ROBO SIGNED DOCUMENTS, WILL IT MAKE IT’S IMPACT IN FLORIDA?
The ROBO signed documents may create legal trouble for homeowners for years. Mortgage documents are being invalidated by courts in Florida, furthermore, insurers are hesitant to write policies, and judges are blocking banks from foreclosing on certain homes based on the invalid documents. Some law firms are intentionally removing or withdrawing previously filed documents.
The issues with improper mortgage documents that have been labeled as “robo-signing,” have led some of the nation’s largest banks, including Bank of America Corp., JPMorgan Chase & Co., Wells Fargo & Co., and other lenders to temporarily to freeze foreclosures nationwide last fall.
Initially, ”robo-signing” had been limited to the affidavits that the banks would file in support of their Motions for Summary Judgment during the foreclosure case. In Florida, the affidavit in support of the Motion for Summary Judgment is used to have the Court grant the Summary Judgment and enforce the banks right to foreclose the home.Lenders, services and trust managers allege that they were so overwhelmed with the volume of foreclosure filings and documents to review that they took shortcuts.
Some of the common issues that have led to the “Robo Signing” are executions of affidavits by individuals who did not review the files, execution by employees of the law firms who are representing the bank, improper notarizations and name by dozens of different people, improperly notarized or signed without a review of the facts in the paperwork and even affidavits that pertain to other loans.
Finally, the fall back of “Robo Signing” is huge because if the property is not properly foreclosed on, then the title insurance companies may not be willing to insure title to the property and then that will impact of real estate sales.
Ray Garcia, Esq.
Board Certified in Real Estate Law by the Florida Bar
OPTIONS WHEN IN FORECLOSURE IN MIAMI, FLORIDA
What options do I have if my house is being foreclosed? There are several options a person facing foreclosure might take. It mostly depends on what the person wants. For example, when I meet with clients for the first time, I usually inquire whether they are occupying the home, or whether they are renting the home. In Miami-Dade County, if a house is a homestead, the parties will be referred to mediation to review loss mitigation solutions. If the person is not occupying the home, mediation is not a requirement; however, the court may on its own discretion order mediation to see if there are any repayment plans which can be taken advantage of, to enable the person to keep the property, even for investment purposes. There are several loss mitigation solutions among them: short sales, deed in lieu, “cash for keys”, and loan modifications. All of these options can be offered by banks depending on several factors, like income, expenses, amount owed, use of the property and even the length of default. Before making a decision as to what approach you plan using, consult an attorney that specializes in real estate law
Ray Garcia, Esq.
Board Certified in Real Estate Law
By the Florida Bar
www.raygarcialaw.com
How a Loan Modification May Benefit YOU!
With the way the economy is on it’s major down fall, who wouldn’t enjoy less expenses? I mean, I know I would! And I’m sure you guys have heard your neighbors say the words “Loan Modification” at least once or twice then wondered what those two words meant. Well, don’t wonder any longer! Here’s how those two words may benefit YOU!
The Simple Basics of a Chapter 7 Bankruptcy in Florida
What are some benefits from filing a chapter 7 bankruptcy? Chapter 7 bankruptcy is one of the top forms of bankruptcy in Miami, Florida. A person may be considering bankruptcy because of harassing creditors, garnishment, repossession, foreclosure, lawsuits, illness or disability, loss of job/income, or divorce. Financial situations have changed all throughout the world and many people are unable to keep up with bills and payments they were once able to afford. Rather than being stressed with major bills piling up and marital problems arising, many find the best option being to file bankruptcy under this chapter, where the debtor can start new and receive a discharge of all owed debts.
A chapter 7 bankruptcy is generally filed by a person with a large amount of medical and credit card debts, does not have very much income, and does not own much property. The individual who would qualify for a chapter 7 bankruptcy would be a person with little or no assets, if you were to have many valuables, creditors could try and take those goods away. A bankruptcy allows you to discharge debts and bring families freedom from the stress they may be going through. After a couple of years of filing a bankruptcy you could be eligible for new loans, to start fresh. You could now realize what you are able to afford and not get stuck in a stressful situation. You can learn how to correctly manage money and not find yourself in a stressful financial situation again. You will be able to build your credit back up, and you will not hear the endless phone calls from creditors harassing you. If you are facing any wage garnishments, a chapter 7 bankruptcy would put an end to that, along with stopping any scheduled sale dates on a foreclosed home you may be losing. When you are finding it close to impossible to get by your day by day living expenses, and the situation you are finding yourself in may seem unbearable; a chapter 7 bankruptcy could be something you may want to consider.
Good News in Florida Loan Modifications for Homeowners serviced by Ocwen Financial Corp.
The Palm Beach Post in Florida had a very interesting article about the future loan modification plans of Ocwen Financial Corp. We quote the article as follows:
Lenders have long resisted cutting loan amounts for struggling homeowners, fearing it would entice more borrowers to default.
But one locally based servicer, Ocwen Financial Corp., believes it has found a solution.
The company is rolling out a new loan modification plan for underwater borrowers that lowers the amount owed on the loan – thus reducing the monthly payment – but asks for a share in the appreciated value when the house is either sold or refinanced.
The kickback to the lender may deter people who can afford to make their payments from defaulting, while giving an incentive to either the lender or investor to modify the loan.
