Posts Tagged ‘stop foreclosure Orlando’
Posted on April 11th, 2012 by Mark Stopa
I talked to two prospective clients this week, and both conversations broke my heart. In both cases, it was clear to me that I really could have helped these homeowners, but they waited too long to consult me.
In the first case, the homeowner failed to defend and was defaulted by the clerk. A default, of course, is like a forfeit in sports. It’s the court’s way of saying a defendant does not get to participate in a lawsuit or assert any defenses in opposition to foreclosure. It is possible to vacate a default (and, hence, defend a case), but the longer one fails to act after having been defaulted, the harder it is to defend a case.
In this particular case, the bank was so slow to prosecute (even after getting a default against the homeowner) that the clerk issued a notice of intent to dismiss for lack of prosecution. Incredibly, even after receiving that, the bank still failed to do anything for 60 days. If this homeowner had consulted me at that point, I would have filed a motion to dismiss for lack of prosecution. While I can’t “guarantee” anything, I am virtually certain I would have gotten that motion granted and the case would have been dismissed. Alas, the homeowner did not consult with me, and about 120 days after the notice was issued, the bank finally woke up and filed something, precluding a dismissal.
An opportunity for a great result presented itself, but the homeowner didn’t have a lawyer, so the opportunity was lost.
In the second case, an elderly homeowner suffered a final judgment of foreclosure while trying to defend his foreclosure case himself. He was desperate to file an appeal and willing to pay me to do so. Sounds good, right? Well, for me, it doesn’t matter if a client is willing to pay; if I don’t think I can help, I’m not going to take somone’s money. Don’t get me wrong; I’m more than happy to take on an appeal. The problem is that if a homeowner doesn’t make the appropriate arguments (in a procedurally proper way) before the foreclosure judgment was entered, then there is little any foreclosure defense lawyer can do about it on appeal. After all, the purpose of an appeal is to ask the higher court to rule that the lower court made a legal error. If the homeowner didn’t argue something correctly (or at all), then the appeal won’t be successful.
What really frustrated me about this case was that, prior to suffering the final judgment of foreclosure, the homeowner actually got the judge to dismiss the case with prejudice! Unfortunately, the judge later vacated that order of dismissal upon a motion from the bank. When I reviewed the transcript from the hearing on that motion, I was pulling my hair out with frustration, feeling confident that the judge would not have vacated his order of dismissal if I was involved in the case at that stage of the case. Alas, I was not involved, so the motion was granted, the order of dismissal was vacated, and, ultimately, the homeowner was foreclosed.
What’s perhaps more frustrating about that is that the homeowner had enough money to pay for a court reporter and order a transcript of the hearing, but he tried to handle the hearing himself. I’m sorry, but that’s ass backwards.
Look, I know that many homeowners think they know a lot about foreclosure law. Some of them, quite frankly, have taken advantage of their unemployment (to the extent that’s even possible) by studying foreclosure laws. That’s all fine and good, but I’d bet anything that I know far, far more about the arguments to make in opposition to a bank seeking to vacate an order of dismissal under Rule 1.540. As I read the transcript, it was clear this homeowner had no idea what to argue or what to say. The bank brought witnesses to testify and the homeowner had no idea what to do.
This was a huge hearing, mind you. If he won, then the order dismissing his foreclosure lawsuit with prejudice would have remained in place. It was important enough for him to hire a court reporter, and he had the financial means to do so, yet he decided to handle this hearing without a lawyer. Sigh.
By no means are lawyers perfect, and that includes foreclosure defense lawyers. However, these were two examples, just from this week, where it was very apparent to me that I could have helped homeowners avoid foreclosure if only those homeowners had consulted with me sooner.
So if you’re wondering when to retain a foreclosure defense attorney, learn from the mistakes of these two homeowners. Hire a lawyer to defend your case from the outset. If you don’t, you risk missing out on viable arguments and defenses that may well help you avoid foreclosure.
