Miami Foreclosure Lawyer Blog

South Florida short sales, loan modification and foreclosures are having a devastating impact on consumer credit scores. A Miami foreclosure defense lawyer can not only help stop foreclosure but can advise you on the best options for protecting your credit and the long-term financial future of you and your family. We can help you avoid foreclosure, stop foreclosure sales or assist you with determining whether a short sale or loan modification is right for you.

MSNBC reports that one-fourth of consumer credit scores are 599 or below. Twenty-five percent of consumers -- or more than 43 million people -- now fall below 600. Before the Great Recession, just 15 percent of consumers, or about 25.5 million people, fell below the 600 threshold.

Your FICO credit score ranges from 300 to 850. A 700 score was once enough to qualify for the best rates on most loans. That threshold has inched toward 750 during the recession. Consumers below 600 will be unlikely to qualify for auto loans, mortgages or even credit cards under the new tighter standards put in place by lenders.

Officials cite foreclosures and unemployment as the two main drivers of plummeting credit scores. A foreclosure can chop 150 points off a credit score. That means, a consumer with a 750 credit score -- the score needed to get the best rates even under new tighter standards -- could drop below the 600-point threshold as the result of a mortgage foreclosure.

Struggling Miami homeowners who opt for loan-modification or short sales can still face significant damage to their credit scores. A South Florida foreclosure defense attorney can help determine the best course of action for protecting your finances, your credit score and your future.

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Struggling homeowners continue to use foreclosure as the financial break they need to get back on their feet and improve their financial well-being, according to a report published in The New York Times.

Foreclosure doesn't have to be an end. More and more, South Florida homeowners are finding it offers the chance for a new beginning. If you are looking to stop foreclosure in Miami or are facing foreclosure in South Florida, hiring a Miami foreclosure defense attorney can help protect your rights and the financial future of you and your family.

Homeowners facing foreclosure can often remain in their homes, rent free, for many months, which will permit them to begin rebuilding their financial lives. The glut of foreclosures and the increasing number of legal challenges, has further slowed the process. The Times reports the average borrower is delinquent for more than a year -- 438 days -- before being evicted. In 2008, the process took about 8 months.

In Florida, the average length of time spent in foreclosure is 518 days, or about 18 months. Only New York reports a longer wait, at 561 days. The length of time in foreclosure can be extended dramatically with a comprehensive foreclosure defense litigation strategy.

Still, there are pitfalls, and a Miami foreclosure defense lawyer will be able to help determine the best course of action. As we reported on our Miami Foreclosure Lawyer Blog, dues owed to homeowners associations can quicken a foreclosure action and deficiency judgments can lead to financial problems down the road.

While anger at banks over the housing crisis is fueling part of the trend, many homeowners are staying in their homes rent free as an act of self-preservation. And, with so many homeowners owing far more on their homes than they are worth in the current market, free rent is likely to be their only return on investment. Nationwide, more than 650,000 households have not made a mortgage payment in 18 months. In about one-fifth of those cases, the lender has not even begun the foreclosure process.

Click here to read The New York Times article.

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A reduction in the number of Florida foreclosures this year is being credited to a recent Florida Supreme Court ruling that requires banks to prove they are the rightful owners of a home before seeking a foreclosure action, the Miami Herald reported.

Hiring an experienced Miami foreclosure defense attorney can help protect your rights when dealing with a foreclosure, short-sale or loan modification in South Florida. Anyone with any experience in dealing with foreclosures in Miami or elsewhere in South Florida knows it is quite common for a bank to file a notice that the original mortgage documents have been lost. The advent of mortgage-backed securities means most mortgage notes were packaged and sold as investments.

Law firms working for banks have routinely filed "lost note" claims with default notices, regardless of whether anyone attempted to find the note, according to Miami-Dade Circuit Court Judge Jennifer Bailey.

"It was very confusing. How can you foreclose on the note if the note is lost?'' Bailey said. "The judges would be trying to track the note and they're saying they own it, but don't have it and don't know where it is."

The new rule was approved in February. It was meant to address the estimated backlog of 500,000 Florida foreclosures clogging the court system. It also permits judges to sanction plaintiffs who make false claims regarding missing notes. Hiring an experienced Miami real estate attorney can help ensure a homeowner is treated fairly.

While a bank is not required to produce the note to seek a foreclosure under the new rules, it must act in good faith with both the homeowner and the courts. Previously, such cases often sailed through the system when the homeowners did not contest the foreclosure.

Judges have even found multiple lenders filing on the same property because they didn't know who owned the note.

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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