Miami Foreclosure Lawyer Blog

Miami and South Florida homeowners fighting foreclosure or upside down on their mortgage may have a way out. Judges around the Country are holding banks trying to foreclose to their burden. TILA, HOEPA, RESPA are words Banks don't want to hear. Many judges have lost patience with lenders. The days of a quick foreclosure sale and whopping deficiency judgment have changed some. A strong defense to foreclosure can make the difference in avoiding financial ruin. You need qualified counsel with prior bank experience to fight for you. Barakat, Jacobs & Associates are trial lawyers who negotiate from strength.

The law in Miami, Coral Gables, Kendall and Pinecrest is the same throughout South Florida and NY - The bank has to prove they own the note to foreclose. In October of 2009, New York Bankruptcy Judge Robert D. Drain held PHH Mortgage failed to meet its burden to foreclose on a home in White Plains, and wiped out the $461,263 mortgage debt on the property. The pen is mightier than the mortgage, especially when applied to a court order. The reason for the result: if the lender can't prove ownership of the promissory note, borrowers have leverage, and "may even be able to stay in their homes mortgage-free."

Securitization is the reason notes have gone missing since the housing boom. Large pools of bank loans were bundled and sold to scores of investors. However, no one was watching the henhouse and the notes, were never adequately tracked or recorded. In some cases, that means nobody truly knows who owns what.

According to a transcript of the Sept. 29 hearing in the White Plains case, The Bank's counsel said: "In the secondary market, there are many cases where assignment of mortgages, assignment of notes, don't happen at the time they should. It was standard operating procedure for many years." Judge Drain rejected that argument, and ruled he had "more than 50 percent doubt that if the debtor paid this claim, it would be paying the wrong person."
Fair Game - If the Lender Can't Find the Mortgage - NYTimes.com.pdf

At 13%, Miami Gardens has the second highest foreclosure rate in Florida, a state with 23% of homeowners either in foreclosure or delinquent on their mortgage. Time Magazine just ran a story on how Miami Gardens City Councilman Andre Williams is taking the Banks to task. Banks targeted borrowers in Miami Gardens with subprime, often predatory loans, knowing their clients could not afford their mortgage payments.

Councilman Williams is demanding lenders do more to help South Florida homeowners avoid foreclosure. If a lender has a branch in Miami Gardens, the new legislation punishes banks that start foreclosure proceedings without offering a loan modification.

There is no jurisdiction for local government to run oversight on banks. Councilman Williams' ordinance would test whether a lender filed more foreclosure actions in Miami Gardens that loan modifications offers over a period of time. If so, Miami Gardens would pull its accounts or other business from that bank.

To date, Banks have modified only 9% of over 3 million mortgagees at risk of foreclosure. The relief can come in the form of interest rate or principal balance reductions. President Obama's Making Home Affordable Program made $75 billion available to 38 major home lenders in the US for that purpose.

Councilman Williams is running for U.S. Congress. The Miami Herald editorial said that Banks should help distressed homeowners or Congress should consider changing bankruptcy laws to permit judges to reduce the principal balance of home mortgages. So, if Councilman Williams can't get his law passed in Miami Gardens, perhaps he can wins a seat in Congress and make it happen.

How Miami Gardens May Punish Banks for Foreclosures -- Printout -- TIME.pdf