Tag: foreclosure defense

July: A Tough Month With Foreclosures For South Florida

Posted on by Emil Fleysher

In July, South Florida was among the regions with the highest foreclosure rates in the Country. Moreover, one in every 421 homes had a foreclosure filing throughout Miami-Dade, Broward, and Palm Beach County. The tri-county came in fifth throughout Florida. Palm Bay-Melbourne was among the top with one in every 404 homes in foreclosure, Orlando was second with one in every 357, but Ocala was first with one in every 296 homes. Unfortunately, Florida was placed at number 1 in July with the highest foreclosures throughout the nation.

RealtyTrac considers repossessions, new lawsuits, and judgments as foreclosure fillings. South Florida decreased 40 percent, when compared to last year’s July, their foreclosure filings with only 5,853. Furthermore, Palm Beach County had an annual decline of 24 percent, Miami-Dade County 44 percent, & Broward County with 49 percent. The highest foreclosure rate from the tri-county area was by Palm Beach County with one foreclosure filing per 352 homes.

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, send an e-mail to emil@fleysherlaw.com, or complete the contact form below.

Bank of America in $10 Billion Foreclosure Settlement With Fannie Mae

Posted on by Emil Fleysher

As part of Bank of America’s continued effort to settle with Fannie Mae, the bank has announced approximately $11.6 billion dollars worth of settlements. Also, a $1.8 billion dollar sale for the collection rights to home loans. Bank of America is paying $3.6 billion to Fannie Mae; to buy back $6.75 billion in bad loans that the bank had mistakenly sold to the government.

This deal will successfully clear up all claims filed against Bank of America by the government-owned company. These and other purchases will result in only a small fourth-quarter profit for BofA in 2012. That is despite most of the settlement money being covered by their reserves. A separate settlement between Bank of America and Fannie Mae requires the payment of $1.3 billion to Fannie Mae. The payment is over foreclosure delays. The bank also sold the rights to collect payments on about $306 billion of loans to Nationstar Mortgage Holdings and Walter Investment Management.

If you have questions about foreclosure, loan modification, bankruptcy, 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.

Bank of America / Countrywide HUSTLE Investors & Borrowers

Posted on by Emil Fleysher

In 2008, Bank of America purchased Countrywide and inherited its mortgage program called the “hustle”. This lawsuit claims that Bank of America continued to operate the hustle. It consisted of rubber-stamping risky home loans. And, then selling them to government-controlled Fannie Mae and Freddie Mac, throughout 2009 despite the program’s poor performance.

In fact, Bank of America purchasing Countrywide, inheriting its program, and continuing to operate the hustle reminds us of one other lawsuit.

This new lawsuit is very similar to another recently filed; Bank of America settled for one billion dollars in an attempt to make right their past behavior of making poor loans and concealing the defect rates of loans that they sold to Fannie Mae and Freddie Mac. The two firms are also continuing to push banks to repurchase billions of dollars in bad mortgage loans. These lawsuits filed by the Justice Department and the Federal Housing Finance Agency against Bank of America and 17 other large banks in the past year are intended to send a message that the reckless lending practices of the past will not be tolerated.

If you have questions about foreclosure, loan modification, bankruptcy; 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.

Options for Florida Homeowners with Homes that are “Underwater”

Posted on by Emil Fleysher

What are your Options if your House is Underwater? More and more Floridians are coming to the unsettling realization that their homes are now worth less than they owe on their mortgage(s). This unfortunate scenario is commonly referred to as your house being “underwater.”
One of the most common questions that clients ask is “What are my options if my house is underwater?” Generally, the answer is that you have 6 options and their descriptions are below.

I. Continue Paying

If you can afford the payments and are more comfortable paying an over-priced loan than walking away from it, you may decide to keep paying.

