Miami Real Estate Attorney Blog

Almost half of all single-family homes with a mortgage in South Florida are currently under water. An underwater home loan is one where the loan balance is greater than the fair market value causing the homeowner to be upside down on the mortgage.

The State of Nevada leads the country in underwater homes, and Las Vegas leads the country. The State of Florida ranks third in the country, and Jacksonville, Tampa and Ocala have the highest percentage of underwater homes in the state.

Since the housing market peaked in 2006, thousands of homeowners have seen their home equity disappear while home prices decreased more than 50%. Because of the decline in home prices, coupled with the loss of home equity, many homeowners have stopped paying their mortgages and simply turned the home over to the bank.

When facing an underwater mortgage, as well as higher property taxes and home insurance, walking away from your home could be extremely tempting to homeowners.

However, walking away from your home does not come without consequences, and often times those consequences are negative.

It is imperative that you understand both the pros and cons associated with walking away from your home. The negative implications could haunt you for years. But the positive ramifications may set you free financially.

There are also often times many alternatives available to you in an effort to avoid foreclosures. Indeed, one such potential option may be to explore the government's newly enacted and revised re-finance program, i.e. HARP.

Continue reading "Growing Number of Underwater Homes in Miami are Causing Many to Walk Away from their Homes" »

Good news for those who have strategically defaulted on their mortgages and are worried about their credit. A new study is set to be released which reveals that people who default on their mortgages, and not on other debts, are not as risky as once thought. Let's hope lenders will take this into account when looking at someone's credit history.

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.

Transunion, one of the largest credit reporting agencies, conducted research which shows that those who only default on mortgages are less likely to default later on new car loans or credit cards than are people who have defaulted on their mortgage and some other loan at the same time.

The study also revealed that mortgage-only defaulters saw their credit scores rebound faster than people who have defaulted on multiple loans. This includes people who have filed for bankruptcy.

This research is valuable to lenders because mortgage-only defaulters are certainly going to be a major part of the market in the future. This is a result of many homeowners who have elected to make "strategic defaults", which is when a homeowner who could afford to pay their mortgage defaults because their home's value tanked. Another study shows that strategic defaulters have better credit histories than other mortgage defaulters. It also showed that strategic defaulters are savvy about credit.

Today's current real estate market, and ongoing foreclosure crises, presents all sorts of issues that must be properly navigated. There are many factors contributing to Florida's nation leading delinquency rates. They include a weak job market, weak economic recovery, and a major drop in home prices. Consequently, Florida's housing market remains unsettled in large part due to the continued foreclosure crises.

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.

The term "underwater" typically refers to the situation where a borrower owes more on their home than their home is worth. According to news reports, Florida is behind only Nevada and Arizona with the amount of homes with negative equity, or that are currently "underwater."

Nearly half of all Florida homeowners had mortgages that were "underwater." Specifically, more than 2 million mortgages out of 4.5 million are currently underwater. Additionally, an almost 200,000 more were near negative equity.

The high number of loans that are "underwater" is an increasingly disturbing trend in South Florida. The reason being is that may individuals with a loan that is "underwater" have decided to "strategically default" on their loan.

What is a 'strategic default'? It is a decision by a borrower to stop making payments on a debt despite having the financial ability to make the payment. The large financial firm, Morgan Stanley, for example, recently made the calculated decision to give up five San Francisco towers it purchased at the peak of the booming real estate market.

Many individual borrowers are also turning to the same strategy used by Morgan Stanley, and others, and are seeking solutions to the problems brought in by the unstable real estate market. And the reason 'strategic defaults' are becoming so popular are for a number of different reasons.

For instance, many homeowners are unable to sell their homes without bringing tens of thousands of dollars to the closing table. Consequently, many of these owners just give up and walk away. This, in turn, triggers more foreclosures and, ultimately, price declines.

Today's current real estate market, and ongoing foreclosure crises, presents all sorts of issues that must be properly navigated. There are many factors contributing to Florida's nation leading delinquency rates. They include a weak job market, weak economic recovery, and a major drop in home prices. Consequently, Florida's housing market remains unsettled in large part due to the continued foreclosure crises.

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.

Continue reading ""Underwater" Homes Continue to Dampen South Florida's Real Estate Market Leading to More "Strategic Defaults" and Foreclosures" »

Double dip? Some are saying it is a foregone conclusion. Others are saying it won't happen at all. But this much is certain. The foreclosure crises here in South Florida continues to pick up steam with no end in sight anytime soon.

South Florida has been one of the hardest hit regions in the country with respect to foreclosures. As reported in the South Florida Business Journal, the numbers are rather staggering.

For instance, more than 100,000 properties have been repossessed in the Tri-County area since the real estate market began to collapse in late 2007. That breaks out to an average of 2,300 repossessions a month. Moreover, the 100,000 mark was hit earlier this month, when 317 properties were repossessed in the tri-county area.

To understand these numbers in greater context, lenders have repossessed an average of 75 properties per day since January of 2007. Approximately 40% of all South Florida properties have been repossessed, by the banks, as a result of a foreclosure filing.

