Articles Posted in South Florida Foreclosure

It’s been more than eight years now since the economic crash of 2008. Now, the big mortgage lenders – the same entities that played a huge role in that crisis, the same companies that received sizable bailouts under the Emergency Economic Stabilization Act – are getting into the rental industry. It may surprise no one to learn these companies are awful landlords. In fact, as a new report by Bloomberg News shows, the companies are driving up the cost of that rent with the goal of evicting people from those homes.house

The Bloomberg report looks closely at a company called HavenBrook Homes, which is controlled by one of the largest money managers on the planet, Pacific Investment Management Co. Bloomberg noted that a study by the Atlanta Federal Reserve showed that in a single county in Georgia, this and other large institutional investors were twice as likely to file for eviction against renters as owners of smaller operations.

Essentially, these big investment, private equity and hedge funds that snapped up a huge portion of the properties left vacant across the country after the 2008 foreclosure crisis have been turning these sites into occupied rentals. They have altered the landscape of an industry that was historically dominated by mom-and-pop owners. With the sole goal of maximizing profits, the conversations about collections that used to take place on the front stoop between landlord and owner are now being funneled into international call centers. Good luck catching a break there. Continue reading

Ocwen Financial holds the keys to some 17,500 defaulted home mortgage loans – and can’t continue to foreclose on a single one. stop

That is true at least for the time being, after the National Mortgage Settlement monitor announced the company is barred from foreclosure action after falling short of the required performance metrics.

The monitor announced the mortgage servicer failed on a key metric that requires the mortgage servicer to send a loan modification denial notification to the borrower. This notice needs to denote why the modification was denied, as well as the facts that weighed into this ruling by the servicer. It also must indicate a timeline in which the defaulted homeowner can offer evidence the decision was a mistake.

The National Mortgage Settlement office first announced the company wasn’t in compliance with this metric back in October. However, it’s now been seven months, and the company still hasn’t remedied the problem. That led the office to bring all of Ocwen’s foreclosures to a screeching halt.  Continue reading

Some 6 million Americans were stripped of their homes during the housing crisis and subsequent economic recession. It was soon apparent that the underlying cause of the crisis were unethical and fraudulent practices by some of the biggest banks in the world. frontdoor

The federal government through its U.S. Department of Justice vowed to make these big banks pay dearly for the harm caused to homeowners and taxpayers. And ultimately, federal prosecutors did finagle some large settlements from six of the biggest banks, which allowed those firms to resolve criminal allegations. None of the top-level banking executives served time in prison.

In all, there were more than 30 mortgage-related settlements reached and more than $110 billion collected by the DOJ, federal housing agencies and state Attorneys General. But there has been very little accounting of where that money went. Presumably, it was to go to taxpayers. Specifically, it was supposed to go in large part to those who had lost their homes or suffered other serious financial woes after the fallout.

Some of the money was used for that purpose. But as a recent investigation revealed, much of it was not. In fact, one of the biggest benefactors of that money? The federal government. Continue reading

Much has been written about the lack of accountability of the U.S. banking system – particularly of high-ranking individuals – for the central role played in the economic crisis of 2008. Headlines like “Too Big to Jail” have been splashed on various covers, while these corporation leaders, after receiving massive public bailouts, were able to essentially pay their way out of prison.prison

Meanwhile in Iceland, criminal bankers are having a tougher time.

In two separate Icelandic Supreme Court and Reykjavik District Court rulings, the top five bankers from Kaupping and Landsbankinn (the two biggest banks in that nation) were found guilty of embezzlement, breach of fiduciary duties and market manipulation. Those convicted will serve between two-to-five years in prison. All combined, these individuals will serve 74 years in prison. The maximum penalty for such crimes is six years, though there is a pending case in the Supreme Court to determine whether that sentence should be lengthened. Continue reading

A growing number of renters in South Florida report they have endured great expense and frustration as a result of receiving little-to-no notice that they must vacate their rental after it’s been resold through foreclosure. The Miami Herald recently reported families have been uprooted multiple times, some given no more than 24 hours notice that they must vacate.sad2

Miami foreclosure defense lawyer Bruce Jacobs, as an authority on real estate litigation and landlord-tenant law in South Florida, was asked to weigh in.

