Articles Posted in Dangers of Foreclosure

Popular country singer Tim McGraw announced that on each of the remaining stops of his tour this year, he plans to give away a mortgage-free home to a U.S. veteran of the armed forces. flag1.jpg

The singer’s web site indicates he and Operation Homefront have gifted more than 100 homes to veterans and their families. By the close of his national tour in September, he said an additional 30 homes will have been given away.

McGraw cited the sacrifices so many U.S. veterans and their families have made, and noted the indelible mark made on his heart by those he has already aided. In his previous tour, he gave away 25 mortgage-free homes to wounded veterans or those whose families were in need.
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A bank is lobbying for a 90 percent reduction on city fines issued for code violations after allowing a 2011 foreclosure property to lie vacant and unkempt in a neighborhood for the last four years. zombieforeclosure.jpg

Wells Fargo is asking that the $57,000 in fines be reduced down to $5,700 after the bank took corrective action on the issues.

Now, let’s set aside the fact that when the financial crisis came to a head, lenders were loathe to give homeowners a break in the form of principal mortgage loan reductions or modifications that would have made payments more manageable. Let’s set aside the fact that the whole reason the financial crisis occurred in the first place was because lenders an mortgage services acted unethically and at times illegally in the way mortgages were sold, bundled and re-sold. Let’s set aside the fact that when the banks were fined for these actions, they promised to make it right by paying billions of dollars – much of that in the form of credit to distressed homeowners – and that they often failed to follow through on those promises.
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The wife of a retired minister is suing JP Morgan Chase, claiming the bank’s foreclosure action caused her husband’s fatal heart attack.

Miami foreclosure attorneys
understand the enormous stress and pressure dealing with a foreclosure action can cause homeowners. Unfortunately, banks have run roughshod, with little or no regard for the rights of property owners or the dignity of families. It’s no stretch to say there are likely thousands of foreclosure victims who have suffered serious or fatal health complications as a result of Wall Street greed. Instead of punitive measures, the government has rewarded the nation’s largest financial institutions with bailouts, sweetheart loans and a free pass on criminal investigations or other punitive measures aside from the occasional slap on the wrist.

Stopping foreclosure in Miami requires an experienced and aggressive law firm that won’t back down and that will put banks and their attorneys in their place. 1007974_small_house_2.jpg

In this case, the Huffington Post reports Wanda Jo Engel claims the bank’s wrongful foreclosure action overwhelmed her husband Harry Engel and ultimately caused his death. The 79-year-old retired minister collapsed in a chair at home, just days after receive Chase’s eviction notice.

A spokesperson for Chase now claims the bank never tried to foreclose!

As banks continue to unduly pressure homeowners, these cases continue to surface. In May, a California man killed himself in the middle of a battle with Wells Fargo. In March, in Ohio, a man facing eviction shot his wife before killing himself.

Our foreclosure defense attorneys often discover errors in bank paperwork or determine the bank has not even proven it has the right to foreclose on your property. Banks have been caught lying, cheating and stealing. And yet it is the unrepresented homeowner who too often pays the price.

The Engels had lived in their home for 22 years and were current on their payments, according to the lawsuit. They claim during a refinance attempt in 2009 a Chase representative told them to miss a payment to more easily qualify for government programs for homeowners. According to the lawsuit, the bank then later rejected the couple’s mortgage application and set about foreclosing on the home. It claims a representative of Chase even went to the home to enforce the eviction notice.

Not us says Chase! The bank later clarified it was threatening to foreclose and was busy telling the homeowners they would have to pack up and get out. But it hadn’t actually filed a foreclosure action yet.

There have been numerous instances of banks giving homeowners bad advice. Of telling hardworking families to miss a payment or two to qualify for assistance. Or of banks lowering mortgage payments as part of a temporary modification. The bank then rejects the application and uses the resulting arrears as an excuse to foreclose against the homeowner.

If you are dealing with foreclosure, or mortgage loan modification in Miami, contact an experienced law firm and Negotiate from Strength!
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A recent article about the problems with the bank industry concluded that despite ongoing settlement talks between banks and state governments, foreclosure fraud and securitization fraud will continue for those involved in Miami foreclosures.

