Infographic: Foreclosure, Mortgage Lenders, and Minorities
Posted By Larry Tolchinsky on May 9, 2013
Florida House Passes “Foreclosure Reform” Bill HB 87: Travesty of Justice for Florida Home Owners and Florida Borrowers – Here’s Why
Posted By Larry Tolchinsky on May 7, 2013
The proposed “foreclosure reform” legislation that failed last year, got revamped, and was proposed again this year to be made into new Florida law has been a big concern for foreclosure defense attorneys and advocates for Florida home owners.
We’ve been monitoring House Bill 87 as it has been making its way through the Florida Legislature (read our prior posts here) and now, sadly, the House of Representatives has approved HB 87 and it is now setting on Governor Rick Scott’s desk, awaiting his signature to become the law of this state.
| Read the final text of HB 87 here. |
This New Foreclosure Reform Law Creates Lots of Problems for Lots of People
As we have been pointing out — along with lots of other people including Florida Senator Darren Soto and the group Jurists Engaged in Title Integrity – this new legislation doesn’t help as much as it hurts lots of people, in lots of ways. If Governor Scott does not veto this bill, it will become the law of the State of Florida and it will then be up to Florida home owners courageous enough to take this fight to the appellate courts to try and return justice to the Florida Home Owner.
What injustice is here? There are many bad things in HB87 from a Florida home owner’s viewpoint, here are some things to consider:
1. Florida Land Titles Are In a Mess
For instance, there’s the question of land titles. With this new law, future buyers of Florida real estate are going to have a big problem on their hands because Florida real estate titles are simply a huge mess.
Insiders know this: testimony given before the Florida House Subcommittee considering the passage of this very bill by none other than a representative of the Florida Title Insurance Industry explained to the lawmakers that there has been so much fraud in Florida foreclosures that title insurance companies cannot figure out what land title files have fraud tainting them and which are clean. From his testimony:
“You should not buy a foreclosed property, knowing how much fraud was out there. … We cannot determine what files are infected with fraud, I wish we could, but we cannot, so you should not purchase foreclosed property.”
Banks know that real estate titles in the State of Florida are not trustworthy these days if the property has been touched in any way by a foreclosure. And that’s a lot of property records, isn’t it, given the record breaking number of foreclosures this state has experienced over the past few years?
By passing HB87, the Florida Legislature has done nothing to help clear up the Florida Title Mess and in fact, has contributed to this problem. Helping banks to foreclose means that banks and mortgage lenders wrongfully foreclosing on homes get to do so faster. Then, the future homeowner who purchases that real estate gets an incomplete title to property and a big headache down the road.
2. HB87 Blocks Victims From Getting Their Homes Back After Wrongful Foreclosures
Another big problem with the passage of HB87: the home owner who has been wrongfully foreclosed upon — who has lost their family home to a bank who has improperly foreclosed upon that family — cannot get their home back. The new law has included within it a “finality of foreclosure” provision.
HB 87′s language includes a section that protects banks by stating that if a lender forecloses on a Florida home, and later it’s shown by foreclosure defense arguments in court that the foreclosure was done illegally (fraud, mistake, etc.), then the bank is protected by the new “finality of foreclosure” law which means that the homeowner’s remedies do not include getting that home back.
Here is the provision as it appears in the final version of HB87, the language blocking a borrower the right to get his home back is in bold:
702.036 Finality of mortgage foreclosure judgment.—
162 (1)(a) In any action or proceeding in which a party seeks to set aside, invalidate, or challenge the validity of a final judgment of foreclosure of a mortgage or to establish or reestablish a lien or encumbrance on the property in abrogation of the final judgment of foreclosure of a mortgage, the court shall treat such request solely as a claim for monetary damages and may not grant relief that adversely affects the quality or character of the title to the property, if: [ conditions omitted] ….
(b) This subsection does not limit the right to pursue any other relief to which a person may be entitled, including, but not limited to, compensatory damages, punitive damages, statutory damages, consequential damages, injunctive relief, or fees and costs, which does not adversely affect the ownership of the title to the property as vested in the unaffiliated purchaser for value.
Once the bank forecloses, wrongfully or not, that home owner cannot get the family home back even if the evidence shows that the bank has foreclosed wrongfully on that property. Did the bank mix up which condo to foreclose upon? Too bad, the wronged condo owner doesn’t get their condo back. Did the bank never own the mortgage, and therefore had no legal right to file a foreclosure lawsuit? Too bad: the home owner cannot get their home back.
Right now, it’s not clear if Governor Rick Scott will sign this bill into law. If he does, then the Florida courts will be where justice is found — until then, this bad legislation will be the law of the land here in Florida and lots of Floridians are going to be hurt by this thing.
Do you have questions or comments? Then please feel free to Chat with Larry in the comments below, at info@hallandalelaw.com, or (954) 458-8655. If you have a specific or personal situation, please call or email Larry because he can’t answer specific fact questions in general comments.
“I’m happy to take your call.”
