Miami Foreclosure Lawyer Blog

Palatial properties across the country are more frequently meeting the same fate as millions of average houses in recent years: foreclosure.

The national media is reporting a rise of million-dollar foreclosures in Miami and across the country.

Our Miami foreclosure attorneys know of no class of people who have been immune to the explosive burst of the housing bubble. Although the wealthiest may not have been impacted in the immediate aftermath, the number of mansions being foreclosed upon has hit a steady stride.

According to CNNMoney, many wealthier families are in fact now losing their homes at a faster clip than the rest of the country. A large percentage of these individuals are taking this step voluntarily, seeing that there is no point in pouring more money into a home that is worth more than what they owe on it - no matter how grand and gorgeous it is.

RealtyTrac reports that there were 36,000 million-dollar homes foreclosed on last year. True, that's less than 2 percent of the total number of foreclosures in the U.S., but it does represent a far larger amount than in years prior. The vice president of RealtyTrac was quoted as saying that these plush properties account for a bigger piece of the pie.

In fact, when it comes to foreclosures on homes worth more than $1 million, the rate has risen by 115 percent in the last five years. For homes valued at more than $2 million, that figure soared by nearly 275 percent. Now compare that to foreclosures of homes that are worth between $500,000 and $1 million, which dropped by a rate of more than 20 percent.

As our Miami foreclosure attorneys are aware, high-end homeowners were able to insulate themselves at least for a while by delaying a foreclosure. But like everyone else, they couldn't permanently postpone the process.

Originally, it was the case that people with more money and assets had more leverage in negotiating with banks to keep their homes. For many, though, it became a money pit. No matter how much they paid, the home would never be worth what they bought it for.

That's why many of these wealthier homeowners have begun choosing what is known as a strategic default. This means that even though they might be able to keep up with those inflated monthly mortgage payments, it's simply not worth it to continue to do so. They may not be facing a choice between food on the table or a roof over their head, as someone in a lower income bracket might be. But it comes down to making an executive decision.

Unlike other neighborhoods that suffer as a result of a glut of foreclosures, a few homes slipping into default in a more well-off neighborhood isn't likely to have a direct hit on property values for surrounding homes. In fact, blight is much less likely in these areas, which means these properties will be available for others to snap up at more reasonable rates. That could help continue to fuel our economic recovery.

Continue reading "Miami Mansion Foreclosures on the Rise" »

If the U.S. government had intended to penalize banks for their part in the Miami foreclosure crisis, it has failed miserably.

In fact, according to a number of recent media reports, the $25 billion settlement that was announced earlier this month - the one that was supposed to make banks pay for all the greed and abuses that led to the Great Recession - is actually going to be a windfall for banks.

You read that correctly.

This "sweetheart deal" is going to be primarily funded by taxpayers, and the banks could even turn portions of it into a profit.

Our Miami foreclosure attorneys can no longer even feign surprise.

This information was most recently reported by The Financial Times in Washington, where reporter Shahien Nasiripour got his hands on the provisional agreement, which hasn't yet been made public by the government. According to Nasiripour, there is a clause in the agreement that allows these banks - Bank of America, Wells Fargo, JP Morgan Chase, Citigroup and Ally Financial - to count future loan modifications toward their obligations for restructuring under the new settlement. What that means is that HAMP (the Home Affordable Modification Program) will provide taxpayer money as an incentive not only for banks, but to troubled borrowers and third-party investors.

"Scandalous" is what Democrat Neil Barofsky called the clause. Barofsky is the former special inspector-general of the asset relief program. He was further quoted as saying that this development debunks any previous notion that this deal was about justice.

These banking officials should be facing jail time. Instead, they are enjoying yet another windfall, funded by the already-burdened taxpayers.

For example, Bank of America is going to be able to use the modifications under HAMP for $7.6 billion in assistance for borrowers. Because of the HAMP agreement, the bank is going to get government money for saving the borrower from default under the settlement.