Miami foreclosure defense lawyers have witnessed the major problems with securitization of mortgages and how the buying and selling of mortgage loans has caused many problems with banks’ abilities to prove who should be bringing a foreclosure action. This has created more frustration for distressed homeowners, who are stuck paying more for their home than it’s worth.
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The article suggests securitization fraud will continue to spread, even after a major settlement between banks and states goes through. The article also reports that New York Attorney General Eric Schneiderman, once a main opponent of the settlement, is now considering joining. Not coincidentally, Schneiderman was just appointed by President Barack Obama to a task force created to investigate banks and fraud. The Obama administration has been pushing for the settlement.

The article goes on to look at the major problems with securitization and how foreclosure fraud benefits those selling securities because it covers up the lies created by false documents that are used to take away people’s homes. For investors, who are being promised big benefits, lying only becomes a problem if harm is done. If the foreclosure goes through, the harm is minimized. If the homeowner stays in the house and doesn’t pay because there’s a mix-up in documentation, the investors lose big money.

The basics of securitization is that sellers find investors and promise a profit. They take the money, pool it and buy mortgage loans. A trust is set up to receive payments from banks via homeowners and distribute payouts to investors. The banks are the trustee and oversee the trust.

But if there are problems with paperwork, including whether the trust actually owns the loans, the deal becomes moot. That’s where the fraud comes in. In cases where the trust couldn’t prove who owned the loans — after they were transferred several times in MERS but not in local clerk’s offices — officials turned to creating false documents or fabricating paperwork to be able to foreclose.

The issue comes back to Schneiderman, mainly, because many of the trusts are in New York, which would give him jurisdiction. Many are also in Delaware, where Attorney General Beau Biden is opposing the settlement.

The problem with the settlement is that it is far too premature. Many states have done little investigating and don’t know just how deep the problems are. Rather than holding banks accountable and looking into just how many problems they created with their lies — both for homeowners and investors — they are willing to drop it, give them immunity from lawsuits and take their money.

If the settlement is signed, there’s nothing that stops banks from continuing these injustices. Rather than fully discovering all the problems, these banks are going to be allowed to get away with it in the future. And the settlement will protect them from lawsuits. Perhaps a sharply divided Congress — that can’t seem to agree on anything — would be able to help.
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For the better part of a year, the Obama administration has pushed state attorneys general to agree to a $25 billion settlement with banks, though it would do little to help homeowners stuck in Miami foreclosures, those with underwater mortgages or those that see strategic default as their only option.

This settlement will squeeze cash from the country’s biggest banks, but that doesn’t mean it’s going to trickle down to homeowners who really need it. The states and feds will take their share for their “work” on the case and then chunks of it will probably go into funds that the government can make interest from and eventually, some homeowners who have had their rights violated could end up with some money that probably won’t right the wrongs.
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Miami foreclosure lawyers have been following this issue because it could be a major event in the foreclosure process for many Americans. If the attorneys settle, they will lose the ability to sue on many fronts, even if they later discover major violations that banks committed in their state.

A settlement also means that government agencies and their vast resources will be crippled in their quest to investigate these acts, which will make discovering what really happened more difficult. While the state and federal governments can subpoena information much easier, an individual homeowner would have to file a lawsuit, jump through legal hurdles and then spend the money to investigate their own case. The amount of information they could get would likely be very narrow.

The overarching concern here is that while banks are going to combine to dish out $25 billion, is it really going to help homeowners? Or, is it going to become a pawn in the political races that doesn’t actually provide anything for people who need the help the most.

About one in five mortgages are now under water, meaning the homeowner is paying out more for the house than it is actually worth. Many people in Miami are in this situation and it is very frustrating. For people who have job opportunities elsewhere, they may have to turn those down. Other people who had hoped to use their house to bring in a profit and use it as an investment no longer can hold out hope of that.

According to The Huffington Post, the banks would pledge a certain amount of money that is supposed to go to homeowners. But the banks would get credit for helping borrowers who owe less than 175 percent of the value of their houses. The newspaper quoted sources that said the Obama administration is giving states a hard deadline to sign the deal.

What the article doesn’t state is exactly what this “pledge” to help homeowners really means. It also doesn’t state what homeowners would actually get out of the settlement. If residents feel they were the victim of illegal foreclosures, they could take their case to a committee that would require the bank to fix problems and banks would be immune from civil penalties up to 1 percent of the loan. Essentially, it sounds as if the banks would have little financial liability. The foreclosure could still go through, the homeowner kicked to the curb.

