Articles Posted in Mortgage Mediation

Foreclosures have caused people to consider strategic default, short sales and other less-than-ideal situations to cure their underwater mortgage.

Now, it appears cities and counties are considering suing the banks that created the problem in the first place. At least that’s one option the city of Detroit is considering, according to The Michigan Citizen.
Our Miami foreclosure defense lawyers believe that the problem with foreclosure in Miami and elsewhere has been exacerbated by the unlawful activities of banks. Many foreclosures could have been prevented had bank officials not used robo-signing practices and created false documents to support foreclosures.

Had they actually worked with homeowners in using government-backed programs, rather than try to unlawfully take away people’s homes, communities might be in a different position than they are today. Many Florida communities, which base their budgets on property taxes, have seen those values fall drastically.

According to the news article, Michigan officials are considering imposing an emergency manager to combat its mounting budget deficit. But some believe that suing the banks based on fraudulent lending practices could be an option.

This goes to the issue of the settlement that the majority of state attorneys general are working on with banks. Michigan is one of the states currently negotiating with banks to come to a settlement, which would preclude legal action. It’s unclear whether individual cities and counties would still be able to sue if the state is part of the settlement.

According to the news article, this wouldn’t be the first time a city sues the banks. Others have seen the unlawful activities of banks and how that has affected their communities. Some have tried to show that the reason communities have been devastated with budget deficits is because of the bank-led home foreclosures and the unlawful practices used to accomplish them.

A recent court decision as well as a Federal Reserve Board review may actually favor communities attempting to bring these lawsuits. Evidence has been mounting for years that shows bank fraud and abuse has led to a major hit to community tax bases.

Baltimore and Cleveland have both sued banks. Baltimore officials claimed that Wells Fargo officials pushed high-interest mortgages on black residents. Cleveland officials sued 21 banking institutions hoping to recover millions of lost taxes from properties that have taken a hit in value after thousands of vacant homes have been demolished.

News has continued to pour out suggesting that bank officials were given bonuses and incentives to push high-interest sub-prime loans onto, in particular, minority borrowers. For bank officials, the higher interest loans looked better for investors. For lenders, these loans have caused them undue financial hardship at a time when they needed it least.

Some analysts believe that the Federal Reserve Board rulings as well as guidance from the Department of Justice may be able to help cities and counties take steps to sue the banks for their misdeeds.
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A woman staged a protest, with some good friends from the “Occupy” contingent and forced her bank to modify her loan so she would stay in her house, MSNBC reports.

It’s a bold move, but one that paid off. Most homeowners aren’t so bold. Many are so beaten down by failed negotiations with the bank that they lay down and let the bank take away their home. For others, even seemingly aggressive tactics don’t work with bank officials who are still looking to make a buck at any cost.
The time is now to act. If homeowners close to losing their home to foreclosure in Miami want to keep their homes, they have to fight back. You can’t sit back and hope the bank treats you well because they won’t. They have millions of foreclosures to deal with and it takes more than a nice attitude to convince them to modify a loan or figure out a way to keep you in your home.

For many financial institutions, the foreclosure process is more profitable and you and your home are in the way of this quarter’s profits. Miami foreclosure defense lawyers can level the playing field. Challenging who owns the house’s note, how much money is owed, or looking at a loan modification or short sale are all options that must be discussed.

In La Puente, California, a woman had tried and failed to save her home from foreclosure for two years. She had tried to work out a modification to her loan to no avail. She tried working with bank officials to see if there was any way she could save her home, but they said no. Sept. 28 was the date they would come to evict her from her house.

But rather than pack up and give in, the woman and her family protested. They hunkered down inside their house and enlisted people from the Occupy Wall Street movement and media interest in her case to create a turn of fortune.

Fannie Mae canceled the eviction notice and offered the family a loan modification that allowed them to stay in their home. While Fannie Mae and loan servicer OneWest wouldn’t discuss the case, the family’s dramatic moves likely played a role.

When the family attempted to make a late payment, OneWest refused to accept it and told them to pursue a loan modification, a long process that ended in rejection. In the meantime, a family member who was contributing to the mortgage payments was killed in a shooting and another lost income as a state employee.

The family kept the money they would have used to make payments to the side in case OneWest would eventually accept their money. And after joining forces with Occupy L.A., protesters camped out at her house and 200 protested in front of OneWest CEO Steve Mnuchin’s Bel Air mansion. With TV crews filming, the family’s matriarch was arrested after protesting outside Fannie Mae.