Mark Stopa
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Posted on August 17th, 2011 by Mark Stopa
Years ago, foreclosure carried a negative stigma. Homeowners facing foreclosure didn’t want to talk about their predicament out of fear of embarassment, not wanting to be viewed as a ”deadbeat.” Now? Things have certainly changed.
Foreclosure is so pervasive, affecting everyone from all walks of life, that the stigma is gone, if not entirely, then almost entirely.
Why the change in perception? I see two reasons. First, the mainstream media has shown the public, over and over again, how banks are slimier than pigs in a mud pit on a rainy day. Suddenly, as far as foreclosures go, homeowners aren’t the ones with the negative stigma. It’s now OK to openly discuss foreclosure, as I’ve seen by the creation of various on-line support groups in recent months.
Second, the public has begun to realize that foreclosure affects everyone. Unlike years ago, it’s not just the unemployed or disabled – it’s rich and poor; millionaires and unemployed; black, white, and Hispanic; old and young; blue collar and white collar; … everyone.
I know this from my own experiences, having represented doctors, lawyers, judges, engineers, and countless other professionals.
Want more proof? Burt Reynolds is facing foreclosure on his Florida home.
We’re not talking about some D-list celebrity hack who made a movie once. We’re talking about Burt Reynolds.
If you’re facing foreclosure, don’t be embarassed. Foreclosure affects all walks of life. Instead, hold your head high, hire a lawyer, and fight to protect your rights.
Mark Stopa
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Posted on November 27th, 2010 by Mark Stopa
I’ve spoken about reversing a Final Judgment of Foreclosure for invalid service of process on this blog on multiple occasions. In fact, I have hearings coming up in two different cases (one on Monday morning in Jacksonville) with this precise issue. Hence, I’m pleased to read the following decision from Florida’s Third District Court of Appeal, which reversed a Final Judgment of Foreclosure for invalid service. (Hat tip to www.4closurefraud.org for pointing this out to me.)
If you think this argument may apply in your case, bear in mind the two critical facts at play here: (1) the homeowner was never served; and (2) the homeowner never filed any papers in the case and otherwise did not defend. When those two facts both apply, a Final Judgment is void and can be vacated at any time, even years later.
Here’s a link to the opinon.
Mark Stopa
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Posted on November 24th, 2010 by Mark Stopa
I’ve been stewing about this article, wherein a retired judge questions whether foreclosure defense is “unethical,” for a few days now. I think that assertion is totally absurd, but I see no need for a lengthy retort. Instead, I’ll sum it up like this…
The justice system in the United States allows murderers to go free (in certain circumstances) when evidence is obtained pursuant to an illegal search. The Defendant could have murdered someone – and everyone in the courtroom, including the judge, knows it – yet he walks free because of a violation of his constitutional rights.
Let’s pause and think about the lawyer who files the motion to suppress the evidence based on the illegal search. Is he acting unethically? Personally, I could never file that motion. However, I suspect every judge sitting on the bench would agree the answer is “no” – filing that motion is the defense lawyer’s job.
With that in mind, how could anyone say that defending a foreclosure case is “unethical.” I’m not putting murderers back on the streets – I’m helping homeowners who’ve been screwed over by the banking industry. If vile criminals can exercise their right to counsel, then certainly homeowners can as well.
I suppose I can see how the ”lack of standing” defense that foreclosure defense lawyers routinely assert in foreclosure lawsuits is similar to the motions to suppress filed by criminal lawyers, as one could argue that the defendant was “guilty” in both instances and “got away with it” on a technical violation. The difference, though, is that if I win a foreclosure case based on a standing defense, a murderer doesn’t get to roam free – instead, a bank that’s screwed over homeowners for many years gets a dose of its own medicine.
Mark Stopa
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Posted on November 17th, 2010 by Mark Stopa
I don’t know that the fact pattern in this case is going to happen very frequently, but I’m sure there are more cases out there where brokers have made misrepresentations in connection with a loan, as in this appeal. In any event, it’s certainly good to see the Second District continuing to reverse summary judgments of foreclosure!
