Hugo V. Alvarez – Page 22 – Miami Real Estate Attorney Blog

The Lebron James Signing – the Stimulus Needed to Curtail Foreclosures in Miami

Lebron James could be the stimulus many South Florida home owners, real estate professionals, hotels, restaurants, and other local establishments, have been waiting for to hopefully get out of the economic doldrums. Our firm is very bullish about Lebron James’s impact on our local economy given the likely yearly prospects of having the Miami Heat competing and winning championships for the next 5 to 7 years. And that will keep Miami in the national spotlight for years to come.

Our firm’s very own Francis Suarez, the current commissioner for the City of Miami, was on hand to personally give Lebron James the key to the City of Miami during the Miami Heat’s exciting welcome party held at the American Airlines Arena in front of thousands of local fans and broadcast live on national TV.

Aside from the obvious impact on the hardwood, what impact will the Lebron James signing have on Miami? If nothing else, the Miami Heat will earn an extra $10 million a year in playoff revenue. But what about the real estate market and other segments of our local economy?

Miami is an event town, and very dependent on tourism. The signing of Lebron James plays to both of Miami’s economic strengths. It will further fuel a desire for many to come to Miami.

Many will be lured to Miami after watching Lebron James play on TV and noticing the swaying beautiful palm trees on a warm brisk January day while they sit at home snowed in from yet another nasty winter storm. Others will be lured by the active night life on South Beach, and the chance of running into a celebrity, or two, at such notable celebrity hotspots like Prime 112. All of this will only fuel an increased desire to come to Miami.

But will this increased desire to be in Miami be enough to curtail the ongoing foreclosure crises in South Florida? While some are already reporting the positive impact the Lebron James’s signing has had on local real estate prices, his signing alone probably won’t do much to curtail the current foreclosure crises. But if the economy starts to improve, banks start to unload their growing inventory of REO properties at a faster pace, and companies to start to hire again, then the foreclosure crises may come to a halt. And who knows, the Lebron James signing may serve as the catalyst to push the local economy in the right direction.
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It becomes important to consult with an experienced foreclosure defense attorney to understand your rights. We have been successful in defending many foreclosure cases when given an opportunity to develop a plan to properly defend the foreclosure.

If you are on the brink of foreclosure, and need to assess your legal rights, please contact our office today.

Surge in Miami Foreclosure Activity

Florida’s foreclosure rate remains the third highest in the country. But in terms of foreclosure filings, Florida had the second highest rate in the country. During the first six months of the year, there were 277,073 foreclosure filings in Florida. That is a 9% decrease from the prior 6 months, but a 3% increase for the first 6 months of 2009.

Locally, Miami-Dade County had 38,395 foreclosure filings. That amounts to 1 in 26 residences being placed in foreclosure. Miami-Dade County had an 11.5% increase of foreclosure filings in the first 6 months of this year as compared with the first 6 months of 2010.

In Broward County, there were just under 38,000 foreclosure filings, amounting to 1 in 21 homes in foreclosure. Broward County also experienced a 4% increase of foreclosure filings in the first 6 months of this year as compared with the first 6 months of 2010.

In Palm Beach County, there were 18,083 foreclosure filings, or 1 in 35 homes in foreclosure. Palm Beach County also experienced a 26% increase of foreclosure filings in the first 6 months of this year as compared with the first 6 months of 2010.

Banks also moved aggressively to repossess property in South Florida during the first 6 months of the year. During that time, banks took back an average of 4,000 South Florida properties, up 83% from the first half of 2009. In Miami-Dade County, there was a 125% increase in bank repossessions during the first 6 months of this year as compared with the same time period last year. Indeed, all these home repossessions are contributing to the continued decrease of prices in South Florida.

Strategic Defaults are Under Assault by Bank of America, and others, and May Lead to a Rise in Deficiency Judgments

Many financial institutions, including Bank of America, are planning on getting tougher with those who do not try in good faith to work out a deal with the bank but who have the capacity to pay.

Proposals that are currently floating around, and being pushed by Fannie Mae, and others, include trying to encourage distressed homeowners to find alternatives to foreclosure by banning those who walk away from their home from getting new loans to purchase a home for seven years. Put differently, if it is determined that you stopped making mortgage payments despite having the capacity to do so, you may be banned from getting a new loan for up to seven years.