  1. Pros – The pros of continuing to pay on the loan as it stands include
    1. protection of your credit score
    2. predictability of future payments
    3. household stability
  2. Cons – The cons of continuing to pay on the loan as it stands are
    1. substantially inflated housing payments
    2. compromised standard of living due to high cost of housing
    3. little or no chance of building equity in under 20 years

II. Deed in Lieu of Foreclosure

If you want nothing more to do with the property and are ready to “walk away,” then offering the bank a Deed in Lieu of Foreclosure (“Deed in Lieu”) may be the choice for you. A Deed in Lieu describes a situation in which the borrower agrees to vacate the property. And, abandon any claim or rights to the property. Banks like this option because it saves them the expenses and delays associated with judicial foreclosure. In return, most banks are willing to waive any deficiency claims that may result after the subsequent sale.

  1. Pros – The pros of offering the bank a Deed in Lieu include…
    1. An instant solution to the problem, allowing you to move on right away and start rebuilding your credit
    2. Potential waiver of any deficiency judgment
  2. Cons – The cons of offering the bank a Deed in Lieu include…
    1. It will have nearly the same effect on your credit score as a foreclosure. However, you will save your credit score from the damage that having successive late mortgage payments would cause.
    2. There are tax implications when any debt is forgiven. This results in a cancellation of debt that the IRS considers to be taxable income. However, exceptions to this rule include Insolvency (your total secured debts were higher than the Fair Market Value of your assets at the time of foreclosure sale). And, Bankruptcy (filing for Ch. 7 Bankruptcy would discharge this liability).
    3. A Deed in Lieu is only possible if there are no junior liens on the property (i.e., home equity loans or 2nd mortgages)

III. Short Sale

A short sale is a type of pre-sale in which the bank agrees to let you sell the property for less than the full amount owed. And, to accept the proceeds of the sale as full satisfaction of the debt.

  1. Pros – The pros of Short Selling the property include…
    1. Potential waiver of any deficiency judgment
    2. Slightly less negative impact on the your credit score
  2. Cons – The cons of Short Selling the property include …
    1. There are tax implications when any debt is forgiven. This results in a cancellation of debt that the IRS considers to be taxable income. However, exceptions to this rule include Insolvency (your total secured debts were higher than the Fair Market Value of your assets at the time of foreclosure sale); Bankruptcy (filing for Ch. 7 Bankruptcy would discharge this liability); and the Mortgage Debt Relief Forgiveness Act which has been recently extended through December 31, 2013.
    2. While a Short Sale may be slightly better for your credit than a full foreclosure, it still has a substantial negative impact. However, for those unable or unwilling to file for Bankruptcy, a Short Sale may be the best option in avoiding facing a deficiency judgment later on.

IV. Loan Modification

The intent of a modification is to eliminate the arrearage and reduce monthly mortgage payments for homeowners who have recovered from financial distress but whose net income has been reduced to a level lower than it was before the default, such that they can no longer afford the original loan.

  1. Pros – The pros of modifying your loan include…
    1. You can stay in the home at a payment that is affordable based on the income information you provided to the bank to get the modification.
    2. No dramatic negative impact to your credit score
  2. Cons – The cons of modifying your loan include if you:
    1. Suffer a reduction in income you will no longer be able to afford the payments and will have to start the process over.
    2. Are “upside down” on your mortgage after the modification, you will still be paying substantially inflated housing payments
    3. Are “upside down” on your mortgage after the modification, you may still be compromising your standard of living due to high cost of housing
    4. And, if you are “upside down” on your mortgage after the modification, you may still have little or no chance of building equity in less than 20 years.

V. Litigation / Foreclosure Defense

If none of the above choices are acceptable to you, then you may be interested in pursuing a Foreclosure Defense strategy. In short, a foreclosure defense strategy affords you the opportunity to stop making payments on the mortgage, property tax, and property insurance while an attorney defends your legal rights against the foreclosure action.

