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October 27, 2014

Sen. Elizabeth Warren: Government Protected Wall Street, Not Families

Democratic Senator Elizabeth Warren has been one of the very few voices in Washington that has consistently spoken out about systematic governmental failures in protecting average Americans. A Harvard professor and author, Warren ran the Congressional Oversight Panel, which supervised the bank bailout spending and helped launch the Consumer Financial Protection Bureau.
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In a recent interview with Salon.com writer Thomas Frank, Warren expounded on the failures of the Obama Administration and resulting protection of the Wall Street elite, at the expense of ordinary Americans who were losing their homes and their jobs throughout the Great Recession.

In the interview and her recent book, "A Fighting Chance," she discusses how huge financial institutions spent more than a million dollars each day on lobbyists in the 12 months preceding the financial reform debates. Meanwhile, there are almost no advocates arguing for the rights of minimum wage and medium-wage workers.

Continue reading "Sen. Elizabeth Warren: Government Protected Wall Street, Not Families" »

December 20, 2013

Home Equity Loans Could Make for the Next Foreclosure Mess

During the housing bubble, many homeowners took out home equity lines of credit to tap into the equity in their homes. Now, an increasing number of those home equity loans have been outstanding for 10 years, which means that borrowers are required to start paying back principal while before they were just able to pay the interest on the loans. Many homeowners are having a hard time making the higher payments, which means that their homes are potentially at risk of being foreclosed on. bricks-and-money-4-208866-m.jpg

For those facing this problem with the home equity loan coming due, they are not alone. MSN has indicated that the trend of missed payments could actually lead to another foreclosure crisis and more trouble for the big banks in the United States. Miami foreclosure lawyers can help those who are getting caught up in the home equity loan mess to hopefully avoid losing their homes even if their home equity payments rise.

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October 12, 2013

Bankruptcy Judge Scolds Bank of America for Collections Policy

A federal bankruptcy judge has ordered banking giant Bank of America to pay $10,000 for every month it continues to hound a couple whose mortgage loan was discharged in bankruptcy.
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Our Miami foreclosure lawyers know that bankruptcy law is quite clear on what it expects of creditors in the wake of a bankruptcy filing, and that includes immediate orders to cease and desist collections efforts.

The fact that Bank of America failed to do this, according to U.S. Bankruptcy Court Judge Robert Drain in New York, was not some "stupid mistake." Rather, he said, it's obvious that these collections actions were a matter of policy at the company - a policy that violates federal bankruptcy law.

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July 19, 2013

Report: Bank Sued Credit Card Users in Suits Riddled With Errors

As federal regulators are gearing up to issue sanctions against J.P. Morgan Chase & Co. for a litany of mistakes the financial giant made while collecting old debts, an internal review by the firm has proven what has already been alleged.
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Our Miami consumer rights lawyers understand that the bank analyzed some 1,000 lawsuits filed against credit card debtors. Of those, about 9 percent were found to have significant errors.

Those mistakes reportedly ranged from wrongly-applied fees and interest to some cases in which the listed balances were higher than what was actually owed, according to The Wall Street Journal.

Of course, the bank has tried to downplay these errors as "minimal impact" and "mostly small." That may be true from the perspective of a multibillion dollar corporation. But as any individual who has had to go toe-to-toe with the bank in court will tell you, it's typically no small matter. You figure in not only the debt at the core of the dispute, but also the costs incurred for legal fees and time spent on the case, it all adds up very quickly.

These abuses eerily reflect the problems associated with the robo-signing scandal that plagued the housing market. It would never have to light, either, if former Chase Vice President-turned-whistle-blower Linda Almonte would never have stepped forward. She was fired for shedding light on these problems, and has since filed a civil lawsuit against the company.

Today, 13 states and the Office of the Comptroller of the Currency are investigating the bank. Some have outright accused chase of unlawful and fraudulent methods. California has even filed a lawsuit against the bank alleging problems with some 100,000 credit card debt collection lawsuits in that state alone.