Mark Stopa
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Posted on November 10th, 2010 by Mark Stopa
I read lots of articles in the media about foreclosure, and this one may be the best I’ve ever read. It’s a little crass, as it includes a few f-bombs, but put that aside and what you have is an author who does an incredible job of explaining the foreclosure crisis in a way that the typical American can understand.
By: Matt Taibbi, Rolling Stone
The foreclosure lawyers down in Jacksonville had warned me, but I was skeptical. They told me the state of Florida had created a special super-high-speed housing court with a specific mandate to rubber-stamp the legally dicey foreclosures by corporate mortgage pushers like Deutsche Bank and JP Morgan Chase. This “rocket docket,” as it is called in town, is presided over by retired judges who seem to have no clue about the insanely complex financial instruments they are ruling on — securitized mortgages and labyrinthine derivative deals of a type that didn’t even exist when most of them were active members of the bench. Their stated mission isn’t to decide right and wrong, but to clear cases and blast human beings out of their homes with ultimate velocity. They certainly have no incentive to penetrate the profound criminal mysteries of the great American mortgage bubble of the 2000s, perhaps the most complex Ponzi scheme in human history — an epic mountain range of corporate fraud in which Wall Street megabanks conspired first to collect huge numbers of subprime mortgages, then to unload them on unsuspecting third parties like pensions, trade unions and insurance companies (and, ultimately, you and me, as taxpayers) in the guise of AAA-rated investments. Selling lead as gold, shit as Chanel No. 5, was the essence of the booming international fraud scheme that created most all of these now-failing home mortgages.
The rocket docket wasn’t created to investigate any of that. It exists to launder the crime and bury the evidence by speeding thousands of fraudulent and predatory loans to the ends of their life cycles, so that the houses attached to them can be sold again with clean paperwork. The judges, in fact, openly admit that their primary mission is not justice but speed. One Jacksonville judge, the Honorable A.C. Soud, even told a local newspaper that his goal is to resolve 25 cases per hour. Given the way the system is rigged, that means His Honor could well be throwing one ass on the street every 2.4 minutes.
Foreclosure lawyers told me one other thing about the rocket docket. The hearings, they said, aren’t exactly public. “The judges might give you a hard time about watching,” one lawyer warned. “They’re not exactly anxious for people to know about this stuff.” Inwardly, I laughed at this — it sounded like typical activist paranoia. The notion that a judge would try to prevent any citizen, much less a member of the media, from watching an open civil hearing sounded ridiculous. Fucked-up as everyone knows the state of Florida is, it couldn’t be that bad. It isn’t Indonesia. Right?
Read the rest of the article here. It’s worth the read.
Mark Stopa
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Posted on October 31st, 2010 by Mark Stopa
One of the under-reported stories of Foreclosure-Gate is the ability of homeowners facing foreclosure to retain a foreclosure defense attorney, live in their homes without paying their mortgage, and either save their money or spend their money on something besides their mortgage. In some states, such as Florida, the period of time where such homeowners can live for free could be many months or even years. I’ve seen this phenomenon in place for quite some time, hence the name of this website – www.stayinmyhome.com.
Reasonable people can argue about the morality of living in one’s home without paying. That said, with each new story of foreclosure fraud by banks, there is less and less of a stigma for homeowners employing such an approach. To illustrate, here is today’s article in the Wall Street Journal:
The mortgage-foreclosure mess could prove expensive for banks and investors. But in some states, it will also prolong an unintended economic stimulus: free housing for millions of defaulters.
Across the U.S., banks are running into problems foreclosing on homes because of flaws in their paperwork. Their main transgression involves the use of so-called robo-signers, bank employees who signed foreclosure affidavits without properly checking the required loan documentation. Major loan servicers—including Bank of America Corp., J.P. Morgan Chase & Co. and Ally Financial Inc.’s GMAC Mortgage—have at least temporarily stopped some foreclosure sales as state attorneys general probe their practices and loan servicers check to make sure their papers are in order.