  1. Pros – The pros of pursuing a foreclosure defense strategy include…
    1. The opportunity to save your monthly housing expenses for an indefinite period of time. This money can be later used for moving expenses, housing, or as a down payment on a subsequent home purchase.
    2. This option gives you the most time to get your affairs in order and to plan for your next step.
  2. Cons – The cons of pursuing a foreclosure defense strategy include…
    1. You will eventually lose the house unless the bank agrees to allow resumption of payments or full payment of the loan is tendered (this is also referred to as “redemption”).
    2. You will have the dramatic negative impact of a foreclosure on your credit score.
    3. The servicer may pursue a deficiency judgment for the difference between the amount of the mortgage loan and the foreclosure sale price.
    4. If the bank waives the deficiency, there may be tax implications. This results in a cancellation of debt that is considered by the IRS to be taxable income. However, exceptions to this rule include Insolvency (your total secured debts were higher than the Fair Market Value of your assets at the time of foreclosure sale) and Bankruptcy (filing for Ch. 7 Bankruptcy would discharge this liability).

VI. Bankruptcy

Filing a Chapter 13 Bankruptcy may enable you to “strip off” any fully unsecured liens on your property. If your home is worth less than what you owe on your first mortgage, then any subsequent mortgages are fully unsecured in that there is no equity in the property above the first mortgage to secure them. In this scenario, a Chapter 13 bankruptcy may enable you to discharge the debts associated with the subsequent mortgages as well as strip off the liens completely. At the end of your successful Chapter 13 payment plan, you keep the house with only the first mortgage.

  1. Pros – The pros of pursuing a Chapter 13 Bankruptcy strategy include…
    1. Discharge and strip of any 2nd mortgages or Home Equity Lines of Credit
    2. Discharge of most unsecured debt (including credit cards, medical bills, etc.)
    3. Once the Chapter 13 plan is confirmed, all creditors must abide by the terms and honor the outcome.
  2. Cons – The cons of pursuing a Chapter 13 Bankruptcy strategy include…
    1. Filing Bankruptcy will negatively impact your credit score
    2. The Chapter 13 plan will last 3 or 5 years and you only get your discharge if and when the plan is completed.
    3. Bankruptcy may not be the best option for everyone at every time and an attorney should always be consulted with prior to making a decision as to whether or not to file.

If you have questions about foreclosure, loan modification, bankruptcy; 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.

What is a “Final Judgment” and why should I care?

Posted on by Emil Fleysher

A final judgment is the Judge’s final decision in a case as recorded in the files stored in the Office of the Clerk of Courts. The name for the party that sued you and obtained the judgment is “judgment creditor.”
The judgment creditor can obtain the right to proceed against your property through a writ of execution, garnishment, or other judicial processes. A judgment becomes a lien when a certified copy of it is recorded in the official county records. The lien may attach to any non-exempt real property in the county where it is recorded. The recorded judgment also report as a negative history on your credit report. This blemish can make it difficult or impossible to obtain loans or financing. The judgment lien is good for up to 20 years and can stay on your credit report for that long.

Answering Questions

As soon as the creditor has obtained a Final Judgment, it may require you to answer a series of questions. Maybe in person or otherwise. They must be answered under oath, seeking to identify and locate your assets against which the creditor will enforce its Final Judgment. If you fail to respond to these questions in time, you may be held in contempt of court. Moreover, a Writ of Bodily Attachment may be issued. A Writ of Bodily Attachment is a writ commanding law enforcement to physically bring in a person in contempt of court. Evidently, you cannot get out of this writ just by paying the fine. The court can hold you up to 48 hours to meet with the person issuing the writ directly.

Once the creditor has the judgment lien and knows where your assets are, it can seek a Writ of Execution. The writ of execution tells the sheriff to seize your property to satisfy the judgment. If your only asset is your paycheck, the creditor can go after that with a Writ of Garnishment. A Writ of Garnishment may enable the creditor to levy against your paycheck or bank account.

In Florida, you have a certain property that may be exempt from garnishment. Furthermore, most judgments and their resulting garnishments can be discharged in Bankruptcy. For more information, please contact a qualified attorney to discuss your options.

If you have questions about foreclosure, loan modification, bankruptcy; or other alternatives, please feel free to call my office at 954-484-9987. Or, send an e-mail to emil@fleysherlaw.com, or complete the contact form below.