The agency halted its credit card debt collection lawsuits back in 2011 after the allegations first emerged.

So why was Chase so sloppy in the first place? Because it is easier to sell debt to a second-hand collector if a court judgment for payment has already been obtained. That meant that Chase was willing to go to extraordinary lengths - perhaps even break the law - in order to get those judgments. The vast majority of these people never fought back in these cases, so many may not realize that the lawsuit against them was full of mistakes. In fact, we believe Chase was counting on that. And you can bet Chase likely wasn't the only one, though it's the only firm that has so far been caught.

We would also venture a guess that the 9 percent error rate determined by the bank is likely a severe understatement. The problems are likely much more widespread.

Consider the results of Chase's mistakes regarding foreclosure case errors. The consulting firm hired by the bank had analyzed more than 60,000 foreclosure lawsuits. Of those, the consultant estimated about 1 percent were flawed, affected by the robo-signing scandal. However, independent reviews revealed error rates that were much higher, at between 9 and 11 percent.

Continue reading "Report: Bank Sued Credit Card Users in Suits Riddled With Errors" »

July 17, 2013

Paying Off Miami Credit Card Debt After Bankruptcy Discharge

When literary giant Mark Twain went broke and had to file for bankruptcy, he reportedly vowed to pay it all back just as soon as he could.
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Today, there is nothing to stop you from repaying your old credit card debts once they have been discharged by bankruptcy. However, our Miami consumer rights lawyers want to make sure you understand that there is usually little to be gained. That includes peace of mind.

While there may be some feelings of guilt associated with a bankruptcy filing stemming from out-of-control credit card debt, this mindset should be reconsidered.

First of all, many credit card companies set countless traps to make it very difficult for you to emerge debt-free. Hidden fees, surprise interest rate hikes and other tactics all contribute to consumer indebtedness. It's very easy for someone who encounters a rough patch to become quickly overcome with credit card debt.

The second thing is, bankruptcy is not a moral failure. It's often the most prudent financial decision you can make in order to secure the long-term stability of you and your family. It's smart, not shameful.

Still, some people may feel strongly that they should one day repay this money. Unless you somehow find yourself ridiculously wealthy, here's why such a move would be unwise:


  • You don't have to pay it. That is, if you have filed for a Chapter 7 bankruptcy, that debt is gone. In fact, any creditor who so much as tries to send you a "friendly reminder" about that old debt after it's been discharged can be sued for damages. The court does not take kindly to creditors who disobey strict no contact orders.

  • It's not going to help your credit. Sure, the creditor may be happy to take your money, but it won't make one bit of difference toward boosting your credit score. That's because a successful Chapter 7 bankruptcy discharge will result in an order to creditors not to report ANY future account activity on those accounts to credit reporting agencies.Your good deeds will go unrewarded.

  • You're actually hurting your own chances of recovery. Think about it: The whole reason you file for bankruptcy in the first place is because you couldn't stay afloat. One of the best ways you can prevent this from happening again is to save up a healthy emergency fund. This can cushion the blow for future unexpected expenses. If you turn around and give that money to the credit card company, it only hurts you and may put you in a similarly precarious situation.

  • The agency you owed originally doesn't even own that debt anymore. More than likely, it was sold after the account went past 180 days overdue.

  • You probably still have other debts pending. A Chapter 7 bankruptcy is a life raft. It will save you from a financial drowning. It won't always leave you completely debt-free. The laws became stricter back in 2005, and there are some debts you can't discharge. Those include child support and alimony payments, student loan debts and certain tax debts. This is where you should direct your focus. That, and then efforts to boost your savings and improve your overall financial health.

