Category: Foreclosure

Now that the tidal wave of foreclosure diminishes, legislators and judges are adjusting the law. They are doing this to determine who will respond to pay past due balances, most of which are condominium fees. The Florida safe harbor provision puts a cap on unpaid condo assessments that are owned by “the first mortgagee or its successor or assigns” who pick up title during the foreclosure process. They are liable for 1 percent of the original mortgage or 12 months of fees, whichever is the lesser amount.

Finding Gray Areas for Unpaid Assessments

As anticipated, there have been pursuits to find the gray areas in the definitions; to the advantage of lenders and condo associations. Both are set back financially by foreclosure and the longer it takes them the bigger the loss. An attempt at one of those gray areas worked in a trial. But, not in the December 5^th Fifth District Court of Appeal. The Court stated that the “first mortgagee” mentioned in the safe harbor law means first in priority. It does not mean who is first in line, as the trial court wrongly deduced.

Although Beltway was not the direct assignee to the original lender but the assignee of an assignee, they still won the safe harbor. And, they were only responsible to pay 12 months’ worth of past dues or 1 percent of the mortgage. The amount paid added up to $30,000 which isn’t an overly large amount but it had a serious impact. The dispute between the lenders and associations can get very expensive if they litigate the issues. This is why lenders may simply pay off the association so they can get the property back on the market quickly.

The Safe Harbor Law

The Safe harbor law is more beneficial for the lending industry than it is for the condo associations. Lenders convinced the Legislature that if they didn’t have priority over association liens then lending would be in jeopardy. Before the condo statutes were amended to add safe harbor, many of the older associations had to govern documents that failed to address the liability or assessments post-bank foreclosure. Or, they had provisions that would entirely extinguish the liability for assessments incurred before a bank received title through foreclosure.

Because condos had a strong argument about the amount of money they were losing, the compromise became 12 months’ of unpaid assessments. Or, 1 percent of the original mortgage. However, during the foreclosure tidal wave that hit the nation, a lot of associations found themselves “upside down”. This is because of the amount of time it took banks to foreclose on properties. Most associations had such a large number of properties under foreclosure that they had to pass special assessments just to keep afloat.

The safe harbor rule changed. Moreover, it became effective July 1^st to assist assertive associations who filed for foreclosure before the banks did. The banks tried to argue that if the associations foreclose first, they cannot collect the past-due fees. An amendment was provided to give clarity to this matter. It stated that even if the association forecloses on the property first, the bank that follows still has to pay the 12 months or 1 percent.

If you have questions about Foreclosure, Loan Modification, Bankruptcy, Short Sale, or other alternatives, please feel free to call my office at 888-886-0020. Or, send an e-mail to emil@fleysherlaw.com, or complete the contact form below.

An advisory committee to the Florida Supreme Court informed the Palm Beach Circuit chief judge that an administrative order that throws out certain motions in foreclosure cases as “abandoned” is a local rule. According to Florida Rules of Judicial Administration, a local rule is a rule of “practice or procedure” for trial court application only; because local conditions require it. It provides an omission or facilitates an application of a statewide rule, but does not conflict. The Supreme Court authorizes local rules, not circuit chief judges.

The Palm Beach Administrative Order

The Palm Beach administrative order was challenged by a foreclosure defense attorney in Palm Beach County. Also, it has a similar counterpart in the Miami-Dade Circuit; it has only been challenged through individual cases to the Third District Court of Appeal. Thomas Hall represented him before the Supreme Court Local Rules Advisory Committee by Thomas Hall. He is a former clerk to the state Supreme Court and now an attorney with The Mills Firm in Tallahassee. “This opinion by the Local Rules Advisory Committee goes directly to the Florida Supreme Court, and the Supreme Court reviews the challenge and makes its own determination. But the committee exists to advise the Supreme Court about this sort of thing,” Hall said.