South Florida Bankruptcy Filings Continue to Fall

Posted on by Emil Fleysher

South Florida bankruptcy filings were down substantially in the 2nd quarter, compared to last year; according to data released by the U.S. Bankruptcy Court for the Southern District of Florida. Personal bankruptcy filings (Chapter 7 & Chapter 13) in Palm Beach, Broward, and Miami-Dade counties totaled 7,194. This is from April through June of 2012; down 23% from 2011.

Bankruptcy filings can be linked in large part to the rate of foreclosure filings. And, foreclosure sales, both of which slowed in 2011. This is due to the banks’ robo-signing debacle and nationwide settlement with states’ attorneys general. While foreclosure filings have begun to pick up steam again, many homeowners are avoiding bankruptcy. They are doing this by obtaining loan modifications or participating in the short sale process.

Bankruptcies increased in 2007 and 2008 following the collapse of the housing market. But, they are now starting to taper off with the demand for housing in South Florida starting to make a come-back and the willingness of servicers to participate in the loan modification process improving.

A struggling homeowner tends to file for bankruptcy just before the bank is scheduled to repossess a property. The bankruptcy filing temporarily halts the foreclosure action and buys the borrower more time to negotiate with the lender. When the value of a property is less than what’s owed, the lender can go back to court after the foreclosure. Moreover, they can hold the homeowner responsible for the difference. Bankruptcies wipe out these so-called deficiency judgments. A bankruptcy also may discharge a second mortgage.

If you have questions about foreclosure, loan modification, bankruptcy; or other alternatives, please feel free to call my office at 954-484-9987. Or, send an e-mail to emil@fleysherlaw.com, or complete the contact form below.

Florida Grabs a Chunk of Foreclosure Settlement Money for State Budget

Posted on by Emil Fleysher

Out of $334 million in cash payments sent to Florida in a multibillion-dollar mortgage settlement with major banks, more than $33 million will help strengthen the state’s budget. In fact, Florida is one of several states taking a portion of the $2.5 billion in cash payments from banks. And, Florida is using it for programs not directly related to the foreclosure crisis. So, Florida’s total take in the $25 billion national settlement is worth about $8.4 billion.

About $334 million of that came in the form of a cash payment to the state. Furthermore, the attorney general’s office has maintained that most of the money will go to directly to help home­owners. Moreover, settlement documents indicate that Bondi negotiated the 10 percent civil penalty; resulting in a $33.4 million cash payment to the general fund. For now, Florida is only using 10 percent of the cash payment to strengthen its general budget. However, some other states are using all or a majority of their funds to plug large budget holes. A few states have clauses similar to Florida’s, directing 10 percent of the money to general revenue as a penalty.

$300 Million to Go

Still, some states have decided to use all of the funds for homeowners. In fact, they are citing that they were the main victims in the robo-signing scandal. The remaining $300 million in Florida’s settlement cash has not yet been allocated. Bondi asked members of the public for suggestions on how to spend the money this month. Moreover, he has stated that it would be used to provide direct relief help for homeowners. Housing groups have advocated for the money to be used for legal aid for homeowners and low-income housing programs.

If you have questions about foreclosure, loan modification, bankruptcy; or other alternatives, please feel free to call my office at 954-484-9987. Or, send an e-mail to emil@fleysherlaw.com, or complete the contact form below.

Lenders Prefer Short Sales to Foreclosures

Posted on by Emil Fleysher

Short sales are exceeding the number of foreclosure sales in South Florida. Broward County had 1,831 short sales in the first three months of 2012, compared with 1,476 foreclosure deals. On a quarterly basis, this is the first time short sales have outnumbered foreclosures in Broward since early 2008. Short sales also exceeded foreclosures in Palm Beach County and across Florida from January through March.

