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Florida Judges Bash Bank “Foreclosure Mills”

A Judge in Pasco County, Florida, admonished U.S. Bank, N.A. for committing a “fraud” in a foreclosure lawsuit. Another Judge in St. Petersburg, Florida was highly skeptical about the validity of documents submitted by the bank’s “foreclosure mill”. These cases highlight many of the problems that banks are encountering when trying to foreclose on homes using a “foreclosure mill”.

As reported in the Wall Street Journal, U.S. Bank N.A. sued a homeowner after the homeowner defaulted on a $190,000 loan he had received from U.S. Bank N.A. in Pasco County, Florida The Law Offices of David J. Stern, which represented the bank, prepared a document called “assignment of mortgage” showing that the bank received ownership of the mortgage in December of 2007. The document was also dated December 2007.

But after investigating the matter, the Circuit Court Judge assigned to the case concluded that the document could not have been prepared until 2008, and not 2007 as the bank claimed. Therefore, the Judge ruled that the bank could not prove it owned the mortgage at the time the foreclosure was filed. Specifically, the Judge wrote that the”assignment of mortgage” that was purportedly prepared in 2007 “did not exist at the time of the filing of this action … was subsequently created and … fraudulently backdated, in a purposeful, intentional effort to mislead.” The Judge ultimately dismissed U.S. Banks N.A.’s foreclosure case against the homeowner.

This is just another example of an unfortunate trend developing in Florida. Banks are inundated with foreclosures due to the collapse of the housing market, and often times they do not have the appropriate paperwork to support their claims. Our law firm could help assist in defending these types of cases, and we can assist with your needs.

And with the increased number of foreclosures comes the higher propensity for banks to make mistakes. Which is yet another reason to ensure that banks be required to go through the judicial process. Fortunately, and as we reported in our earlier blog posting the Florida legislature rejected the bank’s efforts to bypass the judiciary.

“The pure volume of foreclosures has a tendency perhaps to encourage sloppiness, boilerplate paperwork or a lack of thoroughness” by attorneys for banks, wrote the Judge in the Pasco County assigned to this particular foreclosure claim. The deluge of foreclosures makes the process “fraught with potential for fraud”, she said.

At an unrelated hearing, a Florida State Court Judge in St. Petersburg said that an affidavit submitted by the David J. Stern law firm on behalf a bank in a foreclosure case was not necessarily sufficient to establish that the bank was the owner of the mortgage. The Judge, in that case, said at a hearing that “I don’t have any confidence that any of the documents the Court’s receiving on these mass foreclosures are valid”.

Plase contact our office today if you are facing foreclosure. Our team of foreclosure defense attorneys can help you. But don’t delay and call us today.

Foreclosures in Miami are on the Rise

A recent report in the Miami Herald reveals that 19,918 homes slipped into some stage of foreclosure during the first three months of 2010. That is a 60% increase in foreclosure related matters as compared with the three months of the year last year.

In Broward county, the number of homes falling into some stage of foreclosure is even higher – 21,308. And that means the increase is a staggering 67% increase compared with the first three months from last year.

Additionally, banks also repossessed over 9,000 properties in South Florida during the first three months of 2010. Indeed, over 3,500 properties were repossessed in March alone in the tri-county area.

What all those numbers mean is that at least 1 in 45 homes in South Florida are at some stage of the foreclosure process, and the numbers are growing.

Indeed, the foreclosure crises is striking all areas of South Florida. A recent report in the Miami Daily Business Review reveals that while Fisher Island has one of the highest per-capita incomes in the Unite States, the banks are pursuing many Fisher Island homeowners in foreclosure. The same holds true for many other high end South Florida communities such as Gold Beach, Golden Estates and Coral Gables, just to name a few.

With each passing day it becomes abundantly clear that the average person, whether they are wealthy or low income, are over leveraged. That includes the multi-millionaires with multimillion dollar homes.

If you or a loved one are facing a foreclosure, please contact our office today.

Florida Foreclosure Cases Will Still Head to Court

In a victory for all Floridians, a piece of legislation that was backed by the Florida Banker’s Association died today in the Florida House of Representatives.

The controversial piece of legislation would have weakened the voices of the many distressed homeowners in Florida by depriving them of their basic due process rights to a hearing, and notice. If this bill had passed, the balance of power on foreclosures would have swung almost entirely in the bank’s favor, leaving the homeowner with little to no recourse to fight to save his home.

As reported in the Miami Herald, the Florida House of Representatives Criminal and Civil Justice Policy Council ended its session without hearing the controversy foreclosure bill.

The proposed bill would have allowed banks to skip legal proceedings all together unless the homeowner requested that the foreclosure go through the legal system. Such a bill would only further the struggles many homeowners are experiencing by significantly shortening the foreclosure process thereby making it more difficult to save the home.

Of significance, the proposed bill would have allowed homeowners to go to court, and avoid the non-judicial foreclosure process, only if they made a request within the first 20 days of the foreclosure process. That particular provision is indicative of the importance of immediately contacting our office upon receipt of any foreclosure related papers so as to best assess what options you may have to defend the foreclosure.