Foreclosure defense attorneys and law firms representing the plaintiff mortgage lenders wacthed closely these abandonment rules. “There are other groups, certainly legal aid organizations, watching it because they are providing defense in a lot of foreclosure cases,” Hall said. The administrative order, issued by Chief Judge Jeffrey Colbath in April, states motions in foreclosure cases that have not been set for a hearing within 10 days of filing. And, have not been heard within 90 days of filing, are to be deemed abandoned.

Judges Choosing Sides

Ice argued the order exceeds the authority of an administrative rule since such rules are restricted to housekeeping chores. Further, the rule puts judges in the position of choosing sides. This is because defendants, more often than not, are the parties filing motions to protect their interests. Plaintiff banks tend to be content to leave a case dormant. This is until it is in their economic interest to move to a foreclosure trial. First District Court of Appeal Chief Judge Robert T. Benton II, committee chair, summarized Colbath’s defense of the administrative order in the committee opinion Benton issued Tuesday.

Considering Order in Isolation

The Palm Beach chief judge claimed considering the order in isolation is for the best. And, that it does not create a new procedure or rule. But, he states that it “amounts to nothing more than authorization for case management by a trial judge.”
Colbath told the committee that since the order applies to both sides it does not unfairly target homeowners. He said it was not a local rule because it does not apply to all proceedings, only to foreclosures. And, it does not apply to all parties or attorneys. It applies only to those who fail to set motions in a timely fashion in foreclosure court.

“Finally, the chief judge emphasizes that a judicial determination of abandonment is not the same as denial of a motion or a ruling that a motion has been waived. The chief judge maintains that a party whose motion is deemed abandoned is not precluded from re-filing the motion,” Benton said. Even though the order only applies to foreclosure cases, Benton said it applies to all foreclosure cases. He also states that “its scope, impact, and seriousness militate in favor of review by the Supreme Court, in the opinion of the committee.”

Appropriate for Housekeeping Chores

Administrative orders, Benton continued, are appropriate for “housekeeping chores”; such as creating specialized divisions, assigning judges to particular divisions or court deputies to a particular judge. But Colbath’s order should be viewed as a local rule. That is because it pertains directly to practice and procedure in the circuit, “even though it is not clear that the problem it addresses is specific to the Fifteenth Circuit.”
Benton said the committee stands ready to address the merits of the dispute as the Supreme Court may direct.

Petition in the Fourth District

Fourth District passes In addition to challenging the order before the committee, the Palm Beach County foreclosure defense attorney sought review by the Fourth District. But on Oct. 30, the Fourth District denied the petition. The attorney said that the Fourth District passed. This is because it said his petition for review “is without prejudice to the aggrieved party.”
He explained, “We didn’t wait for any actual rulings on any individual cases. If you are someone who lost their right, lost a motion because it was being abandoned, you can still appeal that. The court said we’re not going to strike it down in one fell swoop.”

The Ruling

He was concerned in May when he first challenged the order; if he were to wait until a judge made an abandonment ruling, that delay could later be interpreted as a timely error. “With the Oct. 30 ruling, we got the green light, in terms of the court clarifying, ‘No, you can appeal later,’” stated the attorney. Now that the committee has spoken, he said it should carry great weight with the Supreme Court; given the fact that the vote was unanimous.

Of the eight judges on the committee, six voted with the Palm Beach County foreclosure defense attorney’s position. The other two were absent. Amy S. Borman, general counsel for the Palm Beach Circuit, said that because the advisory committee’s work is an active matter, the circuit cannot comment. She added, however, that the Fourth District’s Oct. 30 decision also had the effect of lifting the stay on Colbath’s foreclosure division orders.

If you have questions about Foreclosure, Loan Modification, Bankruptcy, Short Sale, or other alternatives, please feel free to call my office at 888-886-0020. Or, send an e-mail to emil@fleysherlaw.com, or complete the contact form below.