Infographic: Troubled Asset Relief Program (TARP) As of March 2012 Per Congressional Budget Office
Posted By Larry Tolchinsky on May 2, 2013
HAMP Trial Period Plan Lawsuits: Borrowers Sue Banks for Failing to Do the Right Thing in TPP Loan Modification as Lenders Fail To Follow HAMP Requirements
Posted By Larry Tolchinsky on April 30, 2013
Florida homeowners, and borrowers across the country, are no longer considering HAMP (Home Affordable Modification Program) to be the big success that it was touted to be by the Treasury Department when it debuted back in 2009. HAMP, as you may recall, was a part of the MakingHomeAffordable program which describes itself as:
The Making Home Affordable Program (MHA) ® is a critical part of the Obama Administration’s broad strategy to help homeowners avoid foreclosure, stabilize the country’s housing market, and improve the nation’s economy.
What Has Happened to HAMP?
We’ve been monitoring the reality of banks failing to live up to their responsibilities under this federal program as more and more homeowners began filing lawsuits against lenders and suing banks for not accepting Home Loan Modifications under HAMP, specifically for lenders failing to accept a trial plan into a permanent home loan modification.
However, things seem to be getting more and more serious not just in Florida but in the entire United States. This week, a new report was released by the Special Inspector General for TARP (Troubled Asset Relief Program) to Congress which found that HAMP is failing. (Read the report here.) For one thing, the Special Report shows that home loans that were modified under HAMP in the second half of 2009 are defaulting in shocking percentages: 46% of the HAMP modifications in the third quarter of 2009 are now in default. This, of course, gives lenders an excuse to point the finger at HAMP for being a bad idea.
However, there’s more to this story. Much more.
And that story can be found in lawsuit after lawsuit, claim after claim, filed by individual homeowners all over this country against their banks for failing to do the right thing in a HAMP loan modification.
All too often, the homeowner has worked with their lender to establish a trial period plan (TPP) – a modification of the original mortgage that the bank agrees is acceptable. The borrower then makes payments pursuant to that trial plan. Everything looks hunky dory.
Then, the borrower gets sideswiped by the bank as the lender rejects the mortgage modification as a final deal. Often, the bank does this without following HAMP’s official guidelines — and sometimes, without the lender apparently even being aware of them.
HAMP TPP Actions Proceed In Federal Court Against Many Mortgage Lenders
Right now, so many borrowers have sued banks for this sort of thing that many of these lawsuits have been collected from all around the country and pulled together in big lawsuits (class actions) pending before a single federal district judge. Among the banks who are defendants in these HAMP TPP cases are Wells Fargo Bank, Litton Loan Servicing, Citimortgage, and J.P. Morgan Chase Bank.
However, many of these lawsuits have been filed against Bank of America based on bad HAMP actions by the lender. Again, each lender is different and the claims against Bank of America do not include claims based upon not respecting HAMP loan modifications by other banks, such as Wells Fargo or OneWest Bank (see our earlier post). These cases have their own nickname now: they’re known in legal circles as “HAMP TPP Cases.” Different banks have different HAMP TPP claims against them.
The Big HAMP TPP Case Against Bank of America
Right now, cases against Bank of America for evildoing in HAMP TPP Plan finalization of loan modifications have been consolidated before Massachusetts Judge Rya Zobel and the borrowers had an early victory against Bank of America as it moved to dismiss everything – some cases were dismissed, but many remained (see Schedule A to the 2011 Amended Complaint for a list of the cases remaining).
Right now, the parties are doing discovery (gathering facts, interviewing witnesses, taking depositions, etc.) and there is nothing set before the court until August 2013.
For details regarding the bad things that borrowers are alleging in federal court has happened to them in HAMP TPP deals with Bank of America, you can read the entire Complaint that has been filed on their behalf in the public record. There, you will find true horror stories that include American citizens paying monthly mortgage payments under the Trial Period Plan, as well as paying additional monies to the bank, only to find that foreclosure proceedings were still moving forward against them by the Bank’s lawyers.
In other words, in case after case, the Bank winked and took the TPP payments and never halted their foreclosure proceedings.
Fighting For Right in HAMP TPP Situations
Once again, we have to reiterate that this is the Wild Wild West in Florida Real Estate and Florida homeowners and borrowers need to think twice before negotiating with banks or mortgage lenders without having an experienced Florida foreclosure defense lawyer at their side.
Real estate attorneys who deal with HAMP Trial Period Plans, HAMP TPP Claims, and mortgage loan modifications generally usually have lots of knowledge that is very helpful to the individual borrower: not just about Florida law, but also about the individual bank and even about the bank representatives doing the actual deals. This kind of savvy is great to have on your side at a negotiation table.
There’s lots of shady stuff that has been going on for years now — and will likely continue for the next few years. HAMP modifications were a good idea, and lenders need to respect borrowers and the intent of this federal program.
Do you have questions or comments? Then please feel free to Chat with Larry in the comments below, at info@hallandalelaw.com, or (954) 458-8655. If you have a specific or personal situation, please call or email Larry because he can’t answer specific fact questions in general comments.
