Miami Foreclosure Lawyer Blog

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" »