“We think this answers some of the critics who say that by reducing principal, you are rewarding imprudent borrowing behavior,” said Ocwen Executive Vice President Paul Koches. “What we see is unprecedented delinquencies, and we’re doing our best to resolve them
Seven Hardship Situations Lenders Consider Valid
1. Payment Increase
Your mortgage payment has increased substantially from one month to the other. It was a shock to realize that your payments would adjust to the amount that they have reached, or, if you did realize they would, you could not reasonably foresee the catastrophic economic effects of the mortgage crisis on the economy. Another devastating reality is that your home value has fallen so drastically, it has diminished your options, such as refinancing the loan. Ramifications from this situation have caused severe economic depression in your business community, and due to the real estate collapse and its far reaching effects on lending, it has left you financially unable to recover.
2. Job Loss/Layoffs/Pay Reductions
Be sure to include your spouse and/or any person who normally contributes to your monthly household income. Review your pay stubs and hours worked. Gather any and all memos or notices received from your employer detailing your layoff or reduction in pay. Carefully note income declines over the last 1-2 years, and note the events which caused it, and the effects this has had on your economic situation and family.
3. Underemployment
Recently obtained employment pays you significantly less than your recent job. The economic down turn has had a serious impact on the current salary your new employer is willing to pay you. If you owned your own business, and suffered a significant loss of revenue, or lost your business all together, make certain you explain the situation to the Bank in great detail and have documentation readily available in case they request it. It is important that you reassure the bank that although you have lost a substantial amount of revenue or lost your business, you have the ability to reasonably sustain a regular monthly payment of a lower dollar amount.
4. Declining Business or Revenue
Sales are down. If you own your own business, are self employed, work for commissions, bonuses or tips, or earn income in any way other than as a company employee receiving a regular paycheck, and your income has decreased. A detailed profit and loss report prepared by a certified accountant will help you detail your economic losses to the Bank.
5. Illness/Injury
There are undisclosed yet obvious stress related effects of financial stress: clinical depression, marital estrangement, and increased alcohol and drug dependency and abuse. People can’t cope, so they start checking out. Subtly, these problems wipe out the very tools they need to survive financially. The physical, emotional, and psychological strain on people due to the financial crisis has worsened under the mortgage crisis. This has also contributed to higher medical expenses, attributing to the inability to pay their mortgages. A sick loved one, a death in the family, or a child with special needs can also take a financial tool on the family. Note that the Bank will take all of these circumstances into consideration, but ultimately your Lender wants a sense of security that you have a steady income to support a loan modification despite your obstacles.
6. Divorce/Separation
Divorce is a financial wipeout. Most married couples experience financial strain – rich or poor – it is common. In these times, two heads are definitely better than one. If there is any way you can postpone divorce, swallow your pride and hang in there. Couples in divorce nowadays are faced with a rude awakening – their homes are worth less than their mortgages. For many, if not most , divorce now is a splitting of debts – not of assets. Financial survival dictates that couples stay together if possible. Divorce can mean financial suicide. Two incomes can mean having a home vs. not having a home. Nevertheless, if you have been divorces or separated, you have a definite financial hardship. Be prepared to provide the Bank a copy of your divorce settlement.
7. Disaster
Fires, auto accidents, floods – any act of God, whether insured, uninsured, or partially insured. Setbacks to your cash-flow, or ability to generate cash flow are valid hardships.
Cash for Keys
The program called “Cash for Keys Program” is probably the best-kept secret in the banking industry. This program is probably offered by 90% of lenders but, lenders never offer you this program if you don’t ask about the program. The program is simple pay the homeowner to leave his home with the condition that they leave all fixtures in the property. It makes it easier for both parties; the bank has an easier re-sale having the fixtures and the homeowner does not have to come out of pocket for moving expenses.
Mainly homeowners who deal with the bank’s realtors never hear about this program. The bank’s realtors have the authority to offer the money, but never do unless the homeowners request for it. The usual result is that the realtor never really has a chance to speak with the homeowner before he is evicted so, the properties are stripped from all fixtures, appliances, A/C units, copper water pipes, cabinets and sometimes even the electrical wiring in the walls.
The Cash for Keys Program can happen after the lender agrees to accept a Deed in Lieu of Foreclosure or by an eviction after the foreclosure sale. In other words, the homeowner must ask for the money or never hear about it. So, it is in your hands to ask the realtor that contacted you, or the Bank representative that is calling you about the program. If they say they don’t offer it, I would get a second opinion from another representative or supervisor.
The amount of money varies in all cases. At many times agents are instructed to start as low as possible, sometimes even as low as local value of one month’s rent. In some occasions lenders have paid up to $4,000 if appliances and fixtures were in.
It is a simple decision just like the lender decided to foreclose on you. Now it is your turn to get some control back. In conclusion, if you are offered the program do not leave the property until the money they offered you is in your hands.
Motion for Summary Judgment in a Florida Foreclosure
In order for a bank to proceed with a foreclosure and obtain a final judgment of foreclosure, the specific bank and or servicer bringing the action, must provide evidence that it owns and holds the note and mortgage. Additionally, the bank must verify that the amounts due and owing are correct, and the amount of the final judgment is an accurate reflection of the debt owed by homeowners.
To obtain a final judgment of foreclosure a bank will typically file a Motion for Summary Judgment and Affidavit of Indebtedness (also referred to as affidavit of amounts due and owing or affidavit in support of motion for summary judgment). This Affidavit of Indebtedness must be executed by a representative of the bank with personal knowledge of the loan in default. The affiant must have reviewed all loan documents and must have personal knowledge of the loan history, including how many months the homeowner is behind, what are the costs of the foreclosure, what is the interest owed and what the principal balance of the loan is. If the individual that executes the Affidavit of Indebtedness does not have personal knowledge of the