Continue reading "Paying Off Miami Credit Card Debt After Bankruptcy Discharge" »

February 15, 2013

Feds: Credit Reporting Errors Common, Costly

Your credit report is often the make-it-or-break-it element of your financial future. In most cases, it is the foundation upon which creditors decide whether to sell you a car or a house or give you a job. It may even be the basis upon which you are given certain security clearances. booksandpages.jpg

However, as our Miami foreclosure lawyers have recently learned, an eight-year study by the Federal Trade Commission indicates that as many as 40 million Americans may be victims of errors. About half of those are considered significant.

You may think an honest mistake might be easy to rectify. You would be wrong. Not only that, these errors can cost you dearly.

Just like banking, credit reporting is a big business. The industry generates upwards of $4 billion annually, with three companies dominating: TransUnion, Equifax and Experian. These firms keep track of some 200 million Americans. These entities gather information on us and those with whom we do business, and then make money - a lot of it - selling that information. Buyers include not only banks but insurance companies, merchants and employers.

So these scores have a significant ripple effect on nearly every aspect of our lives. And yet, they have an error rate of 20 percent. An estimated one out of every 10 Americans is walking around with an error on their report that has served to damage their overall creditworthiness.

Of course, amid years of criticism, these firms have deflected the blame for any errors onto either merchants or banks, saying they had been given bad information.

But the attorney general's office in Ohio, which launched its own investigation into widespread reports of error, says the bulk of the blame lies with the credit agencies themselves, which often may be guilty of violations of the Credit Reporting Act.

Specifically, the federal law is clear in that if consumers believe there is a mistake, that claim should be promptly and thoroughly investigated by the agency. That isn't happening. Not only are these firms not conducting a "reasonable" investigation, per the federal law, they reportedly aren't conducting any investigation whatsoever, the state attorney general's office contends.

So the real problem is not even so much that there are errors, it's that they refuse to fix them.

It's estimated that some 8 million people file disputes with regard to their credit reports. However, most of those complaints are diverted to call centers in India, and even then, most are referred back to the reporting firm's website - which aren't specially equipped to handle complaints.

There is also an avenue to file complaints by mail, but the FTC learned most of those go absolutely nowhere.

Those that do get the problem fixed end up with cases that have dragged on for years - even in cases that involved a clear mistaken identity (something one would think would be a simple issue to solve).

There have even been multiple federal court cases in which individuals have won million-dollar judgments against these firms for clearly violating the law. However, it's easier for these firms to simply pay-out the settlements that actually make it that far than to go through and clean up their policies and procedures to make them compliant the law.

The fact is, bankruptcy and foreclosure often go hand in hand. Faulty credit reporting can be an incredibly difficult thing to shake. We can help.

Continue reading "Feds: Credit Reporting Errors Common, Costly" »

February 13, 2013

Florida Supreme Court Sides With Banks That File Fraudulent Foreclosure Documents

The case of Pino v. Bank of New York, reached a disappointing conclusion earlier this month, when the Florida Supreme Court ruled that a bank should not be punished or held liable when it files fraudulent or flawed documentation in a foreclosure case, and then hurries to voluntarily dismiss it without prejudice. computerfrustration.jpg

Our Miami foreclosure lawyers of course aren't surprised that yet again, banks have prevailed, but it paints a picture for potential clients of what you are up against in these cases.

It's almost as if banks have gotten away with it by virtue of the fact that it happened so often. The question posed was not whether the court has the ability to sanction parties in a civil proceeding for filing fraudulent documents, but whether in such cases the court should have the ability to re-open the case, reverse a voluntary dismissal without prejudice and subsequently issue a dismissal with prejudice - as a sanction to the original party for having committed the fraud.

The court ruled that such action is not within the authority of the court.

Here's what happened: Roman Pinto was a Florida resident who was sued for foreclosure back in 2010 for defaulting on his mortgage. However, when Pinto's foreclosure defense attorney sought to challenge the validity of ownership documents filed by the bank (that is, to allege they were in fact fraudulent, as so many documents are in these cases), the bank suddenly moved to voluntarily dismiss the case without prejudice.

The judge in the case agreed - which mean the bank could subsequently re-file the case, sans fraudulent documents, with no penalties or sanctions at all for having done so in the first place.

