Miami Foreclosures Continue to Hit the Rich and Famous, Not Just the “Average Joe”

OJs-home1.jpgThe foreclosure crisis has caused many people to lose their homes. The crisis has caused millions of people to pack up and move out of the places they called home. Most believe that foreclosure usually only happens to the “average Joe.” This is not the case as many who are considered to be rich and famous have also lost their homes to foreclosure. Among the stars who have lost their homes is Rihanna, Burt Reynolds, OJ Simpson, Chris Tucker, and Daunte Culpepper just to name a few.

Simpson is currently incarcerated in Nevada. He purchased his home for $570,000 in 2000. He stopped making payments on the home about two years after going to jail. The 4,233-square-foot home near Miami has been in foreclosure proceedings for about two years. A foreclosure judgment was entered against Simpson recently, and an online auction of the house is set for Oct. 29.

Another prominent former NFL player, Culpepper, also recently lost his 3.6 million dollar home located in Weston, Fla. The 10,000 square foot home was purchased back in 2006 when Culpepper was traded to the Miami Dolphins. At the time Culpepper inked an eight year 60 million dollar deal with the Dolphins, but failed to stay with the team longer than one season. Although Culpepper could not continue his career because he was plagued with injuries he previously made millions of dollars with the Minnesota Vikings.

These are recent examples that home buyers/owners should always be prepared for the worst. Foreclosure is something that could affect anyone at anytime, unless your home is paid off. This process of foreclosure is usually costly, confusing, and time consuming. Contact us today if you need assistance navigating the foreclosure process.

Appellate Court Renders Rulings Regarding Miami Foreclosures

foreclosurejpg-b2bd8d258facfb84.jpgWe recently discussed the impact Miami’s rocket docket is having on Miami foreclosures. Here are but three more cases illustrating the issues being raised on appeal as a result of the issues being raised, and ruled upon, during foreclosure rocket docket sessions.

In Lopez v. U.S. Bank, the trial court granted U.S. Bank a final judgment against Ana Lopez, which was later reversed by the Third District Court of Appeal. They reversed because the case was tried before it was “at issue.” Florida Rule of Civil Procedure 1.440 states, in pertinent part, that “an action is at issue after ant motions directed to the last pleading served have been disposed of or, if no such motions are served, 20 days after the service of the last pleading.”

In Lopez, the Defendant served her answer and affirmative defenses on January 21, 2012 and the trial court issued an order setting trial for February 8, 2013. The time allotted between Lopez’s pleading and trial is within the 20 days, making it the case not “at issue” on February 8, 2013, which is when the trial took place.

Both sides agreed that final judgment must be reversed due to the case not being “at issue” during the date of trial. Due to these factors the case was remanded for new trial. And this is just another illustration of the “rush” to judgment at times during Florida’s foreclosure rocket docket sessions.

In HSBC Bank v. Williams, the appellate court affirmed an attorney fee award in the Defendant’s favor of $74,429. That attorney fee award was issued as a result of the bank’s discovery misconduct which resulted in the bank’s foreclosure complaint being dismissed. The appellate court affirmed the trial court’s attorney fee ruling, and concluded that the bank should pay $74,429 to the borrower as a result of all the “run around” the borrower was put through during the court of the underlying litigation.

However, in Mendoza v. Chase, the appellate court affirmed the lower’s court ruling. In that case, the Defendants were appealing from a final judgment of foreclosure along with the ensuing sale and certificate of title. They claimed that they did not receive adequate notice of the non-jury trial. This Court determined that regardless of notice the outcome would have been the same so the ruling is confirmed from the lower court. The footnote explains that “there was no cognizable defense to the foreclosure action so that the same result would have occurred in any event.”

Miami Appellate Court Reverses Foreclosure Judgment Because the Bank Failed to Properly Perfect Service of Process

rocket docket 001z.jpgThe 11th Judicial Circuit in Miami-Dade County is under a lot of strain. The strain stems from a “perfect storm” of events. First, the real estate collapse led to an explosion of foreclosure filings in Miami. Second, the real estate collapse also triggered an extreme economic down turn. That resulted in the court system, and, in particular, the courts here in Miami, to lose much needed financial resources. So the end result is that our courts have been asked to do more with less.