This settlement is a mess and it will be interesting to see if anything good actually comes of it. What is more likely is banks will still make profits and homeowners facing Miami foreclosures will still be victimized without the assistance of an experienced foreclosure defense attorney.
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CNNMoney recently reported on the troubles that three separate families are going through with foreclosure, but because of paperwork problems and mortgage servicers going bankrupt that have forced the families to relocate, consider strategic default and lose their house to foreclosure.

Being saddled with a Miami foreclosure can be a heart-breaking experience, especially for families with children who get caught up in the stress of the situation. Credit scores can be hit hard and people must consider all options.
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Perhaps the best option is fighting back against the banks with an experienced Miami foreclosure lawyer. Foreclosure defense lawyers have spent years watching the banks and the tactics they use against homeowners. Many of these plans are fraught with less-than-ethical moves and with money in mind.

Banks have filed faulty paperwork in foreclosure cases, used robo-signing practices in order to speed up a foreclosure when documents that were supposed to be verified weren’t, created documentation to support a foreclosure that was never in the file and other misdeeds.

Homeowners can use these to their advantage because documentation problems can often be used to show that the bank doesn’t know who actually owns the house. This can lead to a victory for homeowners, or sometimes a delay that can benefit them. Illegal bank moves can also lead to judges tossing out the case against banks altogether if a lawyer can show that the homeowners’ rights were violated in the process.

In one case, a family chose a strategic default after a battle that went on for more than four years, following a routine refinancing of their mortgage. The couple decided to leave their house, purchased in 2007.

In 2009, the mortgage servicer ceased operations, so when the couple refinanced their loan to get a better rate, they received word from their bank that they were behind on the old loan. When the mortgage servicer went bankrupt, the government froze its assets, including customer payments.

Adding even more complication to the case for this family was that Quicken, the company that refinanced their loan, sold the servicing rights to the new loan to the bank, so the couple was sending checks to the bank and at the same time receiving notices from the same bank saying they were behind on payments. They started getting barraged with notices and ended up moving. They are now suing the bank for violations of debt collection abuse laws.

Another couple in the article lived in their house for two years before being told they didn’t technically own the home. Right after they bought their home, the title company went bankrupt and the company never transferred the money the couple paid or the title to the bank.

The couple’s money ended up being sent to the state, which was handling the title company’s accounts. The bank then put a lien on the house and followed that up with a foreclosure notice. After clearing up the issue, the bank agreed to drop the lien, but not after they first asked the couple for an additional $40,000. Now, they are expected to stay in their house at the current price.

A third example of problems with foreclosures lead the author of the article to New Port Richey, Florida, where an older couple was forced into default on their home loan because of medical bills. The couple qualified for a trial modification through HAMP, making the payments smaller. But the government program kicked them out a few months in.

The notice from the bank said they were disqualified for not making payments in the month they were due. They made payments for January in December — essentially making payments too soon. The bank finally recognized the problem eight months later and rectified it.
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Banks are now coming under fire not only for their mishandling of many Miami foreclosure cases, which has led to people considering strategic default on their underwater mortgages, but now officials are being questioned about whether they forced people into buying insurance through companies with which they have ties.

As we wrote on our Miami Foreclosure Lawyer Blog recently, this issue isn’t going away any time soon. Our Miami foreclosure lawyers believe this is just another example of banks using their power to exploit the powerless as they hold hostage the one asset that really means most to people — their homes.
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A recent article in American Banker reports that a recent New York Times article on the issue brought national attention to the issue of force-placed insurance. Now, a group of state attorneys general are adding force-placed insurance to its mortgage servicing settlement that has been in the works for months.

This is the large-scale settlement that most attorneys general throughout the country are working on settling so they can make money off the banks without fully investigating all their wrongful acts. Florida, unfortunately, is one of the states that is going along with this settlement, which would ban states from bringing certain legal actions against banks for their crimes in the future. There are a handful of states, including New York, that have vowed not to settle, but would rather investigate, let the truth come out and hold these banks accountable.

Force-placed insurance is when banks buy insurance on behalf of uninsured borrowers and then add the cost to their mortgage debts. In many cases, homeowners don’t realize a portion of their monthly mortgage payments are going toward that insurance and not toward their mortgage debt.

