Miami’s Foreclosure Process is a Major Hurdle in a Improving Housing Market

foreclosure 00a.jpgFlorida’s foreclosure process is a major hurdle in a slowly improving housing market. Today Florida has the highest rate of mortgages that are behind by more than 90 days. The national average for mortgages which are behind more than 90 days is currently at 5.6 percent. However, Florida is at a whopping 13.3 percent, over twice the country’s average. Florida had 103,000 residences that were auctioned or taken back by lenders over the past year. That total means that the state accounts for 8.8 percent of the foreclosure inventory, while the next highest state is at 6 percent. Many believe that the reason for this extremely high average is the states lengthy foreclosure process.

Due to the astonishing number of foreclosures and Florida’s current foreclosure process, homes are not making it back onto the market in a timely manner. Many of the banks or lenders who foreclose on these properties are unable to put them back on the market, because these residences continue to be occupied. The current process, which must go through the courts often times gets delayed to allow residents to try and hold onto their homes.

The homeowners/renters of these properties are causing an increase in price for the properties that do make it on the market. It is believed that if more properties from foreclosure are out on the market, it will balance out the high prices that are currently taking over the market.

There is a direct correlation between Florida’s foreclosure process and the continuing struggles with foreclosure that cripple the housing market. Since the state has the slowest process in the country, Florida is continually crowned with the highest percentage of foreclosures.

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.

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.

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.

Court Victory for Homeowners fighting Fraudulent Foreclosure

image.jpg​The Vidal’s, like many Florida residents, are familiar with the woes of foreclosure, and despite their win in the Fourth Circuit Court of Appeals in November the ruling may do little to lift their spirits. The couple’s Broward County home was sold in a foreclosure auction in April 2011 to a third party. That’s it, done deal, right? Wrong. The couple appealed the ruling of the Broward County Circuit Court and won.

The Fourth Circuit sided with the Vidals agreeing that Liquidation Properties, Inc., who foreclosed on the property, lacked the ability to do so.

Liquidation Properties acquired the Vidal’s mortgage from Option One Mortgage Corporation in 2009 but the company lacked standing to bring the suit that ultimately allowed the foreclosure of the home.

The company submitted documents to the Court showing that they had obtained the mortgage on the couple’s home but the documents were post-dated. The Court agreed this was insufficient to show that Liquidated Properties actually owned the property before they filed the foreclosure documents. The Fourth Circuit determined that the language of the document that transferred the mortgage to Liquidation Properties was ambiguous, and that left open the possibility that the company post-dated the document for their benefit.

Now, where does this leave the auction buyer? The buyer will most likely be required to surrender the home and take a refund from Liquidation Properties. And while there are whispers that the Broward couple may be able to get the mortgage cancelled because of the Lender’s alleged violations of the federal Truth in Lending Act, the court trends show it is unlikely. However, the Fourth Circuit indicated the couple may be able to collect damages for the alleged violations of the Act.

Everywhere the courts are in “watchdog” mode, making sure that lenders are following the black letter of the foreclosure laws, now that the robo-signing fiasco is behind them. And while the Court sided with the Vidal’s, this may have little actual benefit to them since the couple is ultimately not going to be permitted to live in the home for free. However, this is still a homerun for homeowners, seeing as this decision could affect the outcomes of many similarly situated families making it harder for lenders to cut corners in the foreclosure process.

Being in a foreclosure is a stressful situation. But there are alternatives available to help address the foreclosure.

There are many alternatives to foreclosure, and often times it just takes proper planning to properly navigate against the potential pitfalls. Help is often available to those who seek it. Contact us today.

Robo-Signing Fallout Gives Florida Highest Foreclosure Activity in the Nation for 2012

foreclosure-street.jpgWhile lenders are pleased to have guidelines with the robo-signing controversy resolved, the backlog has given Florida a tidal-wave of foreclosure activity. The number of foreclosure filings, in Florida, increased in 2012 by 53.5 percent over the number of filings made in 2011.

Since the dawn of the housing crisis these daunting figures gave Florida the highest foreclosure rate in the nation. California reported 14 percent of the nation’s total foreclosures last year second only to Florida at 20 percent with Ohio ranking third at 9 percent. In Florida, this meant one in every 32 homes had received some form of foreclosure filing in 2012, but most dealt with loans that have long been bad.

Of the 20 urban areas with high rates, Florida had eight within its borders including Miami at number 5, Palm Bay-Melbourne-Titusville tying at number 6, and Orlando at number 8. However, no one should be concerned by the rate as the state is jumping off the artificially low reported activity of 2011 caused by the robo-signing hiatus.

Meanwhile, throughout the country there’s been an even split on increased and decreased rates. But in most cases, states that saw an increase over last year’s numbers are “judicial” states. Judicial states being those that handle the foreclosure process through the court system proceedings just like Florida, instead of through other quicker processes. However, despite the increase in bank-owned properties, realtors don’t expect it to harm the recovering market.

In fact, the Miami Association of Realtors is expected to boast that home sales are beating the 2011 record. The report should show consistent gains for median home and condo prices.

The newest trend: buy at the courthouse. The bank-owned properties saturating the market are quickly being snapped up by professional investors. While potentially good for the market, this strategy may make it difficult for the average homebuyer to get in on the action.
Consider Your Options. Contact Us Today.

We have been successful in defending many foreclosure cases when given an opportunity to develop a plan to properly defend the foreclosure.

Our Miami foreclosure defense lawyers have assisted many homeowners in buying enough time to reach the solution that is right for them. There are many alternatives to foreclosure, and often times it just takes proper planning to properly navigate against the potential pitfalls. Help is often available to those who seek it.

If you are on the brink of foreclosure, need a real estate attorney, or just need to assess your legal rights, please contact our office today.

Call us today toll free at 1-866-518-2913 or at 305-263-7700.

South Florida’s Real Estate Market Still Ranks High in Delinquencies and Foreclosures, But The Market is Showing Signs of Improvement

house_for_sale.jpgBanks had been holding off on increasing the number of foreclosure filings in light of all sorts of paper work issues, including robo-signing allegations.

Even with banks holding back on foreclosure filings South Florida still ranked 10th nationally in foreclosure filings for the third quarter. Palm Beach, Broward, and Miami-Dade counties had 24,767 homes in some stage of foreclosure from July through September, up 11% from a year earlier. Nonetheless, Florida had the nation’s highest foreclosure rate in the nation.

In Miami-Dade County, the 90-day mortgage delinquency rate decreased, with 22.89% of mortgage loans being 90 days or more delinquent compared to 25.45% for the same period last year, representing a decrease of 2.56%.

On the other hand, the real estate market continues to show signs of improvement. Contracts for future construction projects in South Florida increased by 66% through the first nine months of 2012 compared to the same period last year.

Non-residential contracts, including commercial and manufacturing, grew 43% to $1.99 billing through September. Contracts for future residential saw the most growth, recording a 90% leap to $2.4 billion.

As for the overall health of the nation’s current real estate market, a lot still depends on the economy of the whole. The economy is still not producing jobs fast enough to aid the nation’s housing market.

Additionally, continued improvement in home sales and home prices will depend heavily on the volume of foreclosed homes in the housing market. Recent housing data suggests that many lenders have barely made a dent in the overall inventory of foreclosed homes.

As such, there is no question that this is a buyer’s market. Indeed, South Florida’s real estate market has picked up some steam recently due in large to foreigners investing in South Florida.
Consider Your Options. Contact Us Today.

If you need a real estate attorney, or just need to assess your legal rights, please contact our office today.

Call us today toll free at 1-866-518-2913 or at 305-263-7700.