The best thing tenants can do, Jacobs said, is to become educated about their own situation, become involved in the legal process and have contingency plans.

“Rather than just putting your heads in the sand and waiting for the sheriff to show up – that’s the worst situation to be in,” Jacobs said. Continue reading

When April 15 rolls around this year, JPMorgan Chase – and numerous other banks that agreed to billion-dollar settlements as redress for illegal foreclosure practices – will be able to write off that debt to the Internal Revenue Service.
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Homeowners who received that relief? Not so lucky.

Our Miami foreclosure defense lawyers understand that while Chase will receive forgiveness from the government, many families who just scraped by being able to hang onto their homes – even those who may have lost them – will have to treat those relief dollars as taxable income.
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While countless, everyday Americans continue to struggle with impending foreclosure in South Florida, one bank is again facing allegations of wrong doing at the highest level.

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As our South Florida foreclosure defense attorneys understand it, Bank of America is being accused of preventing homeowners from obtaining lowered mortgage payments from a federal program, even though it was reaping the financial rewards of participation.

The allegations were reported by the media earlier this month, when a whistleblower complaint was unsealed in federal court. The complaint is part of the $1 billion settlement reached between the New York U.S. Attorney’s Office and Bank of America in February. Specifically, the settlement has to do with allegations that the bank violated the federal False Claims Act, which is outlined in 31 U.S.C. 3729. This act essentially allows the government to collect punitive and compensatory damages for anyone who files a false or fraudulent claim to the government – as the banks have become notorious for doing.

All of this too comes after another settlement for $25 billion that was reached between five major banks and attorneys general from 49 states, addressing widespread mortgage fraud over the last several years.

What this newest revelation essentially comes down to is this: That the bank actively worked to defraud the Federal Housing Administration by exaggerating appraisals and inflating claims that involved the Home Affordable Modification Program (HAMP). The whistleblower said he was working closely with bank executives when they reportedly set out to intentionally stop countless homeowners from receiving HAMP benefits, which would have significantly lowered their mortgage payments and likely allowed scores to remain in their homes.

The complaint alleges that as a matter of routine practice, agents for the bank would act as if it had lost important documents, they would fail to mark payments that had been made and they would intentionally mislead homeowners about whether they qualified for the program. They let only enough people into the program to avoid garnering the suspicion of the federal government. That way, they could continue to collect government rewards for their participation in HAMP.

It’s cliche to say the bank was having its cake and eating it too – but that’s exactly what was happening.

This is unsurprising to our Miami foreclosure defense attorneys, who know that banks are capable of almost anything, especially if it’s in their own interest – regardless of whether it’s legal or going to have a negative impact on those who are struggling.

The whole scenario illustrates why it is so crucial for people who are considering a Miami foreclosure to contact a skilled attorney who is familiar with the banks’ tactics, and can help you avoid some of the common pitfalls that have ensnared so many others.
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With nearly half of all Miami homeowners underwater on their mortgages, it’s no wonder Floridians remain among the most skeptical of a recent $25 billion settlement between the banks and U.S. government.

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The goal of the settlement was to help address some of the most egregious abuses by banks, and particularly those that led to the housing burst that has so many struggling with a foreclosure in Miami. As we have written about previously in our Miami foreclosure blog, the settlement is supposed to ease the burden on some of the hardest-hit Americans, as well as serve as a penalty for banks whose greed knew no depths, ultimately resulting in a global recession.

Miami foreclosure attorneys have already labeled this settlement a “sweetheart deal,” which is of little benefit to consumers. Now, we have discovered there is even more reason to be suspicious.

According to Reporter David Reilly of The Wall Street Journal, the actual details of the settlement have so far been held up from public release, with banking and government officials saying the deal should be filed in court within the next several weeks.

Government officials came out strong in their announcement of the deal a few weeks ago. They played up the fact that attorneys general from 49 states had signed off on the deal. They heralded the fact that mortgage rates will be reduced for about 1 million homeowners, who scramble to make monthly payments that are more than the home is worth. They even touted the fact that about 750,000 heads of households that were improperly foreclosed on will receive a $2,000 restitution payment.