Allegations of wrongdoing were nearly nonexistent even as recently as two years ago, but now there are allegations that kickbacks were involved. In some cases, The New York Times article pointed out, banks owned or were connected to the insurance companies they were paying to write up policies for distressed homeowners.

The American Banker article reports that government authorities may be the people’s best chance at this point of exposing the issue of force-placed insurance, given their abilities to request documents and bring criminal or civil actions.

The article also suggests that the Consumer Financial Protection Bureau could enter the fray and look at the issue. Last year, HUD transferred its authority to enforce the Real Estate Settlement and Procedures Act to that bureau.

Of course, that doesn’t mean that Miami foreclosure defense lawyers are waiting on the government to act. There have already been civil lawsuits filed on behalf of homeowners by lawyers in Minnesota as well as Florida. Some mortgage servicers have already succumbed to pressure and altered their practices, the article states.

This is certainly an issue to keep an eye on because it is another example of ways the largest banks in this country have attempted to game the system and profit off the American people.
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Bank officials have managed to skirt prosecution from government officials, despite obvious robo-signing, falsifying documents and other unlawful practices that have thrust homeowners into foreclosure, short sales and strategic default.

Our Miami foreclosure defense lawyers hope that even though prosecutors traditionally haven’t put much pressure on bank officials, perhaps industry officials will use the court system to hold the banks’ feet to the fire for their transgressions.
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If the government isn’t going to stand up to help homeowners who are struggling with Miami foreclosure, then who will? Our lawyers are fighting for Miami homeowners, but we do so on an individual case basis. Someone must step in and offer some real punishment for these tactics.

According to a recent story in The New York Times, a New York financial services agency is investigating banks to determine if they fraudulently steered homeowners into overpriced insurance policies. It’s already been reported that banks encouraged minority borrowers into subprime loans when they qualified for regular loans because the higher interest rates were more attractive to investors.

Now, it appears from the investigation, bank officials encouraged distressed homeowners who were falling behind on insurance payments to sign up for insurance policies that were up to 10 times as expensive as their original plans. In some cases, the banks offered policies that were in-house and controlled by the banks themselves, bringing up conflict of interest questions and suspicions of kickbacks as well.

Among those being investigated were JPMorgan Chase, Bank of America, Citigroup and Wells Fargo. The state office doing the investigation sent out 31 subpoenas and other legal notices in October as part of its investigation.

This brings up an important issue, however. Because many states are in negotiations with banks to come to a large-scale settlement for the banks’ misdeeds, would something like home insurance be covered? Since New York is one of a handful of states not participating in this get-out-of-jail-(relatively) free negotiation, it’s likely it could continue its investigation in the home insurance issue, despite the agreement with the other states and the banks.

It appears this is just another scheme devised by banks to keep a grip on their borrowers. The Times article suggests that when homeowners get behind on home insurance payments, the banks attempted to get homeowners to take out even more expensive policies. This has also hurt the real estate market, as homeowners have found it difficult to refinance their loans after banks tied this insurance coverage to their houses.

In general, mortgage servicers are allowed to take out insurance policies on homes when borrowers allow coverage to lapse. But homeowners end up picking up the cost in their mortgage payments, sometimes without knowing it. While some increase is expected because insuring people who have fallen behind on payments is risky, the investigators say some of the increases are exorbitant.

This is just another sneaky attempt for banks to make more money off borrowers. It is the reason many Miami homeowners are struggling with foreclosure and forced to make difficult financial decisions that affect their future. Let’s hope more of these investigations pop up so the truth about what banks have been doing for years comes out.
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It has been slow coming and our Miami foreclosure defense lawyers have been begging the question for years — why aren’t banks being criminally prosecuted for their illegal acts in foreclosures? Acts that have sent the nation into an economic tailspin, as mortgages are underwater and people are considering walking away from their homes?

It’s a valid question now in 2011, years removed from when the bottom fell out of the real estate market and Miami foreclosures began popping up all over the city. Speculative buyers were leaving and the rest of us were left to pick up the pieces. But then, prices of our homes began dropping, unemployment spiked and many people who call Miami home were left trying to fight for their homes after missed mortgage payments.
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And the banks have been at the center of all the problems. They were more than happy to hand out billions of dollars in loans and then neatly package them and sell them to investors as securitized mortgages, in many cases even though bank officials knew the loans were bad. But after the bubble burst, they were far from prepared to brace for the wave of foreclosures that would soon hit.

