Miami Foreclosure Lawyer Blog

President Obama's effort to help homeowners avoid foreclosure is not working and the Treasury Department has failed to fix the program, the Associated Press reported. The news comes as government watchdogs report to Congress on the effectiveness of the program.

Our Miami foreclosure defense attorneys continue to report problems with the program. Those seeking to get out of foreclosure or stop foreclosure sales in South Florida need to consult with an experienced attorney about their options. Short-sale, foreclosure, strategic default, loan modifications or government assistance are all options with their own potential drawbacks and benefits.

The inspector general for the government's financial bailout plan said the plan has not "put an appreciable dent in foreclosure filings." He also said the Treasury Department has ignored demands that it set clear goals for the program. Officials are worried the program's failure could contribute to additional foreclosures. That, in turn, will further drive down prices and stall the recovery of the real estate market and the overall economy.

The program's aim is to reduce mortgage payments for struggling homeowners. But statistics show more homeowners have dropped out of the program than have been helped by it. About $248 million has been spent on the program, a small fraction of the $50 billion allotted. About 400,000 homeowners have been assisted while about 530,000 have dropped out of the program.

Critics say the government is allowing mortgage companies too much control over which homeowners will qualify for reductions in the principal balance of their mortgage loans. The program also relies on voluntary participation from mortgage companies. Meanwhile, many mortgage debt collectors make more money by forcing a property into foreclosure than they do by providing help to homeowners.

Continue reading "Government's mortgage loan modification a floundering option for Miami homeowners seeking to stop foreclosure" »

South Florida homeowners holding adjustable rate mortgages are among a new wave of property owners seeking to avoid foreclosure. A rising number of commercial property owners are also seeking ways to stop foreclosure.

Hiring a Miami foreclosure defense attorney is the first step for a homeowner or business owner looking for foreclosure help in Miami. As we have reported on our Miami Foreclosure Lawyer Blog, mandatory mediation, default judgments and damaged credit are just a few of the obstacles to consider when determining the best course of action for your situation.

The Miami Herald reports that the number of foreclosures in Miami-Dade has fallen 38 percent so far in 2010, to 18,327 from the 29,674 reported last year. But a new wave of struggling owners are emerging as the economy catches up to commercial property owners -- where vacancies are reaching new highs -- and those holding adjustable rate mortgages -- which are resetting to higher rates on properties worth just a fraction of their original purchase price.

The three judicial circuits in South Florida hope new mediation requirements will help keep cases off crowded court dockets. Miami-Dade started required mediation last summer. Broward and Monroe began their programs on July 1 under a statewide order from the Florida Supreme Court. Still, court personnel report that challenges remain as bank representatives show up unprepared. Hiring a South Florida attorney experienced with mortgage foreclosures can help ensure a homeowner is prepared to act in their own best interest at mediation.

The high-value of many commercial properties give banks a real stake in working with property owners to make sure the debt is ultimately satisfied. Unfortunately, banks often seem as disorganized in dealing with commercial loans as they do on the residential side. A commercial property owner needs to hire aggressive and experienced legal representation to protect their rights.

For homeowners with adjustable-rate mortgages, the stakes are just as high. Having survived the downturn, they are now facing rising interest rates and payments on properties that are typically worth far less than what is owed. We have written extensively about the risks and hassles of loan-modification and having an attorney on your side is well worth the cost when fighting for your rights as a homeowner.

Continue reading "Miami mortgage foreclosure help available for those with commercial or adjustable-rate mortgages " »

More than a third of the borrowers who have enrolled in the Obama Administration's mortgage modification effort are no longer participating in the program, the Associated Press reported.

In determining how to avoid foreclosure or stop a foreclosure sale, your best option is to consult with a Miami foreclosure defense lawyer to discuss your rights. In order to properly stop mortgage foreclosure, all options need to be on the table. An experienced real estate attorney will be in the best position to assist in protecting your rights and the future financial well-being of you and your family.

Our Miami Foreclosure Lawyer Blog continues to report problems with such programs. We reported in March that more than half of borrowers who enter mortgage modification are in trouble again within nine months. The unprecedented downturn in the real estate market means 1 in 4 borrowers owe more than their home is worth. This is particularly true in South Florida, which is among the most devastated regions in the nation. The median home values have fallen 28 percent nationwide to $165,100. In Florida, values have fallen by nearly half -- 45.7 percent -- the third-worst in the nation behind Nevada and Arizona.