The courts initially tried to balance the interests of those being foreclosed on with the growing weight of increased filings. In Miami, a program was initiated that required all parties to attend mediation within a set time frame after the filing of a foreclosure. Filing fees were also substantially increased for banks filing foreclosures. Yet, these programs did very little to either slow the overwhelming number of foreclosures being filed, or help struggling homeowners.

As a result, the judiciary took it upon themselves to try and push these cases through the judicial system to help alleviate the strain our judiciary was facing given the foreclosure crises. The creation of the “rocket docket” has helped lower the amount of foreclosures currently pending in our judicial system, and possibly even helped fuel the real estate recovery that is currently underway.

But the “rocket docket” is not without its problems. The rush to judgment may actually create more work for the judiciary if proper procedure is not followed prior to judgment being entered.

For instance, the Third District Court of Appeal in Peysina v. Deutsche Bank reversed a judgment that was entered against the homeowner in large part because of the court’s rush to judgment and failure to follow proper procedure. Peysina stemmed from a judgment of foreclosure against Natalie Peysina. Peysina argued that service of process was not properly perfected on her at the commencement of the lawsuit. Apparently, the Bank was unsuccessful at serving Peysina and chose publication as an alternate route. The trial court ruled that service was proper and immediately moved for trial on the foreclosure.

The Third District Court of Appeal, reversed that ruling, stating that the trial court failed to hold an evidentiary hearing regarding the service of process. The court also explained that service of process by publication requires a conscientious and honest effort, appropriate to the circumstances, which must be made to acquire necessary information.

Moreover, the record does not demonstrate that the Bank exerted an appropriate effort under the circumstances to be able to effectuate personal service upon Peysina. For these reasons the trial court must conduct an evidentiary hearing to ascertain enough information to make a ruling on the service of process. Once this has been determined then the foreclosure hearing can be determined.

Brazen Fraud – Fraudulent Deeds Creating Problems for Homeowners and Purchasers Alike

fraud.jpgA large number of claims in Florida are being filed as a result of forged deeds on foreclosed or bank owned properties. The deeds were almost always into trust and the transaction that was insured in the one from the trust to the new, the innocent purchaser.

How this scam works is as follows. First, the property is either currently being foreclosed on, or has been foreclosed on and the bank has acquired it. Often times the property at issue is “abandoned” by the homeowner leading to squatters coming to the property. Second, a special warranty deed is recorded that looks to be from an officer in the lender/bank’s office. Third, the grantee on the deed is a trust. Not a trustee of the trust, but the trust. Fourth, minimal doc stamps are then paid on the transfer.

The red flag or scam is that the grantee is a trust not the trustee of the trust. Moreover, another red flag has to do with the fact that only nominal stamps are paid for the transfer to the trust. Also, often times the notary who notarized the documents is not even a real notary.

For instance, our firm recently worked on a case where this fraud became painfully evident. Our client had fallen behind on his loan, and was in the process of being foreclosed. A short sale had been agreed upon and the parties were working towards completing that deal. However, a routine title search revealed the homeowners had deeded their property over to the “Claude Monet Trust.” The homeowners, of course, had nothing to do with that transaction, and denied ever selling it to the “Claude Monet Trust.” But that did not stop the brazen fraudsters from going so far as even filing a satisfaction of mortgage. As this was going on, squatters then appeared on the property, which further complicated matters. Fortunately, the notary who had notarized the deed was non-existent, and the doc stamps paid were improper, among other irregularities. We were able to work with the bank and get all the fraudulent papers stricken from the court file without having to file a quit title action, and we were able to complete the short sale.
But our story is not unique to the South Florida real estate landscape. Indeed, a partnership called Presscott Rosche or Prescott Rosche, is taking advantage of Florida’s foreclosure process in a fraudulent manner too. This company has claimed more than thirty (30) houses and condos throughout South Florida by fraudulent means. This is a very troubling development to many homeowners as the company has easily passed fraudulent deeds through the court system. These deeds often times do not contain the signatures of the proper homeowners; rather they contain forged signatures.