So for writing down $100 of principal on a loan payment, the banks would get anywhere between $21 and $63 back. Government officials defend this practice, saying it allows for a greater number of people to be helped. But we already know that under this $25 billion settlement, about 750,000 people who were improperly closed on are going to get a $2,000 reimbursement - which equals less than the cost of first month's rent and a security deposit for those who were forced to move.

Add to this the fact that already, the banks collectively are really only responsible for about $5 billion of the settlement - the rest is going to come from investors in the form of mortgage-backed securities (many of those being pensioners and retirees).

It is asinine that someone can steal a few hundred dollars worth of items, and be charged with a felony, when meanwhile, banks have heisted billions from American taxpayers, and are in fact being rewarded.

Continue reading "Banks Face Few Sanctions for Role in Miami Foreclosure Crisis" »

With nearly half of all Miami homeowners underwater on their mortgages, it's no wonder Floridians remain among the most skeptical of a recent $25 billion settlement between the banks and U.S. government.

The goal of the settlement was to help address some of the most egregious abuses by banks, and particularly those that led to the housing burst that has so many struggling with a foreclosure in Miami. As we have written about previously in our Miami foreclosure blog, the settlement is supposed to ease the burden on some of the hardest-hit Americans, as well as serve as a penalty for banks whose greed knew no depths, ultimately resulting in a global recession.

Miami foreclosure attorneys have already labeled this settlement a "sweetheart deal," which is of little benefit to consumers. Now, we have discovered there is even more reason to be suspicious.

According to Reporter David Reilly of The Wall Street Journal, the actual details of the settlement have so far been held up from public release, with banking and government officials saying the deal should be filed in court within the next several weeks.

Government officials came out strong in their announcement of the deal a few weeks ago. They played up the fact that attorneys general from 49 states had signed off on the deal. They heralded the fact that mortgage rates will be reduced for about 1 million homeowners, who scramble to make monthly payments that are more than the home is worth. They even touted the fact that about 750,000 heads of households that were improperly foreclosed on will receive a $2,000 restitution payment.

Never mind that the latter won't cover the cost of first month's rent and security deposit for a homeowner who was forced to downsize.

Never mind that having your mortgage reduced now isn't going to suddenly spring these people from the debt they have been accruing for years, while bankers lined their fat pockets.

And never mind that while $25 billion may seem like a decent chunk of change, it is little more than a drop in the bucket to these banks, meaning there is little incentive for them to halt the practices that led to these massive issues in the first place.

Now, the government and the banks are dragging their feet on releasing an actual copy of the deal. As Reilly put it: "The devil will be very much in the deal's details."

We'll give them this: It is a very complex situation that involves a great many parties. But without the ability to pore through the actual documents, neither taxpayers nor investors are going to have a real handle on what the banks received or what the various government agencies doled out, in return for this $25 billion.

According to Reilly, one of the most crucial aspects of the deal will be to what extent the banks are going to be able to skirt any future litigation resulting from these mountains of abuses. Officials may have talked up the fact that this deal will prevent any future abuses, we don't know how firm those promises are unless we can see the exact terms of the settlement.

Make no mistake about it, struggling homeowners are still best served by turning to a Miami foreclosure defense attorney for help.

Continue reading "Miami Foreclosure Suits Hinge on Disclosure of $25 Billion Bank Deal" »

An audit of several hundred foreclosures in Northern California uncovered a host of legal and ethical violations, mirroring the situation with foreclosures in Miami and across the country.

Our Miami foreclosure defense attorneys know how difficult it can be to trudge through the foreclosure process. Many people, not wanting to lose their homes or damage their credit, continue to pay on homes they'll likely never be able to afford and are ultimately going to lose. Their money, essentially, is wasted.

It is even more infuriating when information like this emerges, showing that the banks, who aren't playing by the rules, continue to profit from the housing crisis that has plagued homeowners across the country, and particularly in South Florida, since 2008.
In these cases, officials in San Francisco analyzed data from about 400 foreclosures that had happened between January 2009 and November 2011 in that region. They found that nearly every single one involved at least some illegal or suspicious action, the New York Times reported.

The negligible actions ranged from infractions like failing to let borrowers know when they had gone into default, as the law requires, to seizing and selling houses that the banks had never proven ownership of.