Eventually, the companies decided to do the right thing and work with the family. This is what needs to happen in order for banks to listen. Maybe not protests, but certainly fighting back and showing banks they can’t just walk over people is a move a Miami homeowner should always make.
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A recent NBC News report details how the government’s loan modification program has actually made things worse for people battling foreclosure in Miami and elsewhere.

These government-backed programs have done little to help struggling homeowners. You can’t rely on the government and you certainly can’t bank on the banks trying to help you if you are struggling with foreclosure in South Florida or anywhere else. The best solution is seeking an experienced Miami Foreclosure Defense Attorney who can help you strike back at the banks in court, where the law is on the side of the homeowners.

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The report highlights the situation of a couple from Vermont, who fell behind by one mortgage payment in 2009. They took part in the government’s Making Home Affordable loan modification program after encouragement by their bank.

They received a trial modification, which reduced their payments by $600 per month. After communicating with their bank, asking if they had gotten a permanent modification, the bank’s officials just told them to keep making their reduced payments.

But after a few months, they received shocking news — letters from their bank telling them they were in foreclosure and using the difference of the reduced payments against them. Bank officials told them they had to come up with the difference from several months, plus late fees totally $13,000 or risk losing their house. Bank officials told them the couple hadn’t sent in the proper documentation and therefore they were being denied for a permanent modification.

The NBC report found that the loan modification program is a trap because after reducing payments, the bank can deny the permanent modification, demand back payments and send a homeowner into foreclosure in the end.

Out of 1.6 million people who have gotten temporary modifications, only 600,000 received permanent modifications. But the Obama administration counts both groups as being helped by the program. About 15 percent, as of 2010, still ended up in foreclosure.

The banks are great deceivers. They are skilled at trying to get the most they can out of homeowners instead of helping them save their homes. It’s obvious that for banks, they are far more concerned with the bottom line than with the homeowners.

Sadly, Miami Foreclosure Lawyers have seen more and more desperate homeowners sucked into loan modification scams, poorly run government programs and false promises from the banks themselves. People want to save their homes, but without the ability to print money or produce the collateral to take out lavish loans, they can feel hopeless. Sometimes too-good-to-be-true programs come along and people jump at the chance to save their home, which ends up costing them more in the long run. As the couple in the news report experienced, their bank simply wanted to squeeze as much money from them as possible and use pressure from a potential foreclosure as the way to do it.

But an experienced and aggressive Miami Foreclosure Defense Attorney can use the law and the skills obtained over time to help people stay in their homes and avoid foreclosure. Banks have dirty little secrets and exposing them can help homeowners keep their houses.
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Fourteen states now have mediation programs in place, a U.S. Department of Justice report states, but they are rarely used, as banks would prefer to forge ahead with a foreclosure than take the time to work with homeowners, an article published on reports.

Miami Foreclosure Defense Attorneys have seen that mediation programs typically don’t work. In 2009, the Florida Supreme Court ordered that all foreclosure cases in state courts that involve residential homestead property must be sent to mediation, unless there is an agreement between the homeowner and lender. It’s called the Statewide Managed Mediation Program. Under the program, however, the homeowner can opt out, but the lender must pay for the costs of mediation.
The purpose of the program was to ease the burden of the courts by trying to get many of the hundreds of thousands of foreclosure cases (there were 369,000 in December 2008 and 456,000 by the end of 2009, the state’s high court wrote) out of the system. But the program has no mandatory elements, meaning that those who are fighting foreclosure in Miami and throughout Florida may go into mediation and come out with no resolution.

Florida, much like in Maryland, where the story is based, has a program that has done little good. In Maryland as of May 31, only 56 homeowners had gotten a modification of their home loan. Most borrowers complain that lenders would prefer to foreclose on their house than negotiate. One woman’s house was sold in the midst of the mediation process there, the article states.

The article is based in Prince George, Maryland, the country’s richest majority-black city. According to statistics there, after a slow down in the foreclosure process nationwide, more than 7,100 notices of foreclosure were filed in March alone, more than twice as many as had been filed in any month since 2008.