Subsequently, Pino appealed his case to the Fourth District Court of Appeal, asserting that the court should put the original voluntarily dismissal aside - as it was requested solely because the bank knew it had been caught submitting false and fraudulent documents - and enter a new dismissal that would render the bank unable to take further action.

However, the Fourth District Court of Appeal held that a trial court did not have this authority in a case where the plaintiff (in this case the bank) had not yet had the opportunity to obtain any affirmative relief from the defendant (in this case the homeowner) prior to the case being dismissed.

Still, the appellate court requested that the state Supreme Court answer the question directly, as it was applicable to numerous cases throughout the state as an issue "of great public importance."

The Florida Supreme Court certified the question in the negative. The justices reasoned that had the plaintiff actually obtained some form of affirmative relief from the defendant based on fraudulent conduct, then there would be an adverse impact on the defendant, who could then clearly be entitled to seek relief pursuant to Florida Rule of Civil Procedure 1.540(b)(3). But absent that, the court decided, a dismissal with prejudice would be improper.

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October 29, 2012

Feds: BofA Was "Hustling" the Mortgage Industry

The federal government has filed a $1 billion civil lawsuit against Bank of America and its subsidiaries, claiming the company intended to remove specific quality controls with regard to loan origination - which played a huge part in the meltdown of the housing market. dollarsign1.jpg

Miami foreclosure attorneys know it's no secret that lenders and banks were central to the creation and subsequent implosion of the housing bubble. What the filing in U.S. v. Bank of America, U.S. District Court, Southern District of New York, shows is some insight into just how elaborate and planned these schemes were.

Specifically, federal prosecutors are targeting the actions and processes of subsidiary Countrywide. Acting as a mortgage lender, the suit says the company put in place a loan orgination process that company insiders called "The Hustle." According to the government, it started in 2007. The primary - and deliberate - goal was to remove the quality controls, or checks and balances, that stood in the way of the company churning out as many mortgages as possible. In order to accomplish this, Countrywide launched a program called Full Spectrum Lending.

The problem with this, of course as we now know, is that this process meant people who could never have actually afforded these loans were approved. But it wasn't just the average Joe the banks were scamming. The government had been there to ensure those loans, as they had done for decades following the Great Depression. The government contends it was not aware that the loans, which had been approved according to what were supposed to be stringent measures, were actually high-risk liabilities. When the bottom fell out of the market, the federal housing agency was stuck holding a large portion of that tab.

Although the specific "hustle" scheme was started by Countrywide, which was independent in 2007, the Department of Justice claims that Bank of America, which acquired the company in 2009, continued the process, despite warnings by one top executive that it wouldn't end well.

In fact, the former executive vice president of Countrywide, also a senior manager of the Countrywide division that kickstarted the "hustle" program, blew the whistle on the practice, saying he had pleaded with his fellow executives to drop the program. In fact, he was actually party to the original qui tam complaint (which means he filed it against his former employer, in conjunction with the government, and will now be in line for millions as a whistleblower).

At one time, Countrywide was the largest mortgage lender in the country, cranking out some $490 billion in mortgage loans in 2005. Subprime loans specifically were originated out of its Full Spectrum Lending division. The "hustle" was a number of steps taken to reduce processing time as well as underwriting oversight of conventional loans. They called these controls "toll gates," viewed as obstacles to overcome. To help overcome this, the company eliminated checklists that had previously been mandatory and did away with all of its compliance specialists, who previously had been the ones who conducted quality control on each individual loan to make sure it met the proper criteria.

All of this begins to paint a picture of a very deliberate plot to defraud both taxpayers and consumers.

The government alleges the company specifically has violated the recently revamped federal False Claims Act.

Continue reading "Feds: BofA Was "Hustling" the Mortgage Industry" »

October 1, 2012

South Florida Homeowners Beware: Banks Now Faking Debt Forgiveness

Having caused the implosion of the real estate market and the worst recessions since the Great Depression, banks have done everything possible -- by legal means and by those illegal -- to avoid working with homeowners. Especially if it meant debt forgiveness.