This fight, however, is not over. The banks will again attempt to pass this bill through the current legislative session. Please check our blog frequently for updates regarding this important piece of legislation.

If you, or a loved one, are facing foreclosure, please contact us today to discuss your situation in greater detail.

Miami Foreclosures Stem from Multiple Factors

The Florida Realtors recently released a report revealing that those that fell into foreclosure typically had one more reason other than a job loss or bad loan.

“Contrary to what some researchers have argued, many Florida homeowners were not driven into foreclosure by simply being trapped in bad loans, or losing their jobs or taking pay cuts,” said Joel Searby of Strategic Guidance Systems. “What we found in talking with people who’ve gone through foreclosure is that there’s a `plus one’ factor,’ ” meaning job loss coupled with other circumstances such as divorce or health problems usually led to homeowner distress.

Not surprisingly, the study also revealed the far reach of the foreclosure epidemic in that foreclosures have impacted homeowners across a broad range of incomes and demographic backgrounds. After researching many of the markets with the highest rates of foreclosures, including Miami, from March 2006 through February 2009, the report made the following findings:

• More than 20 percent of homeowners who were foreclosed upon had household incomes ranging from $50,000 to $75,000. Another 20 percent had incomes in excess of $100,000.

• One in four Floridians facing foreclosure were college grads. Another 30 percent had at least some college education.

• Ninety-two percent of foreclosed-upon Floridians were married homeowners, and 8 percent were single. Nearly two-thirds of Florida foreclosure cases involved families with children.

• Thirty-five percent of those in foreclosure had lived in their homes for 10 years or more. More than 40 percent had lived in the homes fewer than 5 years.

If you or someone you know is facing foreclosure, please contact our office today to schedule an appointment so that we may assist you in addressing your foreclosure related concerns. You can reach us at 305-263-7700.

Foreclosure Has Consequences with Uncle Sam

With tax season upon us, many homeowners are confronted with the reality that they may have to pay taxes for some of the mortgage debt that was forgiven during a foreclosure. A recent CNNMoney.com report discusses this unfortunate trend.

As reported by CNNMoney.com, it is IRS policy to tax forgiven debt you are personally responsible for as if it is income. Say, for example, your credit card company settled a $10,000 debt for 50 cents on the dollar. You’d have a debt forgiveness of $5,000, which the IRS would count as income, just like your wages.

The same policy held true for most mortgage debt until 2007, when Congress passed the Mortgage Forgiveness Debt Act. That ended the liability for many homeowners — but not all.

In general, 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:

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1. You did a cash-out refinance and splurged.
2. You have a home-equity line of credit.
3. You lost your vacation home or investment property.
4. You owned a multi-million-dollar home.

Please contact our office today to discuss foreclosure related issues with you in greater detail. You can reach us by calling us at 305-263-7700.

South Florida Real Estates Sales Are Up As Foreclosures Steady

foreclosure 001.jpgAccording to the National Association of Realtors, sales of existing homes and condos in Miami-Dade, Broward and Palm Beach county rose 27% in April.

Additionally, and another positive trend, last month’s statewide existing home median price of $140,100 was 1% higher than the statewide median price in April of 2009. While the median price for single family homes also rose, the same can’t be said for condos. Statewide, condo prices fell 1%, to $79,300 from $79,000.

In the tri-county area, Miami saw the smallest increase in home sales in April. There were 594 sales, up 7% from 555 in April of 2009. The median price was up 8%, to $192,000 from $177,000.

There several factors behind these positive numbers. We previously anticipated this news, and discussed many of the many positive factors that are behind the recent news regarding the trends in the Miami, and South Florida, real estate market.

As for some of the reasons behind this trend, they include the following:

• The recent expiration of certain tax credits forced many to buy before the tax credit expired.
• We’re starting to see a stabilization of home prices.
• Home prices are starting to stabilize because inventory levels are starting to fall.
• Inventory levels are starting to fall because foreclosures are being absorbed in the market at manageable levels.

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If you wish to discuss this article, or your real estate needs in general, please contact our office today to discuss further. Our phone number is 305-263-7700.

Florida Supreme Court Ruling Clears Up Ambiguity in Disputes Involving Escrow Accounts and Hands Developers a Significant Victory in Pre-Construction Contract Disputes

Victory for Developers-thumb-300x400-79964Back in September of 2011, we discussed the impact of the Third District Court of Appeal’s ruling mandating that developers must keep pre-construction deposits in separate escrow accounts.

However, the Florida Supreme Court has since reversed that ruling. In so doing, the Florida Supreme Court concluded that the deposits could be kept in one account so long as the accounting was done separately and the monies were not commingled with the developer’s own money.

The Florida Supreme Court’s ruling clears up an ambiguity regarding Fla. Stat. Sec. 718.202 and the requirements set forth in that statute governing the maintenance of pre-construction deposits. Simply put, the ruling is a significant victory for developers because developers are now free to keep money from condo buyers in one account so long as that account is not commingled with the developer’s money and proper accounting is kept.