Many experts believe that the slowdown in foreclosures came as banks and lenders were dealing with accusations of “robo-signing” and filing false documents in foreclosure proceedings across the country. Mortgage servicers — companies hired to process documents for the banks — were forging the signatures of bank officials in order to quickly pass through documents to the court, leaving many inaccurate, yet “signed” by a person who should have actually taken the time to verify correct information.

The banks have also dealt with the struggles of MERS — Mortgage Electronic Registration Systems — a system created by lenders in the mid 1990s to more quickly keep track of purchases and sales of homes than county clerks of court. But the shoddy filings have caused problems today, as many banks haven’t been able to properly foreclose on a homeowner’s property because the information wasn’t cataloged correctly into MERS.

Aside from the shoddy practices of banks, the article goes on to highlight the stories of several Maryland homeowners, who have gotten very little help from the banks. They tell of bank representatives who simply use mediation as a “formality” before moving on to foreclosure. Some homeowners have tried desperately to stay in their homes, only to have lenders rebuke those efforts and move on with foreclosure.

The same thing is happening in Miami and throughout South Florida. If you want to fight back against foreclosure, meeting with an experienced Miami Foreclosure Defense Lawyer should be your first step.
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St. Louis Fed Vice President David Wheelock noted in a 2008 article that Miami foreclosure homeowners can learn some lessons from how the country’s forefathers handled such a crisis during the Great Depression.

Miami foreclosure attorneys understand that dealing with a foreclosure on your house, your business or other properties can be stressful, frustrating and depressing. So don’t go about it alone and don’t let the banks win. Consult with a team of attorneys with years of experience with the financial sector and the complex foreclosure process.

The article discusses how the 2008 residential real estate foreclosure rates, which were at the highest levels since the Great Depression, caused policymakers to take action to limit foreclosures. During the Great Depression, lawmakers created new federal agencies to refinance delinquent mortgages, insure and finance newly issued mortgages and expand federal farm credit programs. Many state governments halted foreclosures, limited deficiency judgments and enhanced the rights of borrowers to redeem foreclosed property.

The Home Owners’ Loan Corporation was established in 1933 to refinance $1 million in delinquent mortgages during the Great Depression. The Federal Home Loan Bank System was created to mobilize funds for home lending and Fannie Mae was created to purchase Federal Housing Administration-insured homes.

Similarly, in 2008, the federal government took action. Only this time, so much of the help was aimed at banks, not homeowners. President George W. Bush signed the Housing and Economic Recovery Act, which included, among other things, a $300 billion increase in Federal Housing Administration loan guarantees to encourage lenders to refinance delinquent home mortgages. Also in 2008, Bush signed into law the Emergency Economic Stabilization Act of 2008, which authorized the U.S. Treasury to make capital injections into banks.

But during the Great Depression, foreclosure moratoria went into place in 27 states. Although they can benefit some borrowers and temporarily reduce foreclosures, critics argue they reduce the supply of loans and increase costs for future borrowers, Wheelock wrote.

In reality, few banks have gone to much trouble when it comes to helping homeowners. Those looking to stop foreclosure in Miami should not expect to be treated fairly by their bank or mortgage company. Consulting a real estate defense lawyer in Miami is your best bet for protecting your rights and the financial well-being of you and your family.

In 2009, California put on a temporary freeze on foreclosure filings. And in 2010 as states’ attorney generals investigated shoddy bank paperwork and looked into the possibility of foreclosure stoppages, President Barack Obama said he supported such an action, but not a broad, nationwide foreclosure stoppage. Many banks took action themselves, stopping foreclosure filings because of false documentation and unauthorized signing of documents by servers and law firms. In Florida, many banks still haven’t continued filing foreclosure proceedings at the rate they had in the last few years.

Far from a move to help homeowners, banks are simply covering their behinds and have returned to filing foreclosures as rapidly as possible as soon as they feel the coast is clear.

A good offense is often a good defense and that’s also true in the foreclosure process. Loan modifications and short sales aren’t the only strategies to fighting Florida foreclosures. Banks and financial institutions are dealing with many issues regarding the sloppy processing of foreclosure documents and their use of law firms that used thousands of fake “robo-signers” and forged documents. If you’re in the middle of a foreclosure fight, those errors can be be put to work for you.

Negotiate from Strength.
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Our Miami foreclosure defense lawyers fight each day for the rights of homeowners who have been ignored, pushed aside, frustrated, mistreated or victimized by their bank or mortgage company.