The problems will be expensive for banks, and for investors in mortgage bonds, in terms of added processing costs and lost interest income. But for the millions of U.S. homeowners who have stopped making mortgage payments or who are already in the foreclosure process, the upshot is that they’ll get to stay in their homes a bit longer. Given that they’re not paying rent, that time has value.
Defaulters living in their homes are getting a subsidy worth about $2.6 billion a month, according to a Wall Street Journal analysis based on mortgage data from LPS Applied Analytics and rent data from the Commerce Department. That’s 0.25% of U.S. personal income, roughly equivalent to the benefit top earners receive from Bush-era tax breaks.
The longer defaulters stay in their homes, the longer the stimulus lasts. The average borrower whose home is in the foreclosure process hasn’t made a payment in nearly 16 months, according to LPS.
In most places, the foreclosure delays are unlikely to amount to more than a couple more months of free rent, says Ivy Zelman, chief executive of housing-market consultancy Zelman & Associates. But she says it could be six or more months in states such as Florida and New York, where the legal bottlenecks are most severe.
“In places where people get an extra month or two, it probably doesn’t have much effect,” Ms. Zelman says. “But in states where it lasts longer, it’s probably stimulative.”
It’s hard to know how much of that money will find its way into the economy through consumer spending. Some defaulters sock away their mortgage payments, in hopes that they’ll strike a modification agreement with their bank and get current again. Others have lost their jobs and hence most of their income, though the free housing might allow them to make purchases they otherwise would have to forgo.
Yolande Walker, who lived for two and a half years in her three-bedroom home in the Las Vegas suburb of Henderson, Nev., after defaulting on her $1,700-a-month mortgage payments in 2008, said the free housing helped her make ends meet after she lost her job as a commercial-loan processor. “I was able to make my car payment and keep from losing my car, and I was able to pay the utilities,” said the 50-year-old Ms. Walker, who finally lost the home to foreclosure last month. She is still looking for work, and says her unemployment benefits are scheduled to run out in December.
Some homeowners who have defaulted on their mortgage payments are cashing in by renting out their homes. Joe Mayol, a real-estate agent in Palmdale, Calif., estimates that in his area about two-thirds of houses with defaulted mortgages are occupied, and half of those by renters. “People are getting money out of these houses,” he said.
Ms. Zelman says her research suggests defaulters do spend much of the money on consumer services and goods. “People are taking what they would have been spending on a mortgage and spending it somewhere else,” she says.
To be sure, while the free rent might help some people through periods of unemployment, it’s not particularly encouraging to people who keep paying their mortgages, and it’s not going to drive a recovery. It’s also painful for local governments and school districts, which typically can’t collect property taxes from defaulters. The foreclosure troubles can also add to uncertainty in the housing market and delay its return to healthy growth.
“I don’t think that’s the kind of consumer recovery we want, if the only reason they’re spending a bit more is that they’re not paying their other bills,” said Joseph Carson, director of global economic research at AllianceBernstein in New York.
Another question is what might happen in the housing market if banks caught up in robo-signing controversy can’t put as many foreclosed homes up for sale. By taking some supply off the market, it could help support prices at a time when demand has been exceedingly weak.
Given the number of foreclosed homes that have already piled up in their inventory, though, banks already have more ready-for-sale houses than the market can bear. As of September, banks owned nearly a million homes, up 21% from a year earlier. That alone would take 17 months to unload at the most recent pace of sales, and doesn’t include the 5.2 million homes still in the foreclosure process or those whose owners have already missed at least two payments.
Meanwhile, banks and investors suffer. It’s hard to estimate how much it will cost to fix the paperwork problems. But the interest they could earn on the money from selling all the homes they own, together with the ones attached to delinquent mortgages, amounts to more than $10 billion a month.
Still, at least some of the banks’ loss is the borrowers’ gain.