And why not? It's not as if the government has held them criminally responsible for anything. As our Miami foreclosure defense attorneys continue to report, underwater homeowners in South Florida need to get proactive in seeking the advice of experienced legal counsel. 455596_software_development_centre.jpg

Now it appears, having agreed to a $25 billion settlement with the federal government that induces them to work with troubled borrowers, banks have been forgiving debt in droves.

It's just that the debts do not exist.

The New York Times is reporting consumers across the nation are getting letters from some of the nation's largest banks -- forgiving debt they don't owe.

In Connecticut, $64,000 that a homeowner had eliminated through a bankruptcy filing three years ago. Here in Florida, $190,000 that a resident no longer owed. In Virginia, Bank of America wiped out a $231,000 home equity loan a consumer had discharged last May.

Banks very well may be attempting to satisfy the terms of their agreement with the government by eliminating debts they have no legal right to collect in the first place. A bankruptcy attorney reported several of his clients have received such letters.

Aside from the in-your-face taunting of the government by banks many thought got a sweetheart settlement deal to begin with, consumer advocates point to the possible tax nightmare that could result. The Internal Revenue Service considers forgiven debt income -- the exception is when such debt is discharged through bankruptcy. By claiming to forgive debt a consumer has discharged, banks could be setting struggling consumers up for undue consequences.

The letters even warn the information will be reported to the IRS -- borrowers will have to prove the banks erred in claiming to have forgiven the debt.

This is just another example of bank action putting consumers at peril -- months or even years after they thought a matter had been settled. Please don't attempt to deal with these companies on your own -- consulting experienced legal counsel will be well worth the cost and the peace of mind.

For their part, banks contend the letters were meant to notify borrowers of the release of liens in connection with the forgiveness of debt through bankruptcy. Bank of America estimates it sent out 12,000 of the letters. Perhaps we shouldn't blame consumers if they are confused -- since nowhere in the letter does it discuss liens.

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September 15, 2012

Study: Banks Pushed Hundreds of Thousands to Unnecessary Foreclosure

Nearly 1 million people were unnecessarily herded through the foreclosure process in the wake of the housing crisis. shadow.jpg

That's according to a new study by the Federal Reserve Bank of Chicago, in concert with other researchers, who determined that bank delays, disorganization and inefficiency caused many families to lose their homes.

Miami foreclosure lawyers know that when the dust began to settle on the burst of the housing bubble, federal regulators were quick to grandstand about getting banks to participate in loan modifications.

The idea was simple: correct your mistakes. Those homeowners only owned homes that were worth more than they owed because the banks had sold them a raw deal. By offering a principal reduction, people could have a chance at a mortgage they could afford - which meant they could remain in their homes.

That was the whole idea of the Home Affordable Modification Program (or HAMP), which was passed by the federal government in 2009.

But here's the truth: It didn't work.

The recent study essentially looked at how many more people might have qualified for loan modifications under HAMP had the program actually worked as intended. This is where they reached the number: 800,000.

That's 800,000 homes lost. 800,000 families.

There was a disparity, the study found, among banks. In unsurprising results, the researchers determined that those banks that had more staff who were better-trained at facilitating mortgage loan modifications had more successful loan modifications. The problem, however, was that the majority of banks did not have enough properly trained staff dedicated to handling the problem.

Here's the bottom line: They did not make it a priority.

Even after the market imploded, they did not make cleaning up their mess a priority. It was the homeowners who were left to pay the price.

Our Miami foreclosure attorneys see this type of attitude every day from those who are employed by these huge financial institutions. There is a lack of accountability that can be astonishing. For our clients, who have never before endured such a process, it can be overwhelming. But that's where we come in. We do understand how these "machines" operate. We understand the laws inside and out, and we fight aggressively to save our clients from foreclosure.

