlined in the settlement.
In June, Bondi wrote Bank of America that she was ready to go to court to enforce the customer service side of the agreement after hundreds of homeowner complaints and affronts to her own staff. She said her office is having to get involved in cases where there are common-sense solutions that should be easy to reach.
In one situation, Bank of America allegedly refused to speak with a homeowner’s Legal Aid lawyer because of a “simple dispute over a ZIP code.”
On Thursday, Bondi said she will remain “diligent” in her efforts to ensure banks meet their obligations.
Real estate attorney and foreclosure defense attorney, Roy Oppenheim left Wall Street for Main Street, founding Oppenheim Law along with his wife Ellen in 1989 in Fort Lauderdale, Florida, and is vice president of Weston Title and creator of the South Florida Law Blog, named the best business and technology blog by the South Florida Sun-Sentinel. Follow Roy on Twitter at @OpLaw or like Oppenheim Law on Facebook .
Maybe it is because foreclosures were merely a blip on the radar during the presidential election.
Maybe it is the fact that the home prices are looking healthier than they have in years.
Regardless, some people have been lulled into a false sense of security about the state of foreclosures here in South Florida. To my amazement, I will get the occasional phone call, asking if we are still doing foreclosure defense.
The short answer is, of course! While there are less homes starting the foreclosure process, there remains a backlog of foreclosure cases in Florida and in other judicial foreclosure states. Banks are still trying to illegally throw people out of their homes, and so I am still defending many of those homeowners.
Florida remains on the top of the list for states with foreclosure activity, with a filing rate more than double the national average. In Dade County, there are still 60,000 foreclosure cases on the books. In Broward there are 43,000. 1,800 new foreclosures were filed just in Broward County alone last month, which is a substantial increase.
This is partly due to the return of the zombie foreclosures. Those are the David Stern files that were dismissed by the court. Now those cases have now been transferred and they are coming out of storage.
New attorneys are taking these cases, and those homeowners will have to dig in their heels and start their fight all over again.