In fact, in 84 percent of those cases, researchers said they found what appear to be very clear violations of law on the part of the lenders. And in two-thirds of the cases, there were at least four irregularities or violations. A Miami real estate attorney can turn the tables on the banks, using these discrepancies to defend the homeowner.

A Suffolk University Law School professor, Kathleen Engel, was quoted by the Times as saying that if there had been any doubt before about whether the quandary with foreclosure loan documents was confined to a few instances, this information should blow that theory out of the water.

The report emerges just days after the federal government signed a $26 billion settlement among five major banks attorneys general in 49 different states, including Florida. The settlement is supposed to cover the banks' blunders (intentional or otherwise) over the foreclosure process. The settlement outlines a number of conciliatory measures the banks have to take, and those include paying $1.5 billion to former homeowners who were unfairly taken out of their homes. That breaks down to about $2,000 for each homeowner - hardly a drop in the bucket for someone who may have spent far more than that trying to hang onto their homes, their credit and some sense of stability.

Moreover, there are already reports of states taking the vast majority of this settlement money and dumping it into the gaping holes in their budgets. In other words, states took a payday and joined the growing group of those who have profited on the backs of homeowners.

What the study suggests is not necessarily that each of these homes shouldn't have been foreclosed upon or that every single bank has committed wrongdoing. However, it does seem to illustrate the growing trend - as our Miami foreclosure attorneys have seen - of instances in which banks acted improperly and even illegally interacted with homeowners. This is why having an experienced lawyer on your side is so important in these cases, because we are familiar with the trends - and the tricks that are pulled by these financial institutions to maximize their profits.

Researchers in California rightfully noted that just because the banks have settled over these issues does not grant them immunity to continue to commit these illegal acts. In fact, city officials in San Francisco intend to forward their report not only to the state's attorney general's office, but also to federal authorities, who we hope would look into the possibility of filing criminal charges against these financial institutions.

And individual homeowners can still hire an experienced Miami foreclosure defense law firm -- and Negotiate from Strength!

Continue reading "Miami Foreclosures Subject to Bank Abuses, California Audit Suggests" »

When a former Countrywide Financial employee was on the witness stand late last year, she testified that the bank tried to buy her silence about its part in the Miami mortgage meltdown.

She refused to cooperate, and the bank fired her. She turned around and sued the banking giant on federal whistle blower violations - and won.

While this single employee was awarded back pay, it's really a small drop in the bank's bucket. Our Miami foreclosure attorneys believe the whole instance raises a much larger question: Why does the U.S. Justice Department not go after these banks and hold them criminally liable for breaking the law?

Even though it's been proven that financial misrepresentations and fraud played an integral role in the financial crisis we find ourselves in, not a single major financial firm or Wall Street executive has been brought up on charges.

As the former bank employee was quoted as saying to CBS News: "They asked me to sign a 14-page document that would basically buy my silence in exchange for a large amount of money."

She wondered how many people the bank had already paid off.

It had been her job, the news station reported, to follow-up on allegations of fraud against company employees, and ensure those allegations were reported to both the U.S. Treasury Department, and the company's board of directors.

What she found during the course of her employment probably won't surprise you at this point: She testified that fraud was systemic at the company. It wasn't just one or two people, either. It was entire branches and regions of people, and it involved forging documents to inflate a person's income so that they would be able to get a home loan - a loan everyone knew they couldn't afford and weren't qualified for. This is the practice that everyone now knows led to the financial crisis that hurled our economy into a recession, and left millions of Americans homeless and jobless.

And yet, there has not been a single prosecution.

This is also despite the Sarbanes Oxley Act of 2002. This is the act that was passed by President Bush in the wake of the Enron and Tyco scandals, and it was intended to restore the population's faith in big corporations. The act imposes very specific rules for corporations (including banks), which require CEOs and CFOs to certify under oath as to the accuracy of their financial statements, as well as have established internal controls to make sure all relevant information is passed on to investors. If you falsely sign one of these statements, it is a crime, for which you could serve up to five years in prison. The whole intention was to prevent corporation leaders from being tempted to sign fraudulent paperwork to enrich themselves, at the expense of everyone else.