Banks are more motivated to do short sales because of the messiness and the risk of foreclosures. After a homeowner defaults on a mortgage, the bank files a foreclosure lawsuit. But, the two sides often continue to negotiate a resolution. A short sale is when the lender allows the homeowner to sell for less than what’s owed on the mortgage and absolves the homeowner from paying a deficiency. Foreclosures can be lengthy. It takes an average of 861 days to complete a foreclosure in Florida. This is one of the longest timelines in the nation. There’s a backlog of cases in Florida courts because in 2010 some bank employees admitted they had signed off on thousands of cases without proper review. As a result, some major lenders temporarily suspended foreclosures.

Time Frame of Short Sales

A short sale in Florida takes an average of 603 days. Although, many now are happening much faster sometimes within a few months. They are helping the housing market recover. That is because they more quickly put distressed homes in the hands of cash buyers or owners who can afford the mortgages. The number of Broward short sales in the first quarter of 2012 increased 30 percent from the same period a year ago. Statewide, short sales rose 18 percent from a year ago. Some of the biggest lenders, including Bank of America and Chase, now offer thousands of dollars to homeowners to complete them.

If you have questions about foreclosure, loan modification, bankruptcy, or other alternatives, please feel free to call my office at 954-484-9987, send an e-mail to emil@fleysherlaw.com, or complete the contact form below.

Voluntary Dismissals and Foreclosure Paperwork Irregularities Examined

Posted on by Emil Fleysher

The Florida Supreme Court got a request. It has to do with the prevention of lenders from escaping sanctions for using fraudulent documents by filing voluntary dismissals. The issue is whether courts have the authority to reject the voluntary dismissals of the cases. And, instead impose sanctions, including dismissing the foreclosures with prejudice. Attorneys asking for dismissal with prejudice argue. They state that the current system allows every party who comes before the courts to lie, cheat, or steal; knowing if they are caught they can simply voluntarily dismiss and clear themselves of that fraud.

The banks argue that when a party has not been harmed then that party cannot seek to undo a voluntary dismissal. Moreover, they agree that sanctions are justified if a submission to the court is improper. To deter improper conduct, courts have many punishments. Lawyers and parties already face a variety of sanctions if they use fraudulent documents.

If you have questions about foreclosure, loan modification, bankruptcy; or other alternatives, please feel free to call my office at 954-484-9987. Or, send an e-mail to emil@fleysherlaw.com, or complete the contact form below.

This ruling could have a major effect on the state’s backlog of foreclosure cases as well as future lending practices. A change of this scale would impact general credit and lending practices. Also, the backlog of foreclosure cases in the court system. The threat of sanctions would force lenders to continue litigating unstable cases, rather than cure defects in a new proceeding.

Forced Placed Homeowners Insurance Policies

Posted on by Emil Fleysher

If you think your homeowners insurance is too expensive, then you would be interested to hear Mark Kunzelmann’s story. Mr. Kunzelmann is a 49-year-old network specialist. Just over a year ago, he let the policy on his four-bedroom, North Palm Beach home expire.

But you would not believe what the oversight, which was later remedied, cost him, approximately $10,000 for a few months’ worths of coverage. If your home is financed then you must have homeowners insurance that protects the lender’s interest in the property. If for some reason you let the policy lapse, then your bank can obtain a force-placed insurance policy. And, they can pass on the charges to you. In Mr. Kunzelmann’s case, his lender, Wells Fargo got a policy that was way above his budget.

The policy that was acquired cost him nearly $18000.00 dollars a year. And, Wells Fargo got an 11 percent commission from Assurant. Turns out many lenders have relationships with insurance companies. So, when homeowners allow their policy to lapse they will turn to that entity for a policy. Needless to say but “It left a very bad taste in my mouth,” Kunzelmann said. “I told them, ‘If you do this to me, I’m going to sue you and take my business elsewhere.’ ” Kunzelmann has followed through on his threats. He recently refinanced his mortgage with another lender. And, he has filed a federal lawsuit in order to recoup not just his loss, but the loss of the thousands of fellow Wells Fargo customers who suffered a similar fate.

If you have questions about foreclosure, loan modification, bankruptcy, or other alternatives, please feel free to call my office at 954-484-9987, send an e-mail to emil@fleysherlaw.com, or complete the contact form below.