Florida leads the states with the largest number of REOs, bank repossessions, in October 2014 according to RealtyTrac. Maryland, however, has taken the lead in the highest foreclose rates of the nation. Banks in Florida repossessed 4,905 properties. This is 2,000 less than that in California. Ohio came in third with 2,057, Illinois with 1,620, Maryland with 1,602. And, four more states with more than 1,000 REOs in October. Although The Sunshine State leads with the highest number of REOs in October, it has declined 13 percent from the previous month (5,628). And, an overall of 31 percent from October 2013 (7,310).

Florida’s REOs

RealtyTrac’s data also shows that there has been a decrease in overall foreclosure activity in Florida from month to month; dropping by 2.19 percent and a 24.9 percent fall compared year to year. After 12 consecutive months leading the country with the highest foreclosure rate, October has finally put an end to Florida’s reign. .25 percent of homes in Maryland, that 1 in every 400 homes, were in foreclosure. Florida had .23 percent (1:444) of its homes throughout the state in foreclosure.

20,236 foreclosure filings were done in Florida for the month of October. California had nearly 6,000 fewer foreclosure filings (14,994) than Florida even though it has around five million more housing units. New York totals at about 8.1 million residential housing units which land it in third place. RealtyTrac reports that Florida has the four metropolitan areas that have the topmost foreclosure rates. Miami is in first place with 1:363 homes in foreclosure. Miami is followed by Orlando with 1 in every 394, Tampa third with 1 in every 395 homes going through foreclosure, and lastly Jacksonville at 1:433. However, each area did see a decline in foreclosure activity since October of 2013. Jacksonville had a 37 percent drop, Miami decreased by 27 percent, Tampa’s foreclosures dropped by 23 percent, and Orlando had a 13 percent decline.

If you have questions about Foreclosure, Loan Modification, Bankruptcy, Short Sale, or other alternatives, please feel free to call my office at 888-886-0020. Or, send an e-mail to emil@fleysherlaw.com, or complete the contact form below.

A new report states that although the number of abandoned foreclosed homes has been decreasing locally, Florida continues to surpass the rest of the country with the number of zombie homes. By the end of the third quarter, the commonly named ˝zombie” homes in Palm Beach County are up to 2,749; which is around 35 perfect down from last year, stated RealtyTrac Firm. Broward County was down 19 percent from last year at 3,437 abandoned homes. Even with the reduction, Broward is the third highest in the nation of zombie foreclosures. Although, Miami-Dade County tops it with 3,683. And, leading the nation at 3,982 is Cook County, IL. Palm Beach County wasn’t too far behind rating in fifth throughout the country.

Florida is Number One when it comes to Zombie Homes

In fact, out of the 50 states, Florida was number one with 35,913 owner-vacated properties that are waiting for reclamation; nearly tripling New York’s 12,683 abandoned homes. In South Florida, foreclosure filings have been reducing significantly. However, the courts are still dealing with the overwhelming amount of cases during the market crash. Typically, the foreclosure process for a regular home is over 2 years, 951 days to be exact, in Florida. Zombie foreclosure affects the Real Estate market. This is because nobody is taking care of the home. Also, buyers who are starving for options are not having an option to buy it. Plus, it’s lowering the value of all homes in the neighborhood. And, the lenders haven’t taken ownership of the property.

Contact Us

If you have questions about Foreclosure, Loan Modification, Bankruptcy, Short Sale, or other alternatives, please feel free to call my office at 888-886-0020. Or, send an e-mail to emil@fleysherlaw.com, or complete the contact form below.

The First District Court of Appeal has thrown out the evidence presented in three foreclosure cases. They did this due to the lenders’ witnesses being unqualified to testify.

In two of the cases, the court stated that the lawsuits should get dismissal in favor of the homeowners. The banks have 30 days to file a motion for rehearing or the decisions will become active throughout the state. It has been common for banks to bring one witness with inadequate knowledge of the origin. Or, the accuracy of mortgage records they provided. This is normally due to the number of servicing transfers; from the time of the funding of the loan to the time of trial.

2008 Housing Market Crash Was Just The Beginning

In fact, Florida courts had a tsunami of foreclosures filings after the housing market crashed in 2008. In the interim, defense attorneys argued that the plaintiffs were bypassing the evidentiary rules. They were doing this by providing counterfeit documents to prove their standing. This led to the robo-signing scandal that was challenged in 2010; creating a mandate for servicers and lenders to suspend filing new foreclosure cases.