It hasn't seemed to matter.

Justice Department officials told CBS News that sometimes these cases take years to bring forward, and not to count them out yet.

Our Miami foreclosure attorneys aren't holding our breaths.

Continue reading "Despite Miami Mortgage Fraud, Banks Escape Criminal Charges" »

Despite the fact that the government is touting the extension of the Home Affordable Mortgage Program (HAMP), the move is likely to have little effect in terms of slowing Miami foreclosures or helping struggling homeowners.

The government program, aimed to help homeowners, had been set to expire at the end of this year, but will now run through the end of 2013.

Our Miami foreclosure attorneys understand that while the Obama administration had promised 18 months ago that more than 4 million people would be aided by the modified loans, less than 1 million have actually been helped. Media reports indicate there were almost 24,000 loan modifications made nationwide in December - bringing the grand total to about 933,000 - falling far short of the 4 million initially promised.

So why extend a program that has clearly not been effective in its goals? Because it benefits the banks.

The Department of Treasury reports that 84 percent of the people who sought help through the HAMP received it. What they don't tell you is that often, people are sinking money into homes that - no matter what - they are not ever going to be able to afford. These are hard-working individuals who are hoping to maintain their credit and keep their homes.

The truth is, though, that many of these people are simply being squeezed for a few more mortgage payments on their underwater homes before they finally realize it's simply not worth it and give up. The reason is because many of these modifications are temporary. The person may make smaller payments for a set period of time, without penalty. But if a person isn't approved for a permanent loan reduction, he or she is still going to be responsible for the difference.

When they realize they still can't afford it, they are going to be in the same position they were in to begin with.

The HAMP program was introduced by the Obama administration in 2009 to help distressed homeowners get back on their feet in a housing market that was fast dissolving into quicksand.

While the federal government had set aside more than $30 billion for the program, only about $2.3 billion has been spent to date. Another $10 billion has been committed, but hasn't been paid yet.

Another issue that has been voiced by consumer advocates is that Fannie Mae and Freddie Mac, both government-owned mortgage lenders, are not required to forgive their borrowers' debt. Neither the recent move to extend HAMP nor the deal struck between the U.S. government and 49 state attorneys general address this issue.

One positive aspect to the HAMP extension and modification is that the criteria for eligibility has been somewhat relaxed. Before, the only people who were allowed to participate were borrowers whose monthly mortgage payments comprised at least 31 percent of their total income. Under the new rules, even someone with more affordable payments can qualify. The government's idea is to be able to also include those who are afflicted with other expenses, like credit card debt or hefty medical bills.

Continue reading "Miami Foreclosures Not Slowed by Federal HAMP Extension" »

The deal struck by state attorneys general throughout the country to address foreclosure abuses in Miami and across the U.S. has been touted by many as a victory for homeowners and taxpayers.

Our Miami foreclosure attorneys, however, believe that this is actually proof that the government is not looking out for the best interests of the so-called 99 percent. In fact, it is further evidence that the government is working on the side of big banks.

Here's what the media, including CBS Money Watch, is reporting: The federal government is settling for $25 billion with five major banks over mortgage foreclosure abuses. Mortgage loans will be reduced for about 1 million households, which are underwater on houses that are worth less than what these people owe. For another 750,000 Americans whose homes were improperly foreclosed upon, the banks will shell out $2,000.

But when you consider the average loan for just one of these homes is $180,000, this is a sweetheart deal. A $2,000 fine is less than the price of title insurance. Not to mention that criminal acts of forgery and fabrication on the part of these banks, who have made billions of dollars by scamming taxpayers, will not be punished with jail time. The $2,000 fee paid to homeowners is a slap on the wrist. It's especially frustrating considering that it's a very small consolation for people who are now out of a home, their credit ruined.

The only state not a part of the deal is Oklahoma.