A strategic default is a decision by a borrower to stop making payments on a debt despite having the financial ability to make the payment. A Wall Street Journal report recently estimated that 1 in 5 mortgage defaults are “strategic”. Indeed, many are anticipating that the next wave of foreclosures will consist of more and more individuals seeking to walk away from homes that are currently underwater.

Another weapon that many financial institutions have in their arsenal to combat strategic defaults is the pursuit of a deficiency judgment. A deficiency judgment occurs when the financial institution has not only taken the home back, but has also sold the home. However, the proceeds of the foreclosure sale were not enough to cover the full amount of the original mortgage. That difference between the foreclosure sale, and the original mortgage, is often referred to as the deficiency.

If a bank, such as Bank of America, suspects that the borrower simply walked away from the mortgage despite having the financial capacity to pay, the bank will likely have an increased incentive to pursue the borrower and seek recovery of the deficiency by way of a deficiency judgment. It should be emphasized that if a deficiency judgment is properly recorded, it could remain in effect for up to 20 years in the state of Florida. That means that the bank could have up to 20 years to recoup each and every penny, plus interest, of the deficiency judgment.

It becomes important to consult with an experienced foreclosure defense attorney to understand your rights. We have been successful in defending many foreclosure cases when given an opportunity to develop a plan to properly defend the foreclosure.
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If you are on the brink of foreclosure, and need to assess your legal rights, please contact our office today.

Miami Foreclosure Defense Lawyers: How the Foreclosure Process Is Initiated & Developing a Plan to Defend the Foreclosure

In Florida, unlike many other states, banks must utilize the court system in all foreclosures. In other words, if a bank wants to take your home, they must file a lawsuit against you. As a result, the foreclosure process may actually afford the homeowner with additional opportunities, and time, to remedy the situation.

It should be noted that many Florida banks hired several high-priced lobbyists recently in an effort to persuade our legislators to implement non-judicial foreclosures in Florida. Fortunately, the high-priced assault on homeowners, and their legal rights, in Florida failed. Therefore, foreclosures in Florida will continue to move through our judicial system.

It is therefore important to consult, and hire, an experienced foreclosure Defense attorney to defend your rights. An experienced foreclosure Defense attorney will be able to assess and evaluate what defenses you may have during the foreclosure process, and aggressively advocate your positions in the foreclosure.

For instance, the very first thing that a bank must do to formally initiate a foreclosure proceeding against you is to properly file a foreclosure complaint. Recent changes to our Florida Rules of Civil Procedure mandates that the banks must provide certain verification, under the penalty of perjury, that they actually own the note in question in order to properly file a foreclosure complaint. Failure to do so may result in the dismissal of the bank’s case against you.

Additionally, often times banks are required to send you written notification of the default at least 30 days prior to the filing of the foreclosure lawsuit against you. Failure to adhere to this condition precedent may result in the dismissal of the bank’s lawsuit against you.

When a foreclosure lawsuit has been filed, a process server will typically come to your home to serve you with the necessary legal papers. Often times, the process server may leave the papers on your doorstep when no one was home, or leave it with a housekeeper, or other person, that does not reside at your home. While the aforementioned circumstances certainly present the opportunity to raise a valid defense that you were not properly served with the foreclosure complaint, it is of critical and paramount importance that you respond within 20 days nonetheless. Even if you believe that the papers were not properly provided to you, if you fail to respond within 20 days you will be in a default situation where your defenses may be all waived and it will be difficult for you to assert any valid defense that you may have to defend the case.

Therefore, and upon receipt of the foreclosure complaint, irrespective of the manner in which you received it, it is critical to consult with an experience foreclosure Defense attorney to begin the process and developing a plan to defend the case and save your home. We have been successful in defending many foreclosure cases when given an opportunity to develop a plan to properly defend the foreclosure.
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If you are on the brink of foreclosure, and need to assess your legal rights, please contact our office today.

