Miami Real Estate Attorney Blog

Hugo V. Alvarez will be a speaking at a Foreclosure Clinic sponsored by the Florida Bar's Consumer Protection Law Committee, in conjunction with the Legal Aid of Palm Beach County. The clinic is scheduled to take place on June 24th from 6pm to 8pm at the Boca Raton Community Center.

Mr. Alvarez will be speaking on alternatives to foreclosure, and specifically discussing (a) options to retain one's home, while avoiding foreclosure, and (b) options to dispose of one's home, and avoid foreclosure.

Options to Retain Your Home

1. Payment or Repayment Plan - the quickest method of avoiding foreclosure is to come up with the necessary money to bring the delinquent loan current. In some instances, banks are willing to provide the delinquent borrower with a repayment plan in an effort to bring the mortgage current. This will typically involve an agreed upon time frame in which to make the regular payments, plus a little extra, to repay in the delinquent amount in full over time.

2. Refinance - in the event that you actually have equity in your home today, you may be in a position to refinance your mortgage. Refinancing your mortgage may actually provide you with a lower interest rate, and a lower monthly payment. If you do not qualify for a government-sponsored loan modification, you may also be eligible for a government-sponsored re-financing plan (HARP - Home Affordable Refinance Program).

3. Forbearance - some banks may offer you a forbearance plan. This option typically provides for a temporary reduction or a suspension of monthly payments for a specified length of time, and with an agreement that the amount that was forgiven will be paid back at a later date.

4. Loan Modification - a loan modification is a permanent change in one or more of the terms of the mortgage. It also allows the mortgage to be reinstated, and results in a payment that the borrower can afford. This can include anything from a reduction in interest, adding years to the mortgage (from say a 30 year mortgage to a 40 year mortgage), reduction in the principal amount owed, or any combination of the aforementioned. It should be noted that many financial institutions are provided with financial incentives from the government to modify loans. Additionally, the current loan modification program is not designed to save every home, but only geared toward saving the homes of individuals that can still afford to be in that home.

Continue reading "Saving Your Home: Alternatives to Avoid Foreclosure" »

Real Estate experts are anticipating that home sales will slow for the second half of the year. This is due in large part to the expiration of the $8,000 tax credit, for first time home buyers, that expired on April 30. However, those that signed purchase contracts prior to April 30th can still take advantage of that tax credit if they complete their transaction by June 30th.

Additionally, other factors will likely continue to contribute to the ongoing sluggish recovery in the housing market. For instance, the economic recovery that is currently taking place is largely a jobless one. In fact, since 2007, when the recession began, South Florida's workforce has only recovered to about 90% of where it was before the recession began. Since South Florida's economy was so dependent on the housing market, it will likely take some time for South Florida's economy to recover given the ongoing real estate crisis that is impacting all of us on a daily basis here in South Florida.

Additionally, another potential problem for our local economy, an economy that is still very dependent on real estate development, is that many lenders are increasingly reluctant to make new construction loans to developers. Now that certain tax credits have expired, coupled with the increasingly sluggish real estate market, builders see stormy days ahead. Indeed, increasingly high unemployment rates, coupled with stringent mortgage lending guidelines, are keeping many prospective purchasers on the sidelines.

All of these factors contribute to the general consensus that our real estate market will continue to struggle to stand on its own without the assistance of government backed programs, like the tax credit for first time home buyers, or a sharp turnaround in the economy as a whole.

In South Florida, with the storm season under way, a natural catastrophe could tip the ongoing real estate crisis into further disarray. If high unemployment rates, and rapidly declining real estate values were not enough, then a strong hurricane directly hitting South Florida and causing extensive damage will only serve to worsen the ongoing real estate crisis here in South Florida.

Continue reading "Real Estate Market Losing Steam as Hurricane Season Approaches" »

Florida remains number three (3) in the country for number of foreclosure filings, according to national statistics reflecting foreclosure filing in May. Nevada and Arizona were the only states that had more foreclosure filings than Florida in the month of May.