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Posted on October 31st, 2010 by Mark Stopa
If you’re evaluating whether to enter a “temporary” loan modification, read this article closely. I’ve spoken with hundreds of homeowners with similar experiences, and it’s not a pretty picture. It’s so bad, I’d argue that most people who can’t afford the normal monthly payments are better off not paying at all.
As it’s Halloween, let’s call “temporary” loan modifications what they are – a trick.
By Cami Joner
Columbian Staff Reporter
Sunday, October 31, 2010
Joseph and Jacqueline Freeman at their Battle Ground-area farm, Friendly Haven Rise. The 10-acre farm and home have been on the brink of foreclosure since 2008, when the Freemans lost income from the farm business. The Freemans operate the farm like a school, where people pay to learn about raising crops and livestock and using tools.
Jacqueline and Joseph Freeman thought they were doing everything possible to keep from losing their Battle Ground house and farm when they obtained a temporary mortgage modification through a federal program in 2009. But despite not missing a single month’s payment during 12 months at a “trial” reduced mortgage rate, the Freemans are worse off now than in late 2008, when their income fell dramatically due to canceled bookings at their farm-school business, Friendly Haven Rise.
Last month, the Freemans received a foreclosure notice from their lender, Wells Fargo, which said the couple’s mortgage is $23,000 in arrears. They feel betrayed by the federal program that was set up to help, Jacqueline Freeman said. “We had no clue we were headed toward foreclosure,” she said. “We thought we were taking part in a national program that was helping people.”
The Freemans are not alone. They are among millions of American home owners who are frustrated with the Obama administration’s Home Affordable Modification Program, or HAMP, a $75 billion federal program that was supposed to be their salvation. Instead, the program appears to be failing droves of homeowners who, like the Freemans, have been drawn into trial modifications that leave them with more principal outstanding on their loans, less home equity and worse credit scores.
Launched in February 2009 with $50 billion from the U.S. Treasury Department and $25 billion from taxpayer-owned enterprises Fannie Mae and Freddie Mac, HAMP promised to help between 3 million and 4 million homeowners modify their mortgages. Twenty months later, only 495,898 U.S. borrowers have received permanent loan modifications, according to a newly released federal report.
In Washington, 9,054 homeowners have been helped with permanent mortgage modifications through HAMP, and another 3,390 are in trial modifications. Many others have entered the program and then exit without receiving a permanent modification. Meanwhile, 17,670 Washington households faced foreclosure in the three months ending Sept. 30. The program and its predecessor, Making Home Affordable, have helped very few troubled homeowners in Clark County, a suburban community where the foreclosure rate is the fourth-highest in the state with one out of every 374 housing units in foreclosure.
HAMP runaround
According to a Vancouver foreclosure counselor, the problem with HAMP is that banks don’t stick with its trial payment period guidelines, which state that temporary help should last no more than three months before borrowers receive permanent modifications to their mortgages. Instead, many lenders stretch trial modifications out for months or years as homeowners deplete dwindling savings accounts in a futile effort to get stable relief.
“I’ve got clients I’ve been working with for over two years that have had no permanent resolution,” said Kevin Gillette, program manager at the nonprofit Community Housing Resource Center in Vancouver.
The agency provided counseling to more than 1,000 local households from Oct. 1, 2009 through Sept. 30, but Gillette said he has few success stories to share. He said the HAMP trial period is supposed to last only long enough to test whether the homeowner is committed to making the modified payment. However, Gillette said lenders often keep taking the reduced monthly payments for six months or longer. “In the end, they deny the permanent modification,” leaving bewildered borrowers wishing they had saved the money instead.
Gillette finds the situation appalling. He blames mortgage banks, which, he said, have little to gain from permanent HAMP modifications and just waste the homeowners’ money and time while keeping them suspended in trial payment limbo. “Why not tell homeowners no, you’re not going to help them and let them go on about their business?” he said.
That might have helped the Freemans, who contacted their lender at the first sign of mortgage distress. They were told they would be eligible for HAMP if they skipped two months’ worth of payments.