We do know that by the end of this year, HAMP will have facilitated about 1.2 million loan modifications. But the banks were working more efficiently, that number would look more like 2 million.

That's still far short of the 3 to 4 million promised by President Barack Obama when he announced the program three years ago.

The study doesn't specifically point fingers at the banks that were mostly to blame, but it isn't difficult to figure out, considering that a few of the larger mortgage servicers reported completing half the modifications of others.

One of the slowest, Bank of America, was also one of the biggest. This is even more infuriating when you understand that the federal government actually paid these banks to embrace modifications. In other words, taxpayers gave money to the banks that had caused our fiscal crisis in an effort to compel them to fix it.

Think of it this way: Would you pay a bank robber to return the money he stole? Would you pay a burglar to give you back your possessions?

What if he took that money, and then still didn't return everything he'd heisted? That's what's happening here.

This is the kind of backward thinking you are up against.

Let us help you negotiate from strength.

Continue reading "Study: Banks Pushed Hundreds of Thousands to Unnecessary Foreclosure " »

February 14, 2012

Miami Foreclosures Not Slowed by Federal HAMP Extension

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.

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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" »

February 12, 2012

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

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.

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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" »

February 3, 2012

Force-Placed Insurance May Not Just Affect Banks Involved in Miami Foreclosures

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.
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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" »

February 1, 2012

Should Cities Be Suing Banks Because of 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.
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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.

Continue reading "Should Cities Be Suing Banks Because of Miami Foreclosures?" »

November 18, 2011

Foreclosures in Miami, Nationwide Could Take Decades To Work Through

USA Today predicts that it could take the country several decades to clear out the backlog of foreclosure cases that have plagued our real estate market nationwide.

Miami foreclosure defense attorneys reported in October that there is also a "shadow" market of homes that are either still in some form of foreclosure or have already gone through foreclosure but are being held off the market by banks that now own them. The official number of homes for sale nationwide is 3.5 million, but adding in the shadow market, the number may jump to 7.5 million.
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Experts believe that it will be a long time before housing prices return to the levels that much of the country saw in 2005 and 2006, especially given the large inventory of homes that are available for purchase.

What this means for those fighting their foreclosure in Miami is that they are among many, many Americans who are sitting in the same boat.

One reason for the delay in these cases were the banks themselves. Initially, they filed millions of foreclosures in order to try to take homes where people may have missed one or two payments, rather than attempt to work with them. The problem was they were so unprepared to handle that many cases.

So, they started hiring companies to sign the documents that should have been signed by a bank official who had reviewed the case. Instead, an unqualified person at a different company would sign and notarize documents that they couldn't say were 100 percent accurate. This practice, known as robo-signing, was rampant and has still been documented to this day.

Most banks took about a year off from filing foreclosures as they reviewed cases and attempted to streamline their procedures. But they did nothing to address the issues of the past, such as homeowners who lost their houses because improper documents were signed and incorrect numbers were used in support of a foreclosure.

In other cases, banks couldn't even prove who owned the mortgage, as they are typically sold in bundles to investors. Without knowing who is foreclosing, a foreclosure shouldn't be granted.

According to the USA Today article, the backlog of cases suggests that in some markets, the recovery time will be longer than in others. In New York and New Jersey, new court rules may make lenders take 50 years at the current pace to clear out the backlog. In Florida, the prediction is about eight years.

In states where there is no judicial review, the process is moving much quicker. Many states expect to clear out their backlog of cases in only two to four years. But even many small states, such as Connecticut, Vermont, Maine and North Dakota may be struggling for a decade or more to move cases out of their systems.

For the real estate market to recover, it is certainly good that Florida's predicted time schedule is slightly lower than that of other states. But Miami foreclosure defense lawyers hope that courts don't weigh the challenge of moving these quicker more heavily than ensuring homeowners' rights are upheld.

Continue reading "Foreclosures in Miami, Nationwide Could Take Decades To Work Through" »