In May, one in every 174 Florida properties were in danger of falling into a foreclosure. The May foreclosure rate was actually higher than the foreclosure rate in the month of April. In April, one in every 182 Florida properties were in danger of falling into foreclosure.

However, it should be noted that in South Florida saw fewer foreclosure this past May as compared with May of last year. But the worst is far from over regarding the foreclosure crises, especially for those with adjustable rate mortgages. Now, and as will be discussed below, the recent disaster in the Gulf of Mexico, and massive oil spill, may impact future foreclosure filings as well.

On the other hand, while May saw less foreclosure filings this year as compared to last May, it still brought a spike in foreclosure filings as compared to April of this year. Put differently, there were more foreclosure filings in May than in April of this year. Overall, there were 7,700 foreclosure filings with one in every 127 properties receiving a foreclosure notice in South Florida.

The ongoing foreclosure crisis in South Florida may be further fueled by the oil from the Gulf of Mexico, especially if that oil makes its way onto South Florida's beaches in a hurricane storm surge, or other natural catastrophe. If that were to happen, many homeowners would be faced with the difficult prospect of having to sell depressed property in a region that is beset by natural catastrophe.

Continue reading "Will the BP Oil Spill Cause Florida to Surpass Nevada and Arizona in Foreclosure Filings?" »

More evidence has come to light of Countrywide's fraud and misconduct during the height of the real estate boom. Federal charges were brought against Bank of America, who acquired Countrywide nearly two years ago, alleging fraud, insider trading, and a host of other unethical activities.

In an effort to address the federal charges, Bank of America agreed to pay $108 million to settle the various federal charges brought against Countrywide. The settlement was announced by the Federal Trade Commission, and the settlement is intended to refund money to approximately 200,000 borrowers. This is the largest mortgage industry settlement for the Federal Trade Commission and its history.

The Federal Trade Commission's chairman, Jon Leibowitz, accused Countrywide of "callous conduct, which took advantage of consumers already at the end of their financial rope." Countrywide's unethical practices included requiring borrowers who were already late on their mortgage payments to pay additional fees of several thousand dollars at a time. In other words, Countrywide collected several thousands of dollars from many borrowers on the brink of foreclosure, and economic collapse.

Not only did Countrywide profit from making extremely risky loans during the height of the real estate boom, but they also attempted to cash in during the down time by taking advantage of the same individuals that they had lured into taking risky mortgages just a few years before they fell behind. So Countrywide profited by making risky loans, and then again by securing additional payment from borrowers who were overburdened by those loans.

Indeed, Countrywide was doing very little to prevent many foreclosures in large part because of the fees that they were securing from individuals on the brink of foreclosure. In short, it became more profitable for Countrywide to allow certain individuals to actually fall into foreclosure rather than help the struggling borrowers save their home. Often times, these default fees of several thousand dollars were significant barriers to loan modifications.

Continue reading "Fraud at Countrywide Found Leading to the Foreclosure Crises in Miami and Beyond " »

Our firm has a proven track record in the area of deposit recovery. While we are currently aggressively representing the interests of many purchasers at ICON Brickell, and other Florida projects, recover their deposits, we previously spearheaded many of the defenses that the developers are currently using against purchasers.

In December, a Federal Judge dealt extensively with the issue of whether Florida law, specifically Florida Stat. § 718.202 mandated the establishment of two separate escrow accounts when the purchaser's deposit amount is greater than 10% of the condo's purchase price. In a very lengthy opinion, the federal judge emphatically answered "yes." And the developer's failure to establish the two appropriate escrow accounts mandated by Florida Stat. § 718.202 rendered the purchase contract revocable. Accordingly, the purchaser would be able to seek the return of the deposit.

In the aftermath of that ruling, many developer friendly lobbyists ran to Tallahassee for purposes of passing legislation in an effort to minimize the exposure to developers as a result of that significant ruling. On June 1st, the governor signed into law a piece of legislation that negates the Federal Judge's prior ruling concerning a developers use of certain escrow monies, and accounts.

