Articles Posted in Foreclosure Defense

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error-not-foundIf you happen to have Ocwen as a mortgage servicer (or former servicer), you may have an excellent reason to challenge their books.  Check out this quote from an Eleventh Circuit Court of Appeals case out this week in University of Puerto Rico Retirement System et al v. Ocwen et al.

“Unfortunately for Ocwen, REALServicing didn’t really work—the software, as it turned out, was incapable of properly tracking borrowers’ accounts and payments, and it recorded inaccurate information about interest, late fees, escrow accounts, or completed payments for up to 90% of the loans in the system.”

90% of their loans were not properly accounted for!  Wow that’s pretty bad!

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reverse-mortgageReverse mortgages are a great way to provide retirement funding but they do come with traps for the unwary.  In a recent Forbes article, “Additional Risks of Reverse Mortgages,” complaints to the Consumer Financial Protection Bureau remain high.  Areas of concern include servicers that:

  • make it difficult to coordinate payment;
  • act as if property taxes and other homeowner obligations are not met;
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foreclosureIn a recent case, Harbin v. Roundpoint Mortgage Co., No. 18-11713 (11th Cir. Dec. 17, 2018), the Eleventh Circuit confronted a situation where a borrower applied for a loan modification and was told that the foreclosure sale was “temporarily postponed.”  This borrower decided not to file bankruptcy to stop the foreclosure when she was told this by her mortgage company.  Who wouldn’t?  When the sale went through anyway, she sued.  The appellate court held that the borrower “reasonably could have believed . . . that the foreclosure had been ‘suspended temporarily'” and that the statement was ‘material’ because it was the key to [the borrower’s] decision whether to file for bankruptcy before the June 3 sale.”

Beware out there – consult with a foreclosure defense attorney or a bankruptcy attorney to make sure you know what’s going on with your home if it is in foreclosure — and the various options on how to keep your home.

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Most of us still use the New Year as an opportunity to review the past year and set goals for the New Year.  My own practice has grown tremendously from this goal setting.  We target the best strategies to grow our practice and help our clients to get back on track financially.

As most of you know, we practice bankruptcy and foreclosure defense as we have for many years, but since student loan debt has become such a crisis, much of our work is focused on eliminating that debt.  We have developed different strategies both inside and outside of bankruptcy to reduce student loan debt.

A new tool we are adding this year involves the misreporting of student loan debt on credit reports.  Put quite simply, the student loan servicers often can’t get it right.  They send bills with different amounts owed, transfer the debt so often that it appears duplicate times on a credit report, inaccurately reports payments etc.  We intend to hold them accountable.  Stay tuned as we hope to blog about this regularly to help our readers recognize when their credit reports may be in error and costing them real money – by denied credit or increased cost of credit, insurance etc.

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fha-appleI’ve written before about the requirement in FHA mortgages that the lender send certified letters and conduct a face-to-face meeting with a borrower before initiating a foreclosure.  When a lender fails to do that, the may be liable for the damages sustained in a wrongful foreclosure.  There are other advantages as well to allow for the transfer of the debt to a third party or even another family members in case they wish to keep the home if the borrower becomes ill or even passes away.  Also it’s easier to obtain deficiency waivers of the debt in case a short sale or foreclosure occurs.

Conventional mortgages are not assumable.  However, similar to veterans who have VA loans, a consumer with an FHA loan may sell his/her home to a purchaser who is willing to assume the existing mortgage and continue making payments pursuant to the existing lending agreement.  HUD and FHA approval is necessary for a loan assumption to occur, and requirements include:

  • Manual underwriting to ensure that the homebuyer is creditworthy
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fha-guidelinesIf you have a FHA mortgage and have not had a face-to-face meeting with your lender, this may be the ticket to stop the foreclosure!

Foreclosures are on the rise in Florida:  Tampa/St. Pete is up 75%; Orlando is up 198% and Jacksonville is up an astonishing 332%.  While Tampa is the strongest real estate market of these other Florida metro areas, this uptick bears watching.  Overall, I’d have to say as a foreclosure defense attorney that lenders appear to have corrected many of their ways regarding properly documenting a mortgage and its subsequent assignment.  But lender practices are often still deficient.  A foreclosure defense attorney just needs to be more diligent in representation to ensure our laws are followed.

A mechanism that was designed to prevent unnecessary foreclosures is found in FHA mortgages and is known as the face-to-face meeting requirement.  FHA notes specifically limit acceleration of the debt and foreclosure only when permitted by HUD regulations.

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foreclosure-defenseIt’s well known that Florida foreclosure attorneys vary in experience and results.  Some do loan mods, some don’t.  Some do short sales, some don’t.  Some file bankruptcies, some don’t.  Some do appeals, some don’t.

Mark was a very strong litigator who won many foreclosure dismissals and appeals.  That seems to be a universal opinion shared by many who saw him in action in the courtroom.  That was always what he was best known for as a practicing attorney – I have no comment on any of the TBO allegations out there as I do not know the whole story and it is not my place.

We’ve always taken what I call a holistic approach.  While we can try for a dismissal and we’ve had many dismissals over the years, we are really looking for a complete and final resolution for the client.  A dismissal means the bank/lender will just keep coming back and file yet another foreclosure.  Some clients want that – they just need time in the house without a mortgage payment while they get back on their feet.  Some have saved some funds to apply to a down payment for another home that is not underwater.  Some try for a free house, which very rarely happens.

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national-mort-settlement
During the financial crisis, many banks, especially Bank of America, N.A., received credit under the National Mortgage Settlement Act when they wrote off an underwater second mortgage.  This was very common in Florida because many 80/20 mortgages were written around 2004-2007 and values crashed in 2008.

However, now years later, homeowners are finding out that the banks never filed the appropriate document in official records to wipe out the second mortgage:  this would be called a Satisfaction.  Some homeowners are unable to sell their home without now paying or otherwise resolving this released debt, or are even being sued for the debt.

It is likely that this is a violation of our consumer protection laws, specifically the FDCPA and FCCPA.  These laws allow for statutory and actual damages as well as attorney’s fees.  It is unknown how widespread this may become.

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During the mortgage meltdown, many homeowners received financial assistance from a fund set up by Florida called Florida’s Hardest Hit Program.  This was primarily for folks whose income dropped during the recession.  Due to lack of funds, the program has now ceased taking applications.

However, there is one assistance program still open – the Florida Elderly Mortgage Assistance (ELMORE) program.  This program offers as much as $50,000 to elderly homeowners who have reverse mortgages.

To qualify all persons must meet certain criteria listed here:  ELMORE

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consumer-protectionMost of our debt collection laws in Florida apply only for consumer debt, not business debt.  Sometimes the answer is not quite clear as to what type of debt is involved.  What if for instance you operate a business and took out a loan, but signed a personal guarantee.  Sometimes, that personal guarantee will have language referring to the debt being for personal, family or household use.  That would likely make the guarantee a consumer debt.

By the way, that terminology comes from the Florida Consumer Collection Practices Act (“FCCPA”), Fla. Stat. Section 559.55-559.77 which defines a consumer debt as a debt incurred for “personal, family or household use.”

What happens if you buy a house, live in it for years, but then ultimately end up moving and renting it out?  Or you rent out a room while you are living there?  Commericial or consumer debt?

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