Despite the fact that billions of dollars have been earmarked for homeowners, the money is actually only going to help a small percentage of the millions of people who are behind on their payments and facing a foreclosure. The rest will continue to struggle to make ends meet in a sagging economy, living in a home they can't afford - or having their home stolen out from under them by a powerful financial entity that may not have the legal authority to do so.

Additionally, those large banks already had money set aside to cover this settlement, so all of this is going to have little impact on the banks' every-day operations. That also means the punitive aspect of this settlement is almost nil. It's not going to be enough to jar the banks into consistent compliance. It's a great deal for the banks, which would otherwise spend much more on legal fees if these cases were brought forward with proper litigation.

It's also important to note that of the $26 billion that banks are ordered to pay - banks themselves will only cover about $5 billion. The rest of it is likely to come from security loans - namely, Fannie Mae and Freddie Mac - as well as insurers and 401k savings. That means the taxpayers, ultimately and once again, will be responsible to cover for the banks' messes.

Plus, there is the question of how will it be decided who gets the help. As it turns out, banks will be self-reporting this information to the government. What a joke! Our Miami foreclosure attorneys find it difficult to believe that the Obama administration - or any political players - actually believe the banks can be trusted to self-report with any integrity, considering their past record of fraud and abuses.

Contacting an attorney with experience in Miami foreclosures - someone who knows the system and the tricks bankers pull - can help put you on the path toward financial recovery.

Continue reading "Miami Foreclosure Attorney: AG "Sweetheart Deal" a Wash for Consumers" »

A recent article about the problems with the bank industry concluded that despite ongoing settlement talks between banks and state governments, foreclosure fraud and securitization fraud will continue for those involved in Miami foreclosures.

Miami foreclosure defense lawyers have witnessed the major problems with securitization of mortgages and how the buying and selling of mortgage loans has caused many problems with banks' abilities to prove who should be bringing a foreclosure action. This has created more frustration for distressed homeowners, who are stuck paying more for their home than it's worth.

The article suggests securitization fraud will continue to spread, even after a major settlement between banks and states goes through. The article also reports that New York Attorney General Eric Schneiderman, once a main opponent of the settlement, is now considering joining. Not coincidentally, Schneiderman was just appointed by President Barack Obama to a task force created to investigate banks and fraud. The Obama administration has been pushing for the settlement.

The article goes on to look at the major problems with securitization and how foreclosure fraud benefits those selling securities because it covers up the lies created by false documents that are used to take away people's homes. For investors, who are being promised big benefits, lying only becomes a problem if harm is done. If the foreclosure goes through, the harm is minimized. If the homeowner stays in the house and doesn't pay because there's a mix-up in documentation, the investors lose big money.

The basics of securitization is that sellers find investors and promise a profit. They take the money, pool it and buy mortgage loans. A trust is set up to receive payments from banks via homeowners and distribute payouts to investors. The banks are the trustee and oversee the trust.

But if there are problems with paperwork, including whether the trust actually owns the loans, the deal becomes moot. That's where the fraud comes in. In cases where the trust couldn't prove who owned the loans -- after they were transferred several times in MERS but not in local clerk's offices -- officials turned to creating false documents or fabricating paperwork to be able to foreclose.

The issue comes back to Schneiderman, mainly, because many of the trusts are in New York, which would give him jurisdiction. Many are also in Delaware, where Attorney General Beau Biden is opposing the settlement.

The problem with the settlement is that it is far too premature. Many states have done little investigating and don't know just how deep the problems are. Rather than holding banks accountable and looking into just how many problems they created with their lies -- both for homeowners and investors -- they are willing to drop it, give them immunity from lawsuits and take their money.

If the settlement is signed, there's nothing that stops banks from continuing these injustices. Rather than fully discovering all the problems, these banks are going to be allowed to get away with it in the future. And the settlement will protect them from lawsuits. Perhaps a sharply divided Congress -- that can't seem to agree on anything -- would be able to help.

Continue reading "Multi-Billion Dollar Bank Settlement Won't Stop Miami Foreclosure Fraud" »

As the years have gone by, Miami foreclosure defense lawyers and attorneys throughout the nation have been able to show judges that the tactics used by banks and their associates to take away people's homes -- whether underwater on the mortgage or not -- are immoral and don't justify a foreclosure.