This recent development, however, should not deter any purchaser from seeking the return of their deposit if they are of the belief that the developer did not honor their contractual and statutory obligations.

Continue reading "Deposit Recovery at Icon Brickell and Other Florida Condo Projects Impacted By New Florida Law" »

The worst of the real estate meltdown is far from over. While the economy is showing tenuous signs of recovery, unemployment rates remain at staggering highs. With this backdrop, millions of homes will likely go to foreclosure this year, and more so this year, than in years past, as many risky adjustable rate mortgages written in 2005 are about to be reset, and yet others explore "strategic defaults." If you are currently facing foreclosure, or need additional information regarding your home mortgage, please contact our office today.

As we previously reported, there are multiple factors that typically drive foreclosures. Those factors include the overall economy, unemployment, and a host of other reasons. However, two new factors will likely fuel additional foreclosure filings for the rest of the year, and beyond.

First, many adjustable-rate mortgages will be reset during the course of the next few months. Many prospective home purchasers agreed to exotic mortgages in an effort to purchase homes that they likely would not have been to afford otherwise. In an effort to purchase that dream home, many home purchasers agreed to financing deals that provided for low monthly payments for a few years. But after that, the mortgage would readjust with a higher interest rate. And now, we are starting to see the next wave of adjustable mortgages reset which is about to further complicate the ongoing foreclosure crises we are experiencing here in South Florida.

Second, not only will unemployment and adjustable mortgage resets drive-up foreclosure filings here in South Florida, but many more people may opt to push forward with a foreclosure by way of a "strategic default." As we previously explained, a strategic default is when a homeowner voluntarily decides to stop paying their mortgage because their home is worth less than their mortgage. In other words, the home is "under water" and the borrower believes that a strategic default may yield a better deal for them by requiring the bank to address the borrower's concerns by way of a foreclosure.

The next chapter in the foreclosure crisis here in Miami, and beyond, will not only impact lower income borrowers who typically purchased mortgages they could not afford, often at the advice of pushy, and sometimes fraudulent, banks and brokers. But what we will soon start seeing, and what our firm has already begun to handle with much success in Miami, and beyond, is foreclosures starting to mount for borrowers who have prime mortgages that are solidly middle-class, upper middle-class and even the rich and famous.

Continue reading "Mortgage Crises Continues For Those With Adjustable Rate Mortgages in Miami and Beyond" »

Miami-Dade County's official estimate of taxable values released to local taxing authorities show a general decline in both residential and commercial real property values in Miami-Dade County for the third straight year.

The decline for the third straight year stems from multiple factors fueling the collapse of real estate values throughout South Florida. Additionally, South Florida continues to struggle with an economic downturn that has cost many their jobs and sent real estate prices spiraling downward.

According to Miami-Dade County's Property Appraiser, the 2010 estimate of Miami-Dade County's taxable value is $192,484,000,000. That figure represents a sharp 13.4% decline as compared with the 2009 figure of $222,141,817,140. Moreover, the new construction taxable value in Miami-Dade County is estimated at $2,626,000,000. And that figure is also a significant decline from the $8,379,000,000 of the previous year.

These drops in real estate value are the steepest since the once roaring real estate market collapsed a few years ago. This figures will also form the basis of Miami-Dade County's budget, and the budgets of all local municipal budgets in Miami-Dade County. Therefore, there can be no doubt that this will be yet another difficult year for government budgets throughout South Florida, and we will likely see more critical cuts to services as well as major fee increases.

Although there is evidence to suggest that the real estate market has "bottomed out", it still won't help the many local governments in need of tax revenue to run their cities. Worse yet, the sharp declines in real estate values here in Miami-Dade County will only continue to worsen until the foreclosure crises has fully run its course.

Hialeah Mayor Julio Robaina said the county's projection -- a 19 percent decline in his city's taxable property value -- was more than he expected, but not a shock. ``It should be no surprise to any of us,'' he said.

Continue reading "Foreclosures Fuel Decrease of Property Values for the 3rd Straight Year in Miami-Dade County" »