Never mind that the latter won’t cover the cost of first month’s rent and security deposit for a homeowner who was forced to downsize.

Never mind that having your mortgage reduced now isn’t going to suddenly spring these people from the debt they have been accruing for years, while bankers lined their fat pockets.

And never mind that while $25 billion may seem like a decent chunk of change, it is little more than a drop in the bucket to these banks, meaning there is little incentive for them to halt the practices that led to these massive issues in the first place.

Now, the government and the banks are dragging their feet on releasing an actual copy of the deal. As Reilly put it: “The devil will be very much in the deal’s details.”

We’ll give them this: It is a very complex situation that involves a great many parties. But without the ability to pore through the actual documents, neither taxpayers nor investors are going to have a real handle on what the banks received or what the various government agencies doled out, in return for this $25 billion.

According to Reilly, one of the most crucial aspects of the deal will be to what extent the banks are going to be able to skirt any future litigation resulting from these mountains of abuses. Officials may have talked up the fact that this deal will prevent any future abuses, we don’t know how firm those promises are unless we can see the exact terms of the settlement.

Make no mistake about it, struggling homeowners are still best served by turning to a Miami foreclosure defense attorney for help.
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An audit of several hundred foreclosures in Northern California uncovered a host of legal and ethical violations, mirroring the situation with foreclosures in Miami and across the country.

homeandheart.jpgOur Miami foreclosure defense attorneys know how difficult it can be to trudge through the foreclosure process. Many people, not wanting to lose their homes or damage their credit, continue to pay on homes they’ll likely never be able to afford and are ultimately going to lose. Their money, essentially, is wasted.

It is even more infuriating when information like this emerges, showing that the banks, who aren’t playing by the rules, continue to profit from the housing crisis that has plagued homeowners across the country, and particularly in South Florida, since 2008.

Financial experts believe that many homeowners may be considering a strategic default as they have incurred big loans, have little equity and are “upside down” on their mortgages. It appears they would rather walk away than wait for the real estate market to turn around in a decade or longer.

Fighting a foreclosure in Miami is one way to stop the banks from taking your home away. But many others are considering a strategic default in Miami as a way to fight back.
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Strategic default means the homeowner simply mails the keys to the bank and walks away from the loan. Typically the reason for this is the mortgage is under water, meaning the homeowner owes more than what the house is worth. What has become a reality more recently for homeowners is that the real estate market in Miami won’t be turning around for years or decades.

However, considering one of these exit strategies does have consequences. And a deficiency judgment in Miami is one of them. As Miami foreclosure defense lawyers have seen, banks have become more aggressive when it comes to deficiency judgments.

That is when the bank comes after the borrower for the difference between what is owed on the mortgage and what the house is sold for at auction. Given how much prices have dropped, banks have gotten more and more aggressive in pursuing borrowers who walk away.

According to a Washington Post article, experts believe that those with jumbo mortgages may be the next in line to default, as banks are anticipating that happening. Those with big mortgages, good credit scores, but little equity fit the criteria.

Moody’s, the ratings agency, recently put out a study that found homeowners with jumbo mortgages are now at a “greater strategic default risk” than any other type of borrower. Because many are stuck with persistent negative equity, they are likely to walk away rather than be stuck in a market hit by real estate deflation.

FICO, the credit score agency, estimates that 30 percent of all defaults are strategic. Considering there are 12 million or more mortgages underwater, people simply stopping making payments even though they can afford them is a “growing problem.”

While people likely understand what’s going on in their local real estate market, the article opines that many may not know the consequences — including triple digit credit score hits, which can make getting another loan difficult for several years. But a deficiency judgment is typically the bigger issue at hand.

Especially in markets with larger fluctuation in prices in the last five years, of which Miami is at the top of the list, a deficiency judgment can be crippling. If a person took out a loan for $450,000 for a house that is now worth $250,000 and the family walked away and is now renting, how could they be expected to pay back $200,000?

That is something that requires legal counsel to help you understand the risks and prepare a strategy for fending off the banks when they start calling and sending threatening letters and e-mails. If you are considering strategic default in Miami, consult with an experienced foreclosure defense lawyer first.
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