“I’m happy to take your call.”
What is Happening With Foreclosures in South Florida Real Estate Right Now? We’re Still in a Big Mess – Consider These Reports
Posted By Larry Tolchinsky on April 23, 2013
How is the Florida foreclosure market doing right now? Some are reporting optimistic viewpoints – we’re out of the woods, they claim: everything is getting better every day.
Meanwhile, for those working with Florida home owners and Florida borrowers in the current South Florida real estate market, it’s not that rosy. Here’s why:
Proposed Legislation to Help Banks Not Borrowers with Home Foreclosures Moving Forward in Tallahassee
Things are cooking on the Florida Legislature Stovetop and those proposed bills to change current Florida Foreclosure law to let foreclosures happen faster are still bubbling away in their pots. This isn’t good news for Florida homeowners defending themselves against foreclosure by Florida banks; however, it’s nice to hear for lenders and those concerned about backlogs in the court system. Consider this:
1. House Bill (HB87) is moving forward “favorably” through the Committee process. As of yesterday afternoon, it had been added to the Second Reading Calendar and has made its way through the Civil Justice Committee, the Justice Appropriations Committee, and the Judiciary Committee to its current spot before the Appropriations Committee.
2. Senate Bill (SB 1666) likely is getting favorable consideration as it just got approved in a vote count of 6 yeas to 2 nays before the Florida Senate’s Judiciary Committee. It’s now before the Appropriations Committee.
Neither of these proposed new laws recognize the time that is needed by foreclosure defenses to mount a proper defense against lender-plaintiffs who all too often have screwy paperwork if not outright fraudulent documentation. Furthermore, where are the tools to punish wrongdoing in these matters? Not in these bills. Not even a hand-slap on banks who have done bad things.
For details on these two pieces of legislation, read our earlier post “Florida Legislature Annual Session Begins Today: Proposed Laws That Impact South Florida Home Owners In a Big Way Are on the Table.”
South Florida Continues to Lead the Nation in Foreclosures – a Growing Inventory of Homes on Bank Books
Out of the entire United States, not only does Florida lead the nation in foreclosure rates in 2013, according to studies performed by those in the know like the economists at RealtyTrac, but South Florida – and in particular, Miami – leads the Sunshine State in the number of homes foreclosed upon by lenders. We’re Number One, and not in a good way.
- Around ten days ago, the Miami Herald reported on this current economic reality in a story that not only highlighted the RealtyTrac numbers but discounted the impact of the elephant in the room, that big Shadow Inventory of homes setting on bank books right now.
- Meanwhile, there cannot be a foreclosure without the title to that property going somewhere: and as foreclosure numbers make records, that means that Shadow Inventory numbers are breaking records, too. These lenders are holding lots of property — and that property comes with duties like insurance and taxes and upkeep.
- In fact, the Palm Beach Post reports that there has been an 86% jump in the Miami Shadow Inventory from the first quarter of 2012 to the first quarter of 2013, with the State of Florida overall having an increase almost as big (82%). That’s a lot of homes.
How will that Shadow Inventory impact the Florida economy? As we’ve reported earlier, there are experts opining that it’s going to hold Florida’s economic recovery down until 2015 if not later.
Employment Rates Impact Housing Recovery Says Fannie Mae Ecomonist
The economy is a mishmash of lots of different things working together and the housing market in Florida doesn’t operate independently of other economic conditions. No news to those of us here, monitoring our personal budgets and planning for our kids’ college and our own retirement, right?
So it’s not news but it’s a good point to remember when Richard Koss, the director of mortgage market analysis at Fannie Mae is quoted from a speech he gave in Texas this week to a conference of bankers (mortgage servicers), that the number of people employed or underemployed directly influences the housing economy of South Florida.
- There needs to be people ready and willing and able to buy homes and to get mortgages. People need good and steady jobs to do this. Lenders need proof of the buyer’s ability to repay the mortgage before they can offer the home loan. Buyers need to have money each month to pay the mortgage and the insurance and the taxes.
- Right now, unemployment numbers are bad for the country. Reuters is reporting that March 2013 was the worst hiring month out of the past nine months.
- According to the Department of Labor, the national unemployment rate fell to 7.6% in March 2013. This, reports USA Today, is because almost half a million Americans (496,000) gave up trying to find a job. Bottom line, in March 2013, the number of working Americans was the lowest percentage in over 30 years (since 1979).
Larry Tolchinsky’s Tip: South Florida is hurting and will be hurting for the foreseeable future, that’s the reality. For Florida borrowers considering a short sale, or Florida home owners facing foreclosure, it’s important to understand the battlefield before entering into negotiations with their mortgage lender, or pricing their home for a quick sale to avoid foreclosure by the bank. It’s tough times and home owners need to be savvy more than ever before when making financial decisions about their real estate.
Do you have questions or comments? Then please feel free to Chat with Larry in the comments below, at info@hallandalelaw.com, or (954) 458-8655. If you have a specific or personal situation, please call or email Larry because he can’t answer specific fact questions in general comments.
“I’m happy to take your call.”