Most of the real homeowners, who have been a victim of this scam, are often times unaware that this is happening to them. They have submitted documents called “A Notice of Non-Abandonment” claiming the homes before “God Almighty under the Great Seal of Florida, and the laws of the united stated of America.”

On one occasion, Prescott Rosche filed a deed saying Frank Lopez and his wife transferred their Kendall to their partnership. Mr. Lopez first found out about this when he returned to his homes months after vacating it to find three people living in his home. He informed the police, who arrived along with four other men who brought a purported deed to his house. Lopez was later sent an apologetic letter by Prescott Rosche along with a deed that transferred the property back to Lopez. This was one of ten (10) deeds, which where transferred from Presscott Rosche back to its original owners.

Along with Prescott Rosche many fraudulent antics, they also have many employees under fake names and with criminal pasts. For instance, one of the partnership’s agents is listed as Daya Oluz, who in actuality is Claudia Zuloaga. Zuloaga is known to be an office manager for the company. She most recently worked as a tax preparer; who was banned from submitting tax documents after it was alleged that she was orchestrating a tax fraud scheme. Another example of this is Esteban Oviedo, who used the company’s fraudulent practices to take over a home which was owned by a German couple. Oviedo was suspected of breaking into the house and changing the locks. Oviedo claimed to have a proper lease to the home and was not convicted.

Fraud seems to be involved in every aspect of Prescott Rosche and it seems as though they have continued to proceed in fraud with relative ease. They often times are acquitted from claims against them, as the court claims there is not enough evidence to show they are not true owners.

Many of these fraudsters have mastered avoiding major legal issues as they rarely show up in court to defend claims against them. Contact our firm today if you believe that you have been the victim of a fraudulent transfer of your property.

Governor Scott Signs “Fast Track” Foreclosure Bill

foreclosure crises.jpgThe foreclosure process is about to speed up for all Florida homeowners. Gov. Scott signed a bill that is intended to streamline the foreclosure process and give community associations more power in the process.

The bill requires banks to file cases with a clear chain of ownership of the mortgage note and how the delinquency occurred. If the case has the correct documentation, the lender can seek a “show cause” order as to why it shouldn’t be awarded a judgment and take the house. The homeowner would have to quickly raise a valid defense.

The bill also shortens the time period in which banks may assert a deficiency judgment against homeowners from five years down to one year. This strict cut off is due in part to Florida having one of the longest foreclosure processes taking an average of 900 days.

The bill also prevents homeowners who wrongly lost homes to foreclosure from getting them back. Instead, they would be awarded monetary compensation.

Here are some of the bill’s highlights:

Deficiency Judgments

Under current law, a lender has 5 years from the foreclosure sale to file a deficiency action. This bill amends current law to provide a one-year statute of limitations for an action to enforce a claim of a deficiency related to a note secured by a mortgage against residential property that is a one-family to four-family dwelling unit. The limitations period begins on the 11th day after a foreclosure sale or the day after the mortgagee accepts a deed in lieu of foreclosure.

This bill amends current law to limit a deficiency decree in the case of an owner-occupied home to the difference between the judgment amount, or in the case of a short sale, the outstanding debt, and the fair market value of the property on the date of sale. This appears to codify the current practice of the courts when rendering a deficiency judgment. The bill provides a rebuttable presumption that if a county property appraiser has granted a homestead exemption to a residential property, that property is owner-occupied.

The bill also eliminates the common law recovery of such a deficiency when the court in the foreclosure action grants or denies a claim for a deficiency judgment. This provision appears to simplify the language of the current law without providing a substantive change in the law.

Lost, Destroyed or Stolen Notes

The bill creates s. 702.015, F.S., to provide that every complaint in a foreclosure proceeding on residential real property designed principally for one to four families must contain affirmative allegations expressly made by the plaintiff that the plaintiff is the holder of the original note or must allege with specificity the factual basis by which the plaintiff is a person entitled to enforce the note. If the plaintiff is not the holder of the note, the complaint must describe the authority of the plaintiff and identify the document that grants the plaintiff the authority to file the complaint on behalf of the holder of the note.

