What to expect if you cannot pay your mortgage – This timeline comes directly from the Department of Housing and Urban Development, in other words, HUD:
Once you get out of the habit of making a mortgage payment, it’s hard to get back to making that large payment every month. This is particularly true, with student loans also restarting payments now.
What do we do that can help solve this problem for you?
We litigate mortgage claims, assert consumer defenses when available and defend foreclosures in Florida. State law relating to foreclosures vary widely and we limit our practice strictly to Florida for mortgage related issues, generally in the counties surrounding Tampa Bay. We’re a member of a local Tampa Bay foreclosure defense attorney group, and NACA which is a national consumer advocacy group where consumer attorneys share ideas, tips and trends.
The regular FHA HAMP loss mitigation programs will remain in suspension until October 30, 2024 – next year! All foreclosure sales are to be suspended until the same date. Same with Deed in Lieu negotiations.
So what does that mean?
All borrowers who are already in default or at risk of imminent default are supposed to be evaluated under the expanded guidelines of the Covid 19 Recovery Option program. These provisions could be terminated early by Congressional action, executive or agency rules.
Back in the 2008 foreclosure crisis, one of the biggest problems was the lack of assistance for those who were not on the deed (such as following a death or divorce). Now there are new rules in place for successors in interest for instances where the homeowner may have died or transferred the home via a divorce decree of some sort. These new laws allow the “new” homeowner to unilaterally assume the role as successor in interest. Importantly, it does not require consent by the lender. In some cases, the “new” homeowner does not have to assume the mortgage loan.
Successor in interest means a person to whom an ownership interest in a property securing a mortgage loan subject to this subpart is transferred from a borrower, provided that the transfer is:
(1) A transfer by devise, descent, or operation of law on the death of a joint tenant or tenant by the entirety;
“When do you need a foreclosure attorney?” was one of our highest performing videos last month. That has motivated me to prepare a series of blogs, guides and new videos to help consumers learn about their options and what they should be aware of when they are behind in their mortgage payments. This information is not intended to help someone represent themselves in a foreclosure action. That can get complicated and most people are not well suited to litigation. But this information should help a homeowner know what options are available, where to turn, timelines, and likely outcomes. All of that is necessary whether you are planning to keep a home or letting it go.
So why is this coming up now?
As of August 2023, many covid-19 related moratoriums have expired and have unplugged the pipeline of distressed properties. We are now at about 100,000 foreclosures nationwide, where in 2008 through early 2010 we had over 900,000 homes in foreclosure nationwide.
The FHA Covid-19 Forbearances allow for reduced or suspended payments without specific terms of repayment, for six months at a time, up to 18 months. Deadline for applications was May 11, 2023. The end of the health emergency is now over. If you’ve lost your income, job change or divorce for instance, you may have qualified for this relief.
A FHA Covid-19 Modification is called Advance Loan Modification. If a mortgage loan is in forbearance, the review will occur within 30 days of forbearance ending. For those mortgage loans are not in forbearance, if the loan is 90 plus days delinquent it must be reviewed for a modification offer on or before 10/30/2024. This is still in effect!
January 2023 new guidelines: a substantial change is that the guidance now applies for non-occupied borrowers. Some other notes:
Lenders will often try to get a note and mortgage into evidence with a simple endorsement in blank of the promissory note. This can be defeated.
The mortgage is the issue.
A mortgage follows a “note” but a mortgage does not follow a non-negotiable instrument. Since Florida Statutes Ch. 673 does not apply, the transfer of the mortgage is governed by chapter 679, which requires a written assignment. The attempted transfer of the non-negotiable instrument should be ignored.
I know I posted about this before, but it bears repeating as I fear many homeowners will lose their home to foreclosure if they don’t know about this very important rule change last summer.
Important new change for opposing MFSJ for those living in Florida. Don’t expect to just show up at the hearing and argue — this rule will prevent anything you say from helping you.
Take a look at the 4th Circuit case which I believe is the first ruling on the amended MFSJ rule. Page 4: https://www.4dca.org/content/download/839898/opinion/212397_DC05_06082022_101625_i.pdf
Some borrowers run into trouble with their mortgage companies that is not of their own doing. One thing the mortgage servicer likes to say is that it isn’t their problem, the prior servicer handled that – and the borrower is still in default or owes some fee.
However, the subsequent servicer has liability for this.
State v Family Bank of Hallandale, 667 So2d 257 (Fla. 1st DCA 1995) is a case that can be used to show subsequent servicer liability: The law is well established that an unqualified assignment transfers to the assignee all the interests and rights of the assignor in and to the thing assigned.
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