In many cases, a mortgage modification will not be the best answer. The latest report on Obama's program found that more than one-third of the 1.24 million borrowers who have enrolled in the $75 billion mortgage modification program have dropped out. Last month, 155,000 borrowers left the program, bringing the total to 436,000 since the program began in March 2009. That exceeds the total number who have received modifications and remain current on their loans -- about 340,000 borrowers are still paying on time after a loan modification.

Economists believe the majority of those seeking mortgage modifications will end up in foreclosure, which could slow the broader economic recovery. One of the reasons for the high failure rate is that the administration pressured banks to sign borrowers up without proof of income -- one of the issues that got us in this fix in the first place. When banks later moved to collect such information, many borrowers were disqualified or dropped out of the program.

Continue reading "Mortgage loan modification no easy answer for struggling Miami homeowners" »

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" »

Bank of America has agreed to pay $108 million to settle federal charges involving excessive fees charged to borrowers facing foreclosure, the Associated Press reported. The allegations were levied against Countrywide Financial Corp., which Bank of America purchased nearly two years ago.

This is yet another case where banks have been caught taking advantage of borrowers. Hiring a trial lawyer is your best option to stop foreclosure in Miami. Borrowers should seek legal help to protect their rights as a homeowner. We offer foreclosure help in Miami and throughout South Florida. Other tactics banks use include sloppy paperwork and missing promissory notes. In a foreclosure proceeding, a bank has the burden of proof. A comprehensive discovery investigation conducted by an experienced Miami foreclosure attorney is the best way to stop a foreclosure.

Countrywide's misconduct has reached near legendary status. Last year, the top three executives of the company were charged with civil fraud and insider trading by the Securities and Exchange Commission. In this case, the $108 million settlement seeks to refund money to about 200,000 borrowers. It is the largest mortgage industry settlement ever obtained by the Federal Trade Commission.

FTC Chairman Jon Leibowitz accused Countrywide of "callous conduct, which took advantage of consumers already at the end of their financial rope."

Countrywide slapped borrowers who were behind in their mortgages with several thousand dollars worth of fees at a time. The fees included charges for property inspections and landscaping that were far above market rates; the company created subsidies to hire vendors and marked up the prices of the services.

"Countrywide profited from making risky loans to homeowners during the boom years, and then they profited again when the loans failed," Leibowitz said. It could take months to contact affected borrowers; authorities describe Countrywide's record keeping as "beyond abysmal."

Consumer advocates allege banks have not done enough to prevent foreclosures precisely because of the profits involved in collecting such fees -- Countrywide even identified it as "part of our diversification strategy" as foreclosures soared.

Countrywide is also accused of making false claims to borrowers in bankruptcy about the amount owed on their loans and failing to tell borrowers about fees and other charges. The settlement requires Bank of America to notify bankrupt borrowers about what they owe on a monthly basis.

Continue reading "Mortgage foreclosure help in Miami can prevent banks from taking advantage of struggling homeowners" »

Florida is one of several states that plan to use $1.4 billion in aid from the Obama Administration to help unemployed and underwater homeowners avoid foreclosure, CNN reported.

While this is another sign that help may be on the way for underwater homeowners or those facing foreclosure in South Florida, hiring an experienced Miami foreclosure defense attorney is your best chance at being one of the few who gain access to the assistance necessary to protect your financial well-being.

Consumer advocates argue direct payment to struggling homeowners is necessary to help stem the tide of the mortgage crisis, which has led to plummeting property values, more underwater homeowners and more foreclosures in a repeating downward spiral. But housing experts contend paying off loans for out of work and struggling homeowners could deter people from looking for work.

The Hardest Hit Fund was announced in February and is aimed at helping out-of-work and homeowners in the hardest hit areas avoid foreclosure. Despite past efforts, home prices continue to decline and foreclosure rates remain at record highs. As part of the effort, the federal government is giving $2.1 billion to 10 states. Other states include Michigan, Arizona, California, Nevada, North and South Carolina and Ohio.