Miami Foreclosure Defense Attorneys Win Case Against the Bank and Get Attorney Fees Awarded to them too

Our firm recently prevailed in a contested foreclosure dispute after having litigated the case with the bank, and their lawyers, for three years. Not only did we win the case, but we were also awarded several thousands of dollars in attorney fees in doing so that the bank now has to pay our law firm.

The Judge assigned to the case awarded our firm 100% of the attorney fees we requested, and found our attorney fees to be reasonable given the complexities and issues raised in this case. This is just another example why it is important to hire an experienced foreclosure defense law firm to represent your interests.

This victory is also the latest in a growing trend for many homeowners that are actually winning their cases against the banks. Many judges are frustrated by the deliberately slow, and often times sloppy, pace of many banks that are attempting to foreclose. Indeed, the Florida Attorney General Office’s is currently investigating many law firms that actively file foreclosures on behalf of many Florida banks. The investigation centers on allegations of purported fraud.

Moreover, the bank’s efforts to move foreclosures out of the court system, and into a bank friendly, and bank created, foreclosure process, was rejected by our legislators. Additionally, recent changes to the Florida Rules of Civil Procedure that require banks to verify, under penalty of perjury, that the bank filing the lawsuit actually owns the mortgage, coupled with higher filing fees, and mandatory early mediation, all means that the banks have to be much more careful and precise when trying to foreclose on a property.

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If you are on the brink of foreclosure, and need to assess your legal rights, please contact our office today.

Saving Your Home: Alternatives to Avoid Foreclosure

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.

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Options to Dispose of Your Home

1. Sell the Home – if there is sufficient equity in your home, you may be able to sell your home in today’s market for more than the amount you currently owe on your mortgage. If you can do this, you will actually reap a profit.

2. Short Sale – if your home is “underwater”, i.e. you owe more than the home is worth, then you will have to pursue a short sale if you are interested in selling the home. A short sale is when a bank allows you to sell the home for a contract price that is less than the amount owed on the mortgage. In many instances, however, banks may reserve the right to pursue the difference between the short sale contract price, and the amount owed on the mortgage, from the borrower directly. This is commonly known as a “deficiency”, or “deficiency judgment”. So when trying to sell a home via short sale, it is important to understand whether the bank will continue to pursue the borrower, for monies owed, even after the transaction is completed, especially if the home was “underwater” at the time of the short sale. Don’t assume that just because the bank approved the short sale that they won’t pursue you for the difference after the deal is done.

3. Deed in Lieu of Foreclosure – this is accomplished when the property owner voluntarily gives the property back to the bank in exchange for the bank canceling the mortgage. In other words, the deed is transferred from the borrower to the bank in an effort to shorten the length and costly process of foreclosing on the property. As with a short sale, the bank may reserve the right to pursue any deficiency against the borrower directly even after the deal is done.

4. Tax Issues – all tax issues should be consulted in great detail with a certified public accountant. However, if you lose your home to foreclosure or short sale, where you sell your home for less than you owe, the IRS won’t add insult to injury by counting the difference as income. At least until 2012.

However, there are four major exceptions to the rule:

A. You did a cash-out refinance and splurged.
B. You have a home-equity line of credit.
C. You lost your vacation home or investment property.
D. You owned a multi-million-dollar home.

But again, these are issues to be covered in greater detail with an accountant.

If you are on the brink of foreclosure, and need to assess your legal rights, please contact our office today.

Real Estate Market Losing Steam as Hurricane Season Approaches

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.

If you are on the brink of foreclosure, and need to assess your legal rights, especially in light of the recent BP oil spill, please contact our office today.

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

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.
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If you are on the brink of foreclosure, and need to assess your legal rights, especially in light of the recent BP oil spill, please contact our office today.

Fraud at Countrywide Found Leading to the Foreclosure Crises in Miami and Beyond

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.

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This is just another example of the ongoing mortgage crisis which has taken hold in South Florida. If you are on the brink of foreclosure, and need to assess your legal rights, please contact our office today.

Deposit Recovery at Icon Brickell and Other Florida Condo Projects Impacted By New Florida Law

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 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.
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If you are a contract purchaser in a development that has not been completed, or you are seeking the return of your deposit, then please contact our office today.