The plaintiff must file either the original promissory note or certification that the plaintiff is in physical possession of the original note, unless it is lost, destroyed or stolen. If the plaintiff is in possession of the original note, he or she must file a certification with the court with the filing of the complaint, under penalty of perjury. If the plaintiff claims that the note is lost, destroyed or stolen, the complaint must contain an affidavit that details a clear chain of all assignments or endorsements of the promissory note, set forth facts showing the plaintiff is entitled to enforce the note, and include exhibits providing evidence of the acquisition, ownership and possession of the note. The bill requires adequate protection to the plaintiff under the Uniform Commercial Code (UCC).

Protections for Lost, Destroyed, or Stolen Notes in Mortgage Foreclosures

The bill establishes a reasonable means of providing adequate protection under the Florida statutory framework relating to the enforcement of a lost, destroyed or stolen instrument. As it relates to a mortgage foreclosure, adequate protection would include:

• A written indemnification agreement by a person reasonably believed to be sufficiently solvent to honor such an obligation;
• A surety bond;
• A letter of credit issued by a financial institution;
• A deposit of cash collateral with the clerk of the court; or
• Such other security as the court may deem appropriate under the circumstances.

Any security given must be on terms and in amounts set by the court and must run through the
applicable statute of limitations for enforcement of the note. The security also must indemnify the maker of the note against any loss or damage that might occur by reason of a claim by another person to enforce the note. Recovery of damages and costs and attorney fees may be sought against the person.

Grandmother Trumped by the Donald over a Real Estate Deal Gone Sour

trump.jpgJacqueline Goldberg, an 87-year-old grandmother was unsuccessful in her suit against Donald Trump over a failed real estate transaction. During the four years of litigation, Goldberg and her attorney aimed to dissuade others from doing business with Trump and The Trump Organization. Goldberg claims that Trump swindled her into a bait-and-switch scheme to buy condos in one of his Chicago skyscrapers.

She claims to have suffered damages up to $6 million and asserts that Trump wooed her into buying two condos for $1 million each and promising her a share of building profits along with her commitment to buy. Trump reneged on this promise once Goldberg agreed to purchase the two condos.

Goldberg and her attorney are believed to have lost this lawsuit because of the details in the contract. The contract between the two parties stated that Trump could cancel the provision which allowed Goldberg a share in the building profits at anytime he saw fit. This may seem like an unfair provision considering the circumstances, but as it turns out Goldberg is a very profitable investor herself and should have been more cautious in signing the contract.

Indeed, our firm has been very successful in litigating these issues associated with contractual details and real estate transactions. Our firm is prepared to handle many real estate related litigation claims.

Trump is known as a savvy businessman, who is very flashy at times. It is easy to believe that Trump may have fascinated her with the idea of buying these two condos and also getting a share of the building profits. However, when signing into a contract it is always a “must” to read the contract in its entirety. Please contact us today if you are in doubt over your rights in any related real estate contract or if you are attempting to purchase real estate in Florida.

Although her wishes to expose Trump may fail, she has taught us all a very valuable lesson. This case is a prime example that no matter how great the deal may be or seem to be you should always read the contract before you sign on the dotted line. Whether you are an experienced businessman or just the average Joe you need to always know what you are signing. And if you don’t, then you should contact an attorney to help you understand it.

Equity Increasing for Homeowners

home-equity.jpgWith the housing market slowly making a comeback homeowners are seeing their property begin to produce equity again. Real estate equity jumped more in 2012 than it has in the past 65 years, with equity nationwide rising $8.2 trillion last year. The Federal Reserve reports that as a 25% gain.

But the recovery is not only giving homeowners much needed equity the upturn is also encouraging more lenders to make home equity loans, giving homeowners access to cash for that equity.

In the five years leading up to the 2006 real estate peak, Americans went on a spending spree, taking out $800 billion in their rising equity and spending it on everything from cars and tvs to debt consolidation and college tuition. Since the housing collapse banks have written off or deemed “worthless” over $250 million in home equity loans. The rate of current outstanding loans more than 90 days delinquent has dropped 25% in the 4th quarter according to the FDIC. And banks are now seeing home equity loans as a source of income again rather than losses. If loan defaults continue to decline this may be the year that banks see the home-equity business in the black.

