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" »

In Miami and South Florida, Strategic Defaults are on the rise. Homeowners stop paying their mortgage and fight the foreclosure with an experienced defense attorney. They stay in their homes for years. There is no rush for a loan modification or shortsale. They know the dangers of a deficiency judgment but know there is a way out. One thing for sure, its only a strategic default if you have a strategy with experienced defense counsel.

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Many Banks and TV Pundits place blame for the mortgage foreclosure crisis squarely on the homeowners. How dare a delinquent borrower in Miami or South Florida try to stop foreclosure by hiring an experienced foreclosure defense attorney?

Well, Jon Stewart of the Daily Show on Comedy Central recently filed an excellent report on how badly the Banks are taking advantage of us since getting billions of taxpayer bailout dollars. Banks cannot claim the moral high ground on this issue.

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" »

South Florida homeowners considering strategic default and foreclosure are not alone. Matt Lauer of The Today Show on MSNBC ran an interesting story on the problem hitting homeowners throughout the country.

If you are considering a strategic default it is best to hire the right foreclosure defense attorney.. Your chances of avoiding a deficiency judgment and facing financial ruin are much better with good attorney on your side. The risks of a strategic default may be big, but they can sometimes be avoided by negotiating from strength with your lender.

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Its not funny to Miami and South Florida homeowners fearing foreclosure who owe more on their mortgage than their home is worth. Being upside or underwater on your mortgage can wipe out your savings, force you out of your house and leave you with a deficiency judgments. Strategic default, walk away, but don't give up. You need competent counsel with prior bank experience to get through this difficult time.

Stephen Colbert explains the difference between your mortgage and your word.

More than half of all homeowners fearing foreclosure in Miami and South Florida are underwater on their mortgages and facing deficiency judgments. One Law School Professor says the smartest move is to walk away and don't feel guilty about it. Loan Modifications aren't working. Short sales put you out of your home. Banks won't reduce principal balances. Strategic defaults are increasingly becoming the best financial decision for some borrowers.

Brent T. White, a University of Arizona law school professor, wrote new academic paper entitled "Underwater and Not Walking Away: Shame, Fear and the Social Management of the Housing Crisis."

 His conclusion was that the 15 million U.S. homeowners underwater on their mortgages should stiff their lenders and take a hike.

 Many would save hundreds of thousands of dollars that they "have no reasonable prospect of recouping" in the years ahead. Plus the penalties are nowhere near as painful or long-lasting as they might assume.

Professor White explains that while "credit scores get whacked when you walk away, "one can have a good credit rating again -- meaning above 660 -- within two years after a foreclosure" as long as you stay current with other creditors. 

Better yet, homeowners can "strategically" default and make preparations for a few years of limited credit.
In Florida, many lenders may decide that it is not worth the legal expense to pursue walkaways, or our firm may be able to find flaws in the mortgage documents, disclosures or underwriting to challenge the original contract.



Professor White's main point is that people let their emotions get in the way of clear financial thinking about mortgages. Most owners are too worried about feelings of shame and embarrassment after a foreclosure, and ignore the powerful financial reasons for doing so. They often fall prey to "the social control of the housing crisis" -- pressures and messages continually sent to consumers by the "social control agents," namely banks, government and the media. The mantra that these agents -- all the way up to President Obama -- pound into owners' heads, White said, is that "voluntarily defaulting on a mortgage is immoral."

The other side of the coin for homeowners is that Banks set the rules during the housing boom, handing out home loans with no down payments, no income checks and inflated appraisals. Now that property values have dropped 20% to 50% in many areas, banks have been slow to modify troubled mortgages and reluctant to reduce principal debts.

 Only when homeowners cut through the emotional fog and default strategically in large numbers, White argues, will this inequitable situation be seriously addressed. 

 The best chance many will have is to hire aggressive, competent counsel to fight for their financial freedom.

Professor advises underwater homeowners to walk away from mortgages - latimes.com.pdf

Underwater and Not Walking Away- Shame, Fear and the Social Management of the Housing Crisis.