Continue reading "Program to pay struggling South Florida homeowners facing foreclosure, unemployment, underwater mortgages" »

The number of homeowners who defaulted on their home mortgage loans, even after getting cheaper terms through the government's home loan modification program, doubled in March according to an article this month in the New York Times.

This is another example of why loan modifications are not always the best answer for South Florida homeowners struggling with underwater mortgages, foreclosure or bankruptcy in the Miami area. As one of the nation's hardest-hit real estate markets, homeowners need an experienced Miami foreclosure defense attorney to push for a reduction in principal or assist you and your family in seeking other alternatives.

As we reported last month on our Miami Foreclosure Lawyer blog, more than half of all homeowners continue to struggle even after loan modification.

The latest data, released Wednesday by the U.S. Treasury Department, shows the number of terminations in the program has skyrocketed to 2,879 in March, up from 1,499 in February and 1,005 in January. Almost all terminations were apparently the result of a borrower being unable to make new payments.

While the government's stated goal is to assist 4 million homeowners through modification, only 227,922 modifications had been made through the end of March.

Continue reading "Defaults in home-loan modification program increase; consulting an attorney the best option" »

More than half of borrowers who received loan modifications on delinquent mortgages default again within nine months, according to a new federal report published by Bloomberg News.

South Florida homeowners facing default or foreclosure should contact an experienced Miami foreclosure defense attorney to discuss their options. Government and private mortgage assistance programs, short sales, strategic default, foreclosure and bankruptcy are all options best discussed with a qualified South Florida real estate lawyer.

The re-default rate for modified loans in the first quarter of 2009 was 51.5 percent by the end of the year. Payments at least 30 days late climbed to 57.9 percent when measured during the previous 12 months.

One in four homeowners are struggling with underwater mortgages -- meaning they owe more on their home than it's worth. Florida has been among the hardest hit areas in the nation as property values have plummeted and unemployment continues to linger in the double digits.

The median price of a U.S. home was $165,100 in February, down 28 percent from the height of the market in July 2006, according to the National Association of Realtors. In Florida, values have fallen 45.7 percent, the third-worst in the nation behind Nevada and Arizona.

The number of homeowners more than 60 days late on their mortgage payments climbed 49.6 percent year-over-year -- leading to an estimate of 4.5 million foreclosure filings this year, according to RealyTrac.

As of the end of February, the government home-loan modification program, had assisted 168,708 homeowners with permanent modifications.

Continue reading "South Florida homeowners continue to struggle even after loan modification" »

The Obama Administration moved on Friday to provide long-awaited assistance to homeowners struggling with underwater mortgages, even as new data suggests Florida is the hardest hit area in the nation amid the lingering foreclosure crisis.

While help will not be available for everyone, an experienced Miami foreclosure attorney should be called to assist struggling South Florida homeowners determine the best course of action, including loan modification, short sales, foreclosures, principal reductions and bankruptcy.

The government reported this week that 16 of the top locations in the nation for troubled FHA mortgages are in Florida -- including Miami where 18 percent, or nearly 1 in 5 federally-insured mortgages, were in trouble.

CNN reported Friday that the new effort would require mortgage companies to reduce monthly payments to no more than 31 percent of a borrower's income and mandate suspension of payments for 3 to 6 months for some borrowers, including the unemployed. Additionally, those in the government's loan-modification program, known as the Home Affordable Modification Program, would be able to get a reduction in principal if their outstanding loan balance is greater than 115 percent of their home's value.

The Washington Post provides a good Q & A for struggling homeowners, which answers questions for unemployed borrowers, those struggling with underwater mortgages, program restrictions, second mortgages, FHA loan options, impact on credit scores, delinquent payments, reductions for owners already in a loan-modification program, and taxpayer implications.

QA Will foreclosure-prevention measures affect me.pdf

Continue reading "Help may be coming for South Florida homeowners struggling with unemployment, underwater mortgages " »

The Obama Administration is proposing a program that would pay some homeowners to sell at a loss, according to an article in the New York Times.

The announcement is the latest in a string of government and state programs designed to assist residents facing foreclosure. An experienced Miami foreclosure attorney can help you determine the program that is right for you and fight to keep you in your home.