Now, authorities are finally beginning to come around to the fact that the actions of these banks may also be criminal. A grand jury in Missouri recently indicted a foreclosure service company of forgery, The New York Times reports.

The number of Miami foreclosures haven't dropped significantly, and analysts believe there may be a new wave of cases from homeowners who have been trying to get by, but who are teetering perilously close to losing their homes. For many of these people, they owe more than what their homes are worth, forcing them to let the house go into foreclosure as a form of strategic default.

In Missouri, DocX, one of the largest companies that worked on foreclosures on behalf of lenders nationwide was indicted by a grand jury on charges of forgery, which is now one of the few cases where prosecutors have brought criminal actions against companies and officials involved in foreclosures. Late last year, Las Vegas officials charged two people running a mortgage servicer company in connection with alleged robo-signing activities.

The Missouri indictment alleges 136 counts of forgery in preparing documents that were used to evict borrowers who were behind on payments from their homes. The company's founder and former president faces the same charges as the company.

The business, whose parent company is based in Jacksonville, notarized and executed millions of mortgage documents for big banks and loan servicers in recent years. The newspaper reports the company was closed in April 2010, after it was discovered that robo-signing was common practice.

The company faces a $10,000 fine for each of the counts under which it is convicted. The former official faces up to seven years in prison per count.

The newspaper reports, as our Miami foreclosure defense lawyers have said in the past, that few criminal actions have been taken so far based off these major problems. While states have brought civil lawsuits mainly against companies involved in the foreclosure process, it has been rare for people to actually face criminal charges for creating false documents and authorizing paperwork that was falsely notarized.

Our Miami foreclosure lawyers believe that many criminal acts have taken place in this industry and they must come to light in order for the responsible parties to be held accountable. Bank officials ordered unlawful activity, and yet they've been able to come out of this economic meltdown free from trouble.

Workers in mortgage servicer companies and other businesses contracted by lenders skirted laws and deceived the public through their activities. Yet few have faced the possibility of going to jail or prison. When everyday citizens commit a crime, they are arrested. Yet, obvious crimes were committed in the handling of tens of thousands of Miami foreclosures and little has been done. Justice must be served in order to protect homeowners from officials willing to put profits ahead of the law.

Continue reading "Criminal Charges Pending Against Company That Worked On Miami Foreclosures" »

For the better part of a year, the Obama administration has pushed state attorneys general to agree to a $25 billion settlement with banks, though it would do little to help homeowners stuck in Miami foreclosures, those with underwater mortgages or those that see strategic default as their only option.

This settlement will squeeze cash from the country's biggest banks, but that doesn't mean it's going to trickle down to homeowners who really need it. The states and feds will take their share for their "work" on the case and then chunks of it will probably go into funds that the government can make interest from and eventually, some homeowners who have had their rights violated could end up with some money that probably won't right the wrongs.

Miami foreclosure lawyers have been following this issue because it could be a major event in the foreclosure process for many Americans. If the attorneys settle, they will lose the ability to sue on many fronts, even if they later discover major violations that banks committed in their state.

A settlement also means that government agencies and their vast resources will be crippled in their quest to investigate these acts, which will make discovering what really happened more difficult. While the state and federal governments can subpoena information much easier, an individual homeowner would have to file a lawsuit, jump through legal hurdles and then spend the money to investigate their own case. The amount of information they could get would likely be very narrow.

The overarching concern here is that while banks are going to combine to dish out $25 billion, is it really going to help homeowners? Or, is it going to become a pawn in the political races that doesn't actually provide anything for people who need the help the most.

About one in five mortgages are now under water, meaning the homeowner is paying out more for the house than it is actually worth. Many people in Miami are in this situation and it is very frustrating. For people who have job opportunities elsewhere, they may have to turn those down. Other people who had hoped to use their house to bring in a profit and use it as an investment no longer can hold out hope of that.