A recent Politico article looks at the fact that state prosecutors are now just beginning to treat foreclosures as crime scenes and not just a civil issue. That’s because banks have consistently broken laws in how they handled the foreclosure crisis.

There are examples of workers who were ordered to maliciously falsify foreclosure documentation so they could steal away a person’s home. Others deliberately authorized robo-signing practices, where outside companies were signing documents on behalf of bank officials who should have been checking them for accuracy. Bankers have been accused of selling mortgage loans to investors they knew to be bad.

Yet, in the last three years, all we have seen as American citizens is the Federal Reserve lending out $7 trillion of taxpayer money to make sure those same bankers survived the financial crisis — a process by which they made $13 million — and the government’s weak-willed attempts to put aside money to help homeowners, which has been rarely used by banks, who had no obligation to play ball.

But in recent months, several attorneys general have stepped up and begun bringing criminal charges against bankers, even as the rest of the country’s attorneys general — including Florida’s — have been more than happy to negotiate a weak settlement with banks, allowing them to write a check to pay for these injustices with little help going to the people who were victimized by their actions.

While the Obama administration has pushed these state prosecutors and others to lie down and settle with the banks, some are rejecting that notion and refused to sign up as part of the negotiating. Rather, they are fighting back on behalf of their constituents.

In Massachusetts, a civil lawsuit was filed against five major banks and the Mortgage Electronic Registration Systems alleging foreclosure fraud. The lawsuit alleges mortgage servicers as a matter of practice backdated and falsified documents in order to move foreclosures along more quickly.

In Delaware, Attorney General Beau Biden — son of Vice President Joseph Biden — is also suing MERS, Politico reports, alleging unfair and deceptive practices. New York Attorney General Eric Schneiderman has stepped in and stopped a settlement of Countrywide’s fraud in selling mortgage-backed securities it knew were bad.

On our Miami Foreclosure Lawyer Blog, we will continue looking at how the actions of these aggressive attorneys general have changed the legal landscape and the relationship between banks and the states where they have caused so much pain and stress.
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Many were thrilled to hear that all 50 state attorneys general and federal authorities were negotiating with the large U.S. banks to punish them for their robo-signing misdeeds, fabricated documents and stepping on some homeowners’ rights.

This came after every U.S. state filed lawsuits against the banks, claiming these actions were a violation of homeowner rights and were illegal. But, according to The New York Times, it appears the settlement will do little to punish the corporate banks that ran fast and loose, causing the Great Recession that affected nearly everyone in the country.
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According to a recent article, the newspaper reports that sources have said the settlement will cost about $25 billion, which seems big on the surface. But under the agreement, banks would only pay about $3.5 to $5 billion, paid by about a dozen financial institutions.

The majority of the difference would be in the form of credits to banks that consent to lower the amount owed on mortgages owned or serviced for private investors. It’s unclear, the newspaper reports, how many credits, but negotiators would come up with a formula. It is amazing that banks, who made record profits, would be let off the hook by the government despite their actions.

While Miami foreclosure defense lawyers didn’t hold out great hope that these settlements would make a large impact, many others did. One would expect that the 50 attorneys general would have done more to help the many homeowners struggling with foreclosure in Miami and elsewhere in South Florida.

While $5 billion is a lot of money, spread over several companies it won’t exactly sting. In comparison to the damage done to our economy, the world’s economy and the many homeowners who lost their jobs and homes, it’s merely a slap on the wrist.

It is hoped that bank officials will care enough about the penalty to stop the practice in the future. But there is also concern that there are documented incidents in recent months that robo-signing still exists, even as banks held off on filing mortgage foreclosures for a number of months.

The article also states that government-backed Fannie Mae and Freddie Mac loans will be excluded from the settlement. Only loans on the banks’ books are involved. Banks are expected to dole out $1,500 to homeowners whose homes were lost to foreclosure. For those cases where there was no fraud alleged, it’s free money for nothing. For those who were rolled over in the process, it means nothing.

The rest would be split between the federal government, state bank regulators and other support systems. Sensing this is a sham of a deal, officials from Delaware, New York, Massachusetts and Nevada have dropped out of the talks, coming to the conclusion, rightly it appears, that this isn’t going to do anything to help their constituents.
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