Miami Foreclosure Lawyer Blog

From Miami to Beverly Hills, the rich are surrendering homes to foreclosure and simply walking away from what they view as a bad investment, the New York Times reported.

As our Miami foreclosure defense lawyers continue to report, South Florida homeowners looking for foreclosure help have a number of options. But weighing the risks and rewards of a home-loan modification, short sale or strategic default is best done with help of an experienced real estate attorney. Banks, and even the government, are attempting to guilt-trip hardworking homeowners into keeping homes worth far less than what is owed. Meanwhile the wealthy, and their lawyers, are simply walking away and living to fight another day.

Whether it's a primary residence, second home or an investment property, the rich have stopped paying mortgages at a far greater pace than the rest of the population. The Times reports that more than 1 in 7 homeowners with loans of a million dollars or more are seriously delinquent. The report suggests that the wealthy are purposefully dumping properties just as they would a bad investment.

As we reported on our Miami Foreclosure Lawyer Blog, strategic defaults (choosing to walk away) and short sales (selling for less than what is owed) present their own risks. If the bank chooses to pursue a deficiency judgment, a homeowner could be left owing the difference between the mortgage balance and what a home sold for at auction. Seeking the advice of an experienced Miami foreclosure attorney is the best option to protect your rights and the long-term financial well-being of you and your family.

Continue reading "Wealthy homeowners in Miami choose foreclosure; consulting an attorney the best option" »

The Miami Herald reports about a thriving private industry that is buying debt from banks and chasing homeowners for mortgage balances owed in the wake of a short sale or foreclosure.

This is another example of why it is critical to consult an experienced Miami foreclosure attorney for those seeking mortgage foreclosure help or for homeowners trying to stop a foreclosure sale in South Florida. Companies are waiting to go after homeowners who close short sales without a waiver of deficiency.

The New York-based Deficiency Judgment Recovery Network is one such company. Formed in late 2009, the company reports it is attempting to collect from "hundreds, maybe thousands" of Florida homeowners who though completing a short sale would put their housing nightmare behind them. The company is either hired by lenders to collect deficiencies or buys the debt for pennies on the dollar. A deficiency is the difference between a homeowner's mortgage balance and what a home brought through short sale or foreclosure.

"People are under the assumption that the banks are so busy modifying home loans that they don't have the bandwidth or stomach to go after those who are walking away. That's a bad assumption," said Joshua Rand, whose company motto is "We turn shortfalls into windfalls."

Before the downturn in the real estate market, such deficiencies were rare. Now, as many as half of homeowners owe more on their property than it's worth in the current market -- particularly in hard-hit states like California, Florida and Arizona.

As one industry watcher put it: "It's going to be a blood bath."

Florida courts handled 398,825 foreclosures last year -- not including short-sales, which account for more than one-third of all real estate transactions in some areas of South Florida. By the end of this year, Realty Trac predicts a total of 3.5 million more foreclosures nationwide.

In Florida, lenders have up to five years to file a deficiency judgment and up to 20 years to collect.

Continue reading "Waiver of deficiency critical for Miami homeowners facing foreclosure or short sale" »

Lenders dealing with foreclosures and short sales in South Florida and across the nation are expected to file a barrage of lawsuits seeking to recoup losses from homeowners, the Miami Herald reported.

An experienced Miami foreclosure defense attorney should assist buyers dealing with a short sale or foreclosure. Without a written agreement from your lender, you are exposing yourself to the possibility of being slapped with a huge judgment for outstanding mortgage debt -- the difference between what your house is worth now, and what you owe on the mortgage. Get an experienced Miami real estate attorney and make sure you protect your financial well-being by seeking a waiver of such deficiency judgments. Otherwise, a short sale may help the bank, but won't help you.

"It will be a dramatic problem because the borrowers will not know it's coming," Frank Alexander, a law professor at Emory University in Atlanta, told the Sun-Sentinel. Florida law gives banks five years from the date of a sale to file a deficiency judgment and up to 20 years to collect. Lenders can garnish wages, make claims against a borrower's assets and use other means of collection.