According to The Huffington Post, the banks would pledge a certain amount of money that is supposed to go to homeowners. But the banks would get credit for helping borrowers who owe less than 175 percent of the value of their houses. The newspaper quoted sources that said the Obama administration is giving states a hard deadline to sign the deal.

What the article doesn't state is exactly what this "pledge" to help homeowners really means. It also doesn't state what homeowners would actually get out of the settlement. If residents feel they were the victim of illegal foreclosures, they could take their case to a committee that would require the bank to fix problems and banks would be immune from civil penalties up to 1 percent of the loan. Essentially, it sounds as if the banks would have little financial liability. The foreclosure could still go through, the homeowner kicked to the curb.

This settlement is a mess and it will be interesting to see if anything good actually comes of it. What is more likely is banks will still make profits and homeowners facing Miami foreclosures will still be victimized without the assistance of an experienced foreclosure defense attorney.

Continue reading "Big Bank Settlement Might Not Help Those in Miami Foreclosures" »

As we have come to learn, banks have attempted to take away people's homes, even when they had no legal right. They robo-signed documents and created paperwork to try to show that they had legal standing to take a person's house away.

But judges nationwide have been persuaded by Miami foreclosure lawyers and others throughout the state and country to not award a home in foreclosure to the bank without proper documentation. Because bundles of home mortgages are bought and sold on Wall Street constantly, the banks have to be able to prove that they own a person's Miami foreclosure.

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A recent The Rachel Maddow Show on MSNBC.com addressed this issue. New York Attorney General Eric Schneidermann -- one of the chief opponents of a large-scale settlement between states and banks -- has been tapped as the head of a new Obama administration committee through the U.S. Attorney General to look at Miami foreclosures as criminal acts.

Schneiderman called the crashing of the country's economy a "man-made disaster" and the committee now has the authority to look into bank acts and "figure out exactly what happened and hold anyone who was responsible accountable."

He said that many of the bundled mortgages were deposited into New York and Delaware trusts, which is why attorneys general there have been at the forefront of the prosecution of bank officials.

The new task force now has federal jurisdiction and resources, which gives officials more time and money to look closely at bank actions and violations of law. Statutes of limitations and laws are different for the federal government than for certain states, which also gives this panel more power.

Our Miami foreclosure lawyers would only question why it has taken so long for an action like this to take place. The nation's economy has been trending downward for years, and the government's initial foreclosure solution plans obviously didn't work. So, why did we have to wait until 2012 to put together a group of people who want to look into the crimes that banks committed?

Lawyers nationwide are thankful at least that it has finally happened. Owners of Miami foreclosures should take comfort in the fact that finally there is a dedicated group that plans on holding bank officials criminally accountable for their actions. Unfortunately, as news reports have indicated, banks are willing to stoop as low as shredding documents and altering paperwork to get away with what they've done, so it will be interesting to see how much information these investigators are able to find.

Meanwhile, Miami foreclosure lawyers will continue doing the same thing -- bombarding banks for documents and fighting back on behalf of homeowners, who are being forced to act as squatters in their own homes. Negotiating from a position of strength is critical to showing these banks that the homeowner won't back down and let their family's home be snatched away based on unlawful actions and violated rights.

Continue reading "Some Officials Are Trying to Show That Miami Foreclosures Are Criminal" »

Our Miami foreclosure lawyers have been reporting on the newest issue to hound banks involved in foreclosures on underwater mortgages -- force-placed insurance.

On theMiami Foreclosure Lawyer Blog, we have written about how New York authorities have begun looking into whether banks owned or were connected to insurance companies they paid to write policies for distressed homeowners.

Now, American Banker suggests the force-placed issue may be going beyond just banks and into auto insurance and post-foreclosure insurance issues. Our lawyers believe that this issue is just another indicator of the problems that bank officials have created with their greed. Whether it be offering sub-prime loans to minority borrowers or using robo-signed documents in support of Miami foreclosures, banks have shown their lack of concern for following the law and upholding lenders' rights.

With subpoenas being sent out, now American Banker believes that the New York investigation is broader than just mortgage-based companies. A list of companies subpoenaed by the government include mortgage servicers, insurers and insurance agents.