Now, there are two types of home equity mortgages. One is an equity line of credit (Heloc) which is an adjustable loan who’s rate is tied to the prime rate (nationally this has averaged around 3.25% since 2008), while the average rate for Helocs are hovering around 5.11%. The other type is a close-ended loan (He-loan), that is dispersed as a lump sum, it is essentially a fixed-rate junior mortgage. These rates nationally are averaging 6.13%. However, lenders usually cap He-loans at 80% of the property’s value, which leaves a mandatory 20% equity in the property.

More good news, for the first time since 2005, the real estate market has added to the U.S. gross national product (GDP). However, despite the upturn, some are still hesitant and have been saving instead of spending. Bank accounts, savings bonds, and municipal securities increased by $500 billion last year (the most since 2007), while net household debt is at its lowest rate since 2005 at $10 billion.

The market is slowly recovering, and we can expect to see more people spending the money their homes are making for them again in the near future.

Know Your Rights – What Do You Do If the Property You Are Renting Is In Foreclosure?

foreclosure 008.jpgIf you are living in a property that is currently going through foreclosure you should know that you have rights that your landlord must acknowledge.

In 2009 the Protecting Tenants in Foreclosure Act was signed into law by President Obama. The law gives tenants much needed protection against the foreclosure of property owned by their landlords.

If you reside in a foreclosed property you are as much a party to that lawsuit as the owner. This means that you should respond to any foreclosure documents that may be served on you, and you should discuss with your landlord what they intend to do, if anything, about the foreclosure.

If you are served with a Notice of Foreclosure you should file a written Answer to the Court explaining: (1) You live in the property and are paying rent; (2) If you have a lease state when the lease expires; and (3) attached a copy of your lease to the Answer. You must continue to pay rent to your landlord throughout the entire foreclosure process or risk an eviction. If you file an Answer you will be notified of hearings as the case progresses.

If your landlord is unable or unwilling to stop the foreclosure (i.e. by paying its mortgage), a foreclosure sale will occur; the buyer of the property will become the new owner and your new landlord. Now, if this happens you still have rights as a tenant. The new owner must honor your lease until it expires unless you have what is called an “at will” tenancy (your lease contains language that permits the landlord to end your lease at any time) or if you have no lease, or if the new owner intends to move into the property. If any of these conditions apply the new owner must give you 90 days notice, and within those 90 days you must find new housing as your lease will end.

Otherwise, if you have a written lease, are not an “at will” tenant, and the new owner does not intend to inhabit the property, the new owner must honor your existing lease for the time remaining on it., After the judicial sale you are no longer required to make payments to your old landlord, the new owner should receive those payments. However, this is very important, make sure you obtain proof of ownership before you pay them any money. Make sure to get any agreements with the new landlord in writing. Section 8 housing landlords are bound by the same restrictions.

If the new owner fails to give you at least 90 days notice to terminate your lease you should send the owner a letter objecting to the termination before the date indicated on the notice, send it to the address the owner puts on the notice, and send it by certified mail, return receipt requested. If the owner ignores your letter and files an eviction complaint against you, you should file an Answer with the court stating: (1) the termination notice sent by the owner was improper because you were given less than 90 days notice; or (2) that the owner could not evict you until the lease expired under the Protecting Tenants at Foreclosure Act.

Keep copies of everything you send to the new owner or submit to the court. If you are required to go to court bring all copies of papers you submitted to the court and to the landlord.

Third Attempt at Faster Foreclosures in Florida: In its Newest Form, House Bill 87 Attempts to Streamline the Foreclosure Process for the Banks

general0001.gifThree years, three attempts to pass bills pushing for Florida foreclosure reform. The newest takes the form of Bill 87 and is destined to be a hot topic in the upcoming session. What might this newest incarnation of the Fair Foreclosure Act mean for homeowners?