And it does not seem to be getting better. Consider a recent USA Today article discussing how 1 in 10 American households with a mortgage was at risk of foreclosure this year. About 9.9% of homeowners had missed at least one mortgage payment as of June 30th.

In a worrisome sign, the number of homeowners starting to experience problems with their mortgage rose after trending downward last year. The number of Americans missing payments and falling into foreclosure has followed the upward trend in unemployment, which has shown no sign of easing anytime soon.

Continue reading "Miami Foreclosure Defense Lawyers Review the Numbers Behind the Foreclosures " »

It's every homeowner's nightmare -- losing your home to foreclosure. But it does not have to happen. With a strong advocate on your side, it may be possible to keep your home and even get a lower mortgage payment.

Alvarez & Barbara, LLP, is a team of experienced and aggressive foreclosure defense attorneys. We use the legal system to help people save their homes -- and we can stand up for you.

Many people wait too long before getting legal help. They delay in the hope that they can turn their financial situation around. If you are behind on your mortgage payments or are having trouble making your monthly payments, you need to take action now. The sooner you call us, the quicker we can start working to save your home. Get help today to assert your rights in these difficult times.

Asserting your rights will not only give you the chance to save your home; it may also increase the amount of time that you have in your home.

Consider these rights that homeowners have during foreclosure:

•You have the right to be notified of the foreclosure. Lenders must give you written notice that they plan to foreclose on your home.

•You have the right to stop foreclosure by paying off all of the past due amounts you owe on your home mortgage.

• You have the right to discuss the foreclosure with your mortgage company. If you are unable to pay what you owe on the house, you may be able to negotiate alternative payment options (a loan workout/loan modification).

• You may be able to privately sell your home to pay back mortgage debt. However, selling your home may not discharge the remaining debt you owe on the home (if it sells for less than you need to pay back the loans).

• You have a right to contest the foreclosure process. Did the mortgage company properly notify you? Is there evidence of predatory lending?

• If your home is sold, you have a right to any money that comes of the sale that is not necessary to pay back your mortgages and late fees.

• You have a right to hire an attorney. Sometimes, the best defense against foreclosure is a Miami foreclosure attorney.

Continue reading "Our Miami Foreclosure Defense Lawyers Are Fighting to Save Your Home - Know Your Rights" »

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.

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

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.

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

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.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

According 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.

Continue reading "South Florida Real Estates Sales Are Up As Foreclosures Steady " »

In Miami, the mortgage crises continues its ugly march into the record books. According to the Mortgage Bankers Association, more than 10% of homeowners with a mortgage had missed at least one payment between January and March of this year. That is a record high and up from 9.1 percent from a year ago.

While many are predicting an improvement soon, the continued high number of homeowners in default or at risk of losing their home to a foreclosure will have a lingering effect on the economy as a whole.

Worse yet is the fact that a Wall Street Journal report reveals that one in four in the government's loan modification program are dropped. According to the U.S. Department of the Treasury's April update, the Making Home Affordable Program (HAMP) has 78,356 home loans under active modification, of which 30,923 are in Miami-Dade, Broward and Palm Beach counties.

On the other hand, we are starting to see some slow progress. For instance, while loan modifications got off to a slow start, housing officials have recently created incentives for lenders and servicers which have resulted in more modifications. Additionally, the number of homeowners starting to show signs of trouble is trending downward. As of March, nearly 3.5% of borrowers had missed at least one month of mortgage payments, down from 3.8% from a year earlier.

But the slow progress we are seeing is not enough to correct a bad situation. Therefore, should loan modifications fail to help, many homes will go up for sale either as a short sale or in a foreclosure sale. Therefore, many are forecasting that home prices will soon see yet another dip as more of these homes go up for sale at deeply discounted prices. While the mortgage crises was initially triggered by lax lending practices, today's mortgage crises has many reasons other than just a home underwater.

Continue reading "Mortgage Delinquencies Continue to Worsen in Miami" »

According to a recent news report, home repossessions increased to record levels and more than one fifth of all U.S. mortgage holders were underwater on their mortgages in that they owed more on their mortgage than their home was worth.

More than 1 in 1000 homes were repossessed by lenders in March. Twenty three percent of owners of homes with mortgages owed more than their home was worth, and that was up from 21 percent in the prior three month period.

Moreover, U.S. home values continue to drop. The values dropped 3.8 percent in the first quarter, and that is the 13th straight period of year over year declines. These trends make it increasingly difficult for home owners with homes underwater to move the homes. Thus, when they fall behind, their options are limited. This makes it more likely that those homeowners will lose their homes in a foreclosure.

The continued high number of homes, and homeowners, underwater will continue to place a downward pressure on home prices. Thus, it is likely that we will see home prices continue to fall a bit more during the course of the next 12 months.

Additionally, banks are repossessing homes at a greater rare. In the first quarter, bank repossessions rose by 35% in comparison to the same period of the prior year. Indeed, repossessed homes now account for 1/5 of all homes currently for sale.

Continue reading "Increase in Miami Homes Being Repossessed Due to Foreclosures " »