But the list indicates that bank subsidiaries that handle auto insurance and REO insurance were also on the list of subpoenas. REO insurance is used for foreclosed homes and billed to mortgage bond investors.

Some officials estimate that insurance companies receive billions each year from these forms of insurance and that banks get commissions on the policies they write. So, this brings up the question about whether banks that have ties to, or even own, these insurance companies were forcing insurance when they shouldn't have been doing so.

Force-placed insurance is typically used when distressed homeowners fail to keep coverage on their homes and is designed to be protection for investors. The mortgage servicer will buy coverage for them.

Critics believe that while force-placed insurance alone isn't controversial, the allegation that banks are demanding that insurers share their premium revenues since this form of insurance is as much as 10 times as expensive as normal forms of insurance because of the higher risk.

The bottom line for homeowners caught in Miami foreclosures is that it's possible they were forced into this insurance and a greater portion of their monthly mortgage payment could be going to this more expensive insurance, which is cutting down on their equity. And if it can be proven that the bank and servicer had ties to the insurance company providing the insurance, it may be possible to show that a homeowners' rights have been violated.

This is another area where banks are using their weight to try to maximize profits while throwing the homeowner under the bus. Whether it was long-standing robo-signing practices where documents were being signed by people who had no authority to do so or banks were doctoring paperwork in support of foreclosures, these bankers have shown that the law, ethics and other considerations won't get in the way of them making money and following the company rules.

But these violations can support a homeowner keeping their home if it's in the middle of a foreclosure. Homeowners have rights and consumer protection laws are designed to ensure companies aren't allowed to mistreat people.

Continue reading "Force-Placed Insurance May Not Just Affect Banks Involved in Miami Foreclosures" »

Foreclosures have caused people to consider strategic default, short sales and other less-than-ideal situations to cure their underwater mortgage.

Now, it appears cities and counties are considering suing the banks that created the problem in the first place. At least that's one option the city of Detroit is considering, according to The Michigan Citizen.

Our Miami foreclosure defense lawyers believe that the problem with foreclosure in Miami and elsewhere has been exacerbated by the unlawful activities of banks. Many foreclosures could have been prevented had bank officials not used robo-signing practices and created false documents to support foreclosures.

Had they actually worked with homeowners in using government-backed programs, rather than try to unlawfully take away people's homes, communities might be in a different position than they are today. Many Florida communities, which base their budgets on property taxes, have seen those values fall drastically.

According to the news article, Michigan officials are considering imposing an emergency manager to combat its mounting budget deficit. But some believe that suing the banks based on fraudulent lending practices could be an option.

This goes to the issue of the settlement that the majority of state attorneys general are working on with banks. Michigan is one of the states currently negotiating with banks to come to a settlement, which would preclude legal action. It's unclear whether individual cities and counties would still be able to sue if the state is part of the settlement.

According to the news article, this wouldn't be the first time a city sues the banks. Others have seen the unlawful activities of banks and how that has affected their communities. Some have tried to show that the reason communities have been devastated with budget deficits is because of the bank-led home foreclosures and the unlawful practices used to accomplish them.

A recent court decision as well as a Federal Reserve Board review may actually favor communities attempting to bring these lawsuits. Evidence has been mounting for years that shows bank fraud and abuse has led to a major hit to community tax bases.

Baltimore and Cleveland have both sued banks. Baltimore officials claimed that Wells Fargo officials pushed high-interest mortgages on black residents. Cleveland officials sued 21 banking institutions hoping to recover millions of lost taxes from properties that have taken a hit in value after thousands of vacant homes have been demolished.

News has continued to pour out suggesting that bank officials were given bonuses and incentives to push high-interest sub-prime loans onto, in particular, minority borrowers. For bank officials, the higher interest loans looked better for investors. For lenders, these loans have caused them undue financial hardship at a time when they needed it least.

Some analysts believe that the Federal Reserve Board rulings as well as guidance from the Department of Justice may be able to help cities and counties take steps to sue the banks for their misdeeds.

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