Whether it’s stopping foreclosure in Miami or determining whether strategic default is right for you, banks make matters worse by putting profits before people and by too often acting unethically, if not downright illegally.
As we reported recently on our Miami Foreclosure Lawyer Blog, the Huffington Post recently followed 48 homeowners for a year as they dealt with the agony and made their decisions. Often it was the toughest decision of their lives. As many Miami homeowners deal with the same issues, we urge you to consult an attorney.

These are their stories:

-A 47-year-old homeowner with a struggle mechanics business. Drained his savings staying current on his mortgage. Truck was repossessed when he went to the local vet to have his dog put to sleep. He bought a trailer for his family to live in, unaware he could have remained in his house rent free during foreclosure. He was afraid the bank would move as fast as the company that repossessed his truck.

-A California homeowner felt morally obligated to stay in the $325,000 house, despite seeing a house in the neighborhood on the market for $90,000. After a year spent seeking a modification from their bank, they were informally told by a bank employee to stop paying in order to get the bank to come to the table. The bank then suggested they apply for modification! They did … and were denied.

-Chicago condo owner was rejected for a short sale after losing his job. Also rejected by the Obama Administration’s home loan modification program. He filed for bankruptcy and lived in the unit rent free while paying only the condo association fees.

-A divorcing California resident had a $440,000 residence that dropped to $250,000 in value. Despite having worked as a loan assistant, she found the system impossible to navigate. Now in a $1,500 apartment she has plenty of grocery money and spending money for the little pleasures in life. Her advice to homeowners is to never fear just walking away.

-A 45-year-old Michigan man was struggling with an underwater mortgage but could not get the bank to approve a short sale and was afraid to walk away for fear of ruining his credit score. So far, he has remained in the home.

-A 43-year-old software salesperson from Miami. His $285,000 house was worth $450,000 at the top of the market and is now worth just $150,000. They were able to reduce their payment by $500 a month by refinancing to a 4 percent mortgage.

In some of these cases, homeowners didn’t understand their rights — or that they could remain in their home during the lengthy foreclosure process. In others, knowledge was empowering — not paying your homeowner’s dues can lead to a much faster foreclosure action. In each case, an experienced foreclosure attorney can fight for the rights of homeowners, force banks to treat your fairly, and greatly reduce the stress associated with dealing with a foreclosure, short sale or strategic default.
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As South Florida homeowners continue to struggle, the Obama Administration’s foreclosure prevention program has been hobbled by lax oversight and a propensity to cooperate with banks rather than stand up for property owners, MSNBC reported.

Our Miami foreclosure defense lawyers understand the legal landscape and can assist homeowners in fighting to prevent foreclosure in Miami and throughout South Florida. As we have reported on our Miami Foreclosure Lawyer Blog, recent legal developments give homeowners a real shot at stopping foreclosure, nullifying a deficiency judgment or even successfully arguing for a monetary settlement or the return of their property.
The federal program has resulted in no penalties against banks or mortgage servicers, despite criminal investigation into the conduct of banks in all 50 states. Despite spending a year issuing warnings about such penalties, the Treasury Department recently said it lacks the power to do so. Meanwhile, it has actually loosened program restrictions in the wake of heavy lobbying from the banking industry.

The program was launched in early 2009, saying it would help 3 to 4 million homeowners. Fewer than 800,000 have received lasting mortgage modifications amid widespread complaints that banks have wrongly rejected homeowners, lost paperwork and ignored program rules. In many cases, homeowners were quickly allowed into the program on a “trial basis” but banks failed to make decisions, missed deadlines or inappropriately rejected applicants.

In some cases, payment reductions during trial modifications were then counted as delinquent and foreclosure proceedings were initiated.

Under contracts drawn up by the government, banks were to receive $1,000 for a completed modification and up to $4,000 if the loans continue to perform. Now the government is claiming those same contracts only permit the government to withhold or “claw back” a payment under very narrow circumstances; specifically when a lender incorrectly grants a modification.

To highlight the absurdity: Banks have not done nearly enough to modify home loans and the government’s own contract only permits sanctions for banks that incorrectly grant modifications.

In other words, banks continue to make a mockery of the entire system. You deal with them at your own peril. Consulting an attorney is the best course of action when it comes to fighting for your rights and holding your bank accountable.

Negotiate from Strength.
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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.
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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.
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