“It was actually easier those months,” said Jacqueline Freeman, who used the reprieve to pay off other bills.
Gillette warns his clients not to follow the advice to skip monthly payments, which will immediately put an already-troubled homeowner in mortgage default. “Nobody should be telling anybody this, but they do,” Gillette said.
Though few in the mortgage industry defend HAMP, many bank lenders deny claims that they’re giving bad advice. The challenge, according to a Wells Fargo Bank spokesman, is that a mortgage modification often can’t help a homeowner who’s been caught in the downward spiral of economic recession and unemployment.
“The bottom line is, if you had a job before and now you’ve lost it, even if we modify the loan, with zero income, the customer cannot afford to pay it back,” said Tom Unger, a Portland-based spokesman for Wells Fargo.
Unger said Wells Fargo and other banks often see more success with in-house modification programs that avoid the confusion of the government-driven HAMP. “When the government programs were first announced, people’s expectations ramped up and then the (program’s) rules kept changing,” he said.
Mortgage black hole
The Freemans thought they were benefiting from the trial modification that reduced their monthly payment from $2,150 per month to a more manageable $1,390. Now Jacqueline Freeman would like to know what happened to the total $16,680 they shelled out over the course of 12 months. “How could the bank say we are $23,000 behind? That part doesn’t make sense to us,” she said. Gillette said most homeowners don’t understand that trial reduction does not reduce the loan’s interest rate.
“All the while, that loan balance is growing until (the homeowner) is so far in the hole there’s no way they can ever come out of it,” said Gillette, who has seen numerous homeowners devastated by trial modifications.
Some have left his clients in arrears by as much as $70,000, he said.
“The banks are setting these people up to fail,” said Gillette, a former mortgage professional who theorized that mortgage lenders would rather foreclose on the house and write off the bad debt. Banks, on the other hand, insist that their institutions want to help, rather than end up in the real estate business.
“A foreclosure is not good for the customer, not good for the community and not good for us. It’s always going to be the last option,” Unger said. That said, banks have lately run into problems for rushing the foreclosure cadence.
Rushing the cadence
Earlier this month, banks came under scrutiny in the wake of the disclosure that many had used “robo-signers,” or people who rushed to sign thousands of documents a day without reviewing the details.
“Some of these practices can deprive homeowners of their legal right to save their homes,” said Rob McKenna, Washington state attorney general.
As a result, the nation’s largest mortgage company, Bank of America, temporarily halted foreclosures. The attorneys general from all 50 states launched an investigation. Other large lenders, JPMorgan Chase, Ally Financial Inc. and PNC Services stopped foreclosing in up to 23 states.
However, the hoopla has largely died down, as Bank of America is pushing ahead with a new wave of foreclosures, according to The Associated Press.
Some say putting the blame entirely on banks and the government isn’t fair. After all, homeowners sign a contract, a note and deed of trust that shows an obligation to make the payment, said Mark Saftich, a senior mortgage director for Director’s Mortgage Inc. in Vancouver.
“That’s why there is so much paperwork at the closing table,” Saftich said. “It is signed by all parties stating they will pay the lender the amount over the life of the loan with a clause that says, if it’s not paid, notice will be given and the house will be foreclosed.”
Jacqueline Freeman said the notion of foreclosure never entered her mind when she and Joseph purchased their home and 10-acre farm in 2003.
Lessons learned
But the Freemans say they’ve learned some hard lessons about trusting mortgage providers and the government’s HAMP program. “The main thing is, it doesn’t stop the clock on the foreclosure, in spite of paying out all that money,” Jacqueline Freeman said, adding that she remains optimistic about saving the farm.
The Freemans put in a call to Sen. Patty Murray at the height of the senator’s election rebid. Murray’s office has pledged to help the Freemans, who say they will do whatever it takes to avoid foreclosure, Jacqueline said. “We are fine, upstanding, taxpaying citizens with a farm,” she said. “It’s not just a house. It’s our business and everything we do.”
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