While such deficiency judgments were rare before the housing meltdown, so were foreclosures and short sales and borrowers frequently had few assets worth chasing in an attempt to collect. But, with the advent of strategic default, banks are finding borrowers often walked away with significant assets and the bill collectors are suiting up for action.

A recent survey found more than 4 in 10 homeowners said they would consider walking away from a property with an underwater mortgage -- meaning more is owed on the home than it is worth in the current real estate market.

Other homeowners at high risk of collection action include those who ransacked or damages properties in foreclosure, either out of spite or for a profit.

Mortgage companies typically won't pursue homeowners who negotiate in good faith, or those who default because of job loss, health problems or other unforeseen circumstances, according to the Herald's report. But don't take the lender's word for it; work with a qualified and experienced attorney to get it in writing.

Even if the mortgage companies don't pursue collection action, they can sell the debt to a collection agency at a steep discount, and the debt collectors will come calling with all of the aggressive and disruptive tactics that they employ.

Continue reading "An experienced Miami foreclosure attorney can help protect against deficiency judgments" »

Skyrocketing foreclosures continue to push people to extremes. Recent cases include the suspect in the attempted bombing of Times Square and an Ohio man who refused to leave his home when the sheriff arrived with an eviction notice.

As South Florida homeowners continue to struggle with foreclosure, underwater mortgages and eviction, hiring an experienced Miami foreclosure defense attorney is the best course of action to protecting your rights and the financial well-being of you and your family. While the New York case is being linked to a possible terrorist attempt, cases of homeowners locking themselves in their homes, and even sheriffs who are refusing to serve foreclosure and eviction notices, continue to surface.

Such cases illustrate the need to be proactive early in the process and to seek the guidance of a qualified Miami real estate lawyer to protect your rights before the situation gets out of control.

The suspect in the attempted bombing of Times Square in New York City was dealing with a foreclosure action, MSNBC reported.

Pakistani-born Faisal Shahzad, 30, and his wife, were facing foreclosure on their Shelton Connecticut home and had abandoned it months ago. The lawn was being mowed on behalf of J.P. Morgan Case & Co., which issued the mortgage when the home was purchased in 2004. Chase Home Financial filed the foreclosure action against the couple last September; court documents indicate neither Shahzad nor his wife showed up to defend themselves. The most recent documents in the case were dated April 23.

Meanwhile, the Miami Herald reports that an Ohio man facing eviction locked himself inside and vowed to stay until a moratorium has been declared on foreclosures.

The man began his crusade on Sunday, along with five members of a group calling themselves the Toledo Foreclosure Defense League. The homeowner said he has attempted to work with the bank and done everything possible to save his home. He said he fell behind on the mortgage last year, after having surgery and losing his job. He said he has lived in the home for 20 years. The sheriff said he'd given the man extra time but had no choice but to evict him.

Continue reading "Extreme foreclosure cases illustrate need for early intervention of a Miami foreclosure defense attorney" »

Homeowners who sign up for the federal government's mortgage assistance program are getting punished by lower credit scores, MSNBC reported.

Seeking alternatives to mortgage foreclosure, including short sales and loan modifications, will not save your credit scores. Contacting a Miami foreclosure defense attorney is the best strategy to resolving an underwater mortgage or other challenges faced by South Florida homeowners.

For struggling homeowners who are making their payments but facing default, seeking help through President Obama's loan modification program can reduce credit scores by as much as 100 points. Such a hit can take a borrower from a credit score of 700 -- which is considered average -- to below the territory considered sub-prime, which can make it tougher to get a loan and result in higher interest rates and other restrictions.

Housing advocates contend it's unfair and homeowners are often surprised and disheartened to learn that attempting to avoid a foreclosure can still result in significant damage to a credit rating. While it can be less damaging -- a foreclosure will remain on your record for years and can shave 150 points off a credit score, which is graded on a scale from 300 to 850 -- there is little practical difference to the immediate damage of a credit score which drops 100 points, versus 150 points.