Consumer advocates are armed and ready. The last attempt to speed foreclosures ended in the Senate last year with House Bill 213 that contained language allowing lenders to speedily foreclose on property that was deemed abandoned. 213 was a hot button topic that led consumers on a protest march on the state Capitol last year. Advocates feared 213 would allow lenders to kick Floridians out of their homes without notice simply because after conducting interviews with neighbors the lender deemed the home “abandoned.” But Representative Kathleen Passidomo who filed 87 earlier this month urges consumers that this version has “far more borrower protections than what is current.”

House Bill 87 requires lenders to certify that they have the right to foreclose on a property. Proponents hope this step will reduce the paperwork mishaps of previous years that are still gumming up foreclosures in Florida. The bill also requires lenders claiming to hold the original mortgage note to provide detailed facts about the physical location of the note. While this would benefit consumers fraudulently foreclosed on by lenders, the bill offers some protections to lenders that may have many homeowners up in arms.

Namely, 87 prohibits homeowners from suing lenders who have fraudulently foreclosed for a return of their property. These situations are currently sticky situations because the lender has generally sold the property to an unsuspecting third party. This bill limits the homeowners remedy to monetary damages, allowing the purchaser to keep the property.

Condominiums will also receive a benefit should this bill find its way through the legislature. Associations will be allowed to hasten foreclosures when banks are dragging their feet to cut their own costs. Unfortunately Condo associations have been stuck footing maintenance costs when banks carry out lengthy foreclosures on units.

But, consumers may be happy to find that the bill decreases the time lenders have to file deficiency suits against foreclosed homeowners. Currently, lenders have five years to bring suit for the difference between the debt owed and the price the property sold for at auction, 87 would decrease that time to 1 year. If lenders fail to file suit within the shorter time period after a final judgment is entered, homeowners would be protected from the remaining debt liability.

The retroactive nature of the bill also has some on edge. The bill allows some changes to apply to all mortgages, and foreclosure proceedings currently on file, while other provisions would be limited to suits and notes filed after the July 1, 2013 deadline or upon enactment of the bill itself.

Changes may be coming to Florida foreclosure law, and homeowners should be prepared. Please feel free to contact our office to discuss further.

Fall Out from the Foreclosure Chaos – Squatters and an Increase in Adverse Possession Claims

squaTTERS.jpgJust think, you come back to your condo or home to find a stranger inside, a stranger who claims that you no longer own your property. The headlines have been bombarded with news of “Loki Boy” and his attempt to adversely possess a $2.5 Million home in Boca Raton, and copycats in Broward and Miami-Dade County. In Broward, the county appraiser’s office has received several adverse possession filings over the past few months since Loki Boy’s story broke. Broward County Property Appraiser Lori Parrish has had enough of it. She’s begging the state legislators to strike the law from the books once and for all.

The adverse possession law allows someone to take ownership of a property they have openly, and exclusively possessed for at least seven years. In addition the “squatters” are required to pay the taxes and liens on the property for those years.

Parrish is outraged that someone would have the audacity to file an adverse possession claim with her office, particularly when the home is not in foreclosure. She calls the centuries old rule a way to “legitimize breaking and entering” when used today. The rule came about when Florida was majorly agricultural land that sometimes fell into disuse. In a time like today, squatters are taking advantage of the floundering foreclosure process.

In Miami-Dade County, a recent news story ran about all the confusion surrounding who actually has the legitimate right to reside in multi-million dollar mansion in Coral Gables. Indeed, our firm has been involved in several “trespassing” episodes and worked with the authorities to ensure proper ownership.

Senator Maria Sachs agrees that something needs to be done; the increase in these types of filings indicates that something must change with the system. In Florida, one of the states hit hardest by the housing crisis, foreclosed property is often left empty while lenders proceed through the agonizingly slow foreclosure process, perfect prey for adverse possessors.

But foreclosure property isn’t the only target of these copycats. An adverse possession filing was recently submitted for oceanfront property in Broward. The property is not in foreclosure, in fact it’s simply for sale and empty. Luckily for the sellers, police apprehended the individual just days after he filed for adverse possession. Had he not been apprehended the property owners would have had to file a civil suit to eject the squatter.

Today’s property owners need to ensure that their property is safe, secure and free of all trespassers. Feel free to contact our office if you are experiencing an issue with squatters.