Foreclosure Cases

In 2013 the Fourth District Court ruled in the favor of Connie Yang, the owner. They did this because her homeowner’s association failed to provide solid evidence in the accounting ledger they submitted. However, when defense attorneys tried to use this as an example against the banks, judges ruled that this case only applied to associations. It did not apply to banks.

In Tallahassee, Judge Nikki Ann Clark of the First District ruled against Bank of New York Mellon. The reason is that the evidence submitted to prove the amount owed by the defendants, Lloyd & Teresa Burdeshaw, was inadmissible hearsay. The bank’s witness was unsuccessful in authenticating the records provided by the bank. And, they failed to qualify as a person with a proficient intellect of the four aspects needed for business records exception. In addition to the case being dismissed for lack of foundation, it was later discovered that the case should have been dismissed years prior; because of a motion to dismiss for inactivity that was filed in 2010.

In another case, Kiefert v. NationStar Mortgage, the Court reversed the foreclosure judgment. This is because the bank’s witness was only able to establish that its predecessor was in possession of the note when the filing of the complaint took place. Not that that the note had been endorsed at the time the complaint was filed.

Finally, in Lacombe v. Deutsche Bank, the Court ruled in favor of the defendant. They cited that the witness that the bank brought was simply “incoherent”.

Is There a Double Standard with Foreclosure Cases?

These cases were dismissed; refusing to remand any of them as the bank had plenty of time to present proper evidence. Many foreclosure defense attorneys feel that there is a double standard when it comes to foreclosure trials and the witnesses the bank provides. Many go as far as stating that the banks are feeding the witnesses with hearsay. This is so that they may mimic this language in court. But, this could not happen in, for example, a medical malpractice trial.

So, if these opinions stand, the banks will have to present evidence at trial. Just like in any other civil case. Hopefully, the threat of mass dismissals and the expense and loss associated with that prospect will incentivize banks to work with borrowers in modifying delinquent mortgage loans.

If you have questions about Foreclosure, Loan Modification, Bankruptcy, Short Sale, or other alternatives, please feel free to call my office at 888-886-0020. Or, send an e-mail to emil@fleysherlaw.com, or complete the contact form below.

Palm Beach County has a small increase in new foreclosure cases in September; however, they were still lower than in September of last year. This is all according to the Clerk & Comptroller’s latest statistics in Palm Beach County. In September, 484 new foreclosure cases were filed. 480 cases were filed in August providing a 0.83 percent increase. But, there was an 11.5 percent decrease in comparison from the 547 new cases that were filed in September 2013.

September to September Data

From September of last year to September of this year, recorded deeds increased. However, the number of mortgages and deeds from August to September of this year decreased. In August there were 6,083 deeds recorded. And, in September 2014 5,804 deeds were recorded which was a 4.6 percent decrease; however it was a 3.4 percent increase from September of last year which only recorded 5,614 deeds. During September 2013 there were 3,379 mortgages recorded. In September 2014, there were only 3,036 mortgages recorded giving us a 10.2 percent decrease; however, in August there were 3,204 mortgages recorded, which is a 5.2 percent decrease from August to September.

According to Grant Street Group, the developers of ClerkAuction, 782 properties were sold in September at auction. And, the plaintiff who is usually the bank or mortgage company purchased 631 of those. Third parties purchased the remaining 151. 1,268 properties were scheduled for foreclosure sale but 486 of those were canceled in September. The cancellation rate was the same as it was in August at 38.3 percent. From motions to judgments to certificates of title the Clerk & Comptroller’s office facilitates all documents that are foreclosure-related.

If you have questions about Foreclosure, Loan Modification, Bankruptcy, Short Sale, or other alternatives, please feel free to call my office at 888-886-0020. Or, send an e-mail to emil@fleysherlaw.com, or complete the contact form below.