And for many borrowers, the damage is already done from missed payments as they struggled with an unaffordable or underwater mortgage for months before seeking professional help.

Continue reading "South Florida homeowners face damaged credit from home loan modification programs" »

Homeowners associations are moving to foreclose on properties in an effort to force banks to take possession of condos and pay homeowner's fees, the Miami Herald reported.

Homeowners associations are often much more aggressive than banks in seeking eviction or foreclosure actions against delinquent homeowners. Miami homeowners facing foreclosure can often remain in their homes throughout the foreclosure process as long as they don't run afoul of their homeowner's association. A Miami foreclosure attorney should be consulted in cases where a homeowners association is involved in the foreclosure process.

Homeowners associations in South Florida are resorting to "reverse foreclosures" in an attempt to collect association and maintenance fees. Associations have come under increasing financial strain during the real estate bust as multiple foreclosures leave them with fewer fees and more empty units and properties to maintain.

This latest move by homeowners associations is a result of an increasing number of banks that are delaying the process of taking back a property. By delaying the sale, banks are hoping for a market rebound. In the meantime, a property sits in limbo and the homeowners association doesn't get paid.

Under a reverse foreclosure, the association files its own foreclosure action. It then renounces its claim to the property (an association can't sell anyway because of the bank's lien) and asks a judge to give title to the bank.

Staying current on your homeowners fees is important if you and your family want to remain in your home throughout the foreclosure process, which can take several years.

Continue reading "Miami homeowners facing foreclosure should stay current on dues to homeowners associations" »

Hundreds of thousands of troubled homeowners are at risk of being kicked out of President Obama's foreclosure prevention program, CNN reported.

Struggling South Florida homeowners are faced with many options in dealing with an underwater mortgage, resetting option ARM mortgages or unaffordable mortgage payments, including government and private modification programs, short sales, foreclosure and bankruptcy. An experienced Miami foreclosure lawyer can assist in determining the option that is right for you.

Companies servicing loans through the Home Affordable Modification Program (HAMP) have until Jan. 31 to review trial modification that have been underway for several months. Meanwhile, the Treasury Department said it will issue new guidelines next week but would not give details.

Reviewers must determine whether borrowers have made all the payments during the trial period and completed the necessary paperwork. During trial modification, a homeowner's monthly payments are no more than 31 percent of pre-tax income. Some homeowners have waited seven or eight months to see if they qualify for permanent adjustment to their mortgages.

About 450,000 struggling homeowners are currently enrolled in the program.

Continue reading "South Florida homeowners struggling to remain in government loan modification program " »

Good foreclosure defense lawyers in South Florida are warning clients about deficiency judgments. Whether you live in Ft. Lauderdale, Pinecrest, Miami Beach, Coconut Grove or Coral Gables, homeowners considering a strategic default should be mindful. The real danger in a foreclosure is that Miami Judges are granting deficiency judgments.

When a home is underwater or upside-down, a foreclosure sale price is far less than the loan balance. In Florida, lenders can apply to the Court for a deficiency judgment after a foreclosure up to five years later. The judgment amount is the difference between the loan and the market value of the home on the day it sold at a foreclosure auction.

Judgments are good for 20 years. Judgment holders can force people into court every year to disclose their finances. They can seize bank accounts, assets, garnish wages, even the family dog (its considered property under Florida law). ,

Quietly, many investors are buying up these deficiency judgments at pennies on the dollar. These investors tend to be very aggressive and look to recover a higher rate of return than the larger institution. They are willing to put the effort in," said Jeff Baum, formerly with SunTrust Bank's unit handling residential mortgage-backed securities.

Once a deficiency judgment is awarded, it is often sold to debt collectors. A bank will walk away rather than spend money to collect a debt that will force the borrower into bankruptcy. Many lenders are saying "So, why not sell it for 25 cents on the dollar?"

The best way a homeowner or borrower can protect themselves is hire strong foreclosure defense counsel to negotiate a waiver of the deficiency judgment.

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