This is a significant ruling that will no doubt have an impact on both ongoing development as well as many South Florida legal battles that continue to rage on in South Florida’s courts.

Since the real estate market went bust back in 2007, developers and pre-construction contract buyers of condominiums (many of which were never built) have flooded South Florida’s court system with lawsuits. Many of those lawsuits focus on the buyer’s effort to have their deposit returned. In most cases, those deposits were either 10 or 20 percent of the purchase price.

Florida Statute Sec. 718.202 protects condo buyers’ deposits of up to 10% of the purchase price and forbids developers from using that money during construction. Failure to adhere to the statute may result in 3rd a degree felony against the developer. However, the developer is permitted use funds in excess of 10% of the purchase price for construction purposes. But Fla. Stat. Sec. 718.202 imposes certain requirements on those funds too.

Thus, an ambiguity arose in the interpretation of that statute. The legal question became whether or not the monies that could be used for construction purposes were to be held in the same escrow account as the initial 10% deposit, or whether those funds needed to be placed in their own separate escrow account

Florida Supreme Court Ruling Clears Up Ambiguity in Disputes Involving Escrow Accounts and Hands Developers a Significant Victory in Pre-Construction Contract Disputes

Victory for Developers-thumb-300x400-79964Back in September of 2011, we discussed the impact of the Third District Court of Appeal’s ruling mandating that developers must keep pre-construction deposits in separate escrow accounts.

However, the Florida Supreme Court has since reversed that ruling. In so doing, the Florida Supreme Court concluded that the deposits could be kept in one account so long as the accounting was done separately and the monies were not commingled with the developer’s own money.

The Florida Supreme Court’s ruling clears up an ambiguity regarding Fla. Stat. Sec. 718.202 and the requirements set forth in that statute governing the maintenance of pre-construction deposits. Simply put, the ruling is a significant victory for developers because developers are now free to keep money from condo buyers in one account so long as that account is not commingled with the developer’s money and proper accounting is kept.

This is a significant ruling that will no doubt have an impact on both ongoing development as well as many South Florida legal battles that continue to rage on in South Florida’s courts.

Since the real estate market went bust back in 2007, developers and pre-construction contract buyers of condominiums (many of which were never built) have flooded South Florida’s court system with lawsuits. Many of those lawsuits focus on the buyer’s effort to have their deposit returned. In most cases, those deposits were either 10 or 20 percent of the purchase price.

Florida Statute Sec. 718.202 protects condo buyers’ deposits of up to 10% of the purchase price and forbids developers from using that money during construction. Failure to adhere to the statute may result in 3rd a degree felony against the developer. However, the developer is permitted use funds in excess of 10% of the purchase price for construction purposes. But Fla. Stat. Sec. 718.202 imposes certain requirements on those funds too.

Thus, an ambiguity arose in the interpretation of that statute. The legal question became whether or not the monies that could be used for construction purposes were to be held in the same escrow account as the initial 10% deposit, or whether those funds needed to be placed in their own separate escrow account

Florida Supreme Court Ruling Clears Up Ambiguity in Disputes Involving Escrow Accounts and Hands Developers a Significant Victory in Pre-Construction Contract Disputes

Victory for Developers-thumb-300x400-79964Back in September of 2011, we discussed the impact of the Third District Court of Appeal’s ruling mandating that developers must keep pre-construction deposits in separate escrow accounts.

However, the Florida Supreme Court has since reversed that ruling. In so doing, the Florida Supreme Court concluded that the deposits could be kept in one account so long as the accounting was done separately and the monies were not commingled with the developer’s own money.

The Florida Supreme Court’s ruling clears up an ambiguity regarding Fla. Stat. Sec. 718.202 and the requirements set forth in that statute governing the maintenance of pre-construction deposits. Simply put, the ruling is a significant victory for developers because developers are now free to keep money from condo buyers in one account so long as that account is not commingled with the developer’s money and proper accounting is kept.

This is a significant ruling that will no doubt have an impact on both ongoing development as well as many South Florida legal battles that continue to rage on in South Florida’s courts.

Since the real estate market went bust back in 2007, developers and pre-construction contract buyers of condominiums (many of which were never built) have flooded South Florida’s court system with lawsuits. Many of those lawsuits focus on the buyer’s effort to have their deposit returned. In most cases, those deposits were either 10 or 20 percent of the purchase price.

Florida Statute Sec. 718.202 protects condo buyers’ deposits of up to 10% of the purchase price and forbids developers from using that money during construction. Failure to adhere to the statute may result in 3rd a degree felony against the developer. However, the developer is permitted use funds in excess of 10% of the purchase price for construction purposes. But Fla. Stat. Sec. 718.202 imposes certain requirements on those funds too.

Thus, an ambiguity arose in the interpretation of that statute. The legal question became whether or not the monies that could be used for construction purposes were to be held in the same escrow account as the initial 10% deposit, or whether those funds needed to be placed in their own separate escrow account