This latest program, which will provide underwater homeowners with cash in an effort to induce them to sell for less, is the latest attempt to deal with the estimated 5 million households who are behind in their mortgage and in danger of foreclosure. South Florida is among the hardest hit areas in the nation.

The government's $75 million mortgage modification plan is another program available to Miami homeowners, though it has helped just a small percentage of eligible homeowners.

An estimated 1 in 6 U.S. borrowers owe more on their home than it is worth after the nation's real estate bust erased more than $3.3 trillion in home equity during 2008, according to the real estate site Zillow.

The new program takes effect April 5 and will encourage hundreds of thousands of borrowers to sell their homes through short sales, a process where the bank permits a house to be sold for less than the amount owed.

Continue reading "Underwater homeowners in South Florida can seek assistance through new government short sale program" »

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 " »

Miami and South Florida has a new trend to add to record levels of foreclosures, delinquencies and loan losses. Many distressed homeowners are choosing strategic defaults or walkaways. Surprisingly, borrowers with good credit are more likely to walk away from home underwater than a subprime mortgage borrower.

A "strategic default'' occurs when a borrower abruptly and intentionally stops paying mortgage. Using a massive sample of 24 million individual credit files, researchers found homeowners with high credit scores are 50 percent more likely to walk away than lower-scoring mortgage borrowers. Many who chose a strategic default understand the consequences of what they're doing. They are clearly sophisticated. They usually are selective about payments they make. For instance, they often pay home equity lines until they bail on their first mortgage and many draw down more cash on the equity line.

Recently, the national credit bureau, Experian, identified the characteristics and debt management behavior of homeowners who bail out of their mortgages. They found 588,000 strategic defaults nationwide in 2008, more twice the number from 2007. Eighteen percent of all serious delinquencies lasting over 60 days are strategic defaults.

Strategic defaulters go from perfect payment histories to no payments at all. Most distressed borrowers try to keep paying their mortgage after they've fallen behind. They want to save their homes, not dump them.

If you are considering a strategic default, know your credit scores will be severely hit. Many see it as the only practical solution to deal with their negative equity. Strategic defaults are found everywhere that home values boomed and cratered since 2006. In Florida last year, the number of strategic defaults was 46 times higher than in 2005. In other parts of America, defaults were about 9 times higher in 2008 than in 2005.

There are dangers in trying a strategic default without strong foreclosure defense counsel. You will lose points on your credit score and may ultimately get hit with a deficiency judgment. The best advice is to fight back against the bank to make sure they have reason to waive the deficiency and let you walk away.

Strategic default - 09_20_2009 - MiamiHerald.com.pdf

Help from President Obama is on the way for homeowners facing foreclosure in Miami and South Florida. The Obama administration is fighting to get Banks and mortgage companies to act with urgency on loan modifications. Most recently, executives from 25 mortgage companies pledged to reach a new goal of about 500,000 loan modifications by Nov. 1, 2009. However, this falls far short of Obama's original goal of modifying loans for up to 4 million borrowers.

The plan is not without its problems. Many Miami and South Florida Homeowners and their attorneys complain the process of loan modifications is a bureaucratic nightmare. Many say the mortgage companies are doing things the plan plainly prohibits. Many borrowers are hit with upfront fees and given confusing information. There are long delays in the loan modification process which does not stop all lenders from moving forward with the foreclosure process in Court.

There are many reasons why this program is problematic. The loan servicers have hired thousands of new employees who must be trained on new operating procedures. Hundreds of investors have purchased the mortgage-backed securities and many have different rules on how to modify a loan. Not to mention the fact that thousands of borrowers call every day trying to modify their loans.

As of July 2009, the loan modification program has only about 200,000 borrowers enrolled. They were given trial modifications requiring they may timely payments for three months before a permanent modification is approved. The loan servicers are paid $4,500 for every modified loan once the homeowner makes on-time payments for three months. Almost 170,000 borrowers were denied a modification, but the Loan servicers refused to state why they denied the homeowner's application. That is another problem, that the reason for these decisions are not made public and there is no appeals process.

Obama tells mortgage firms to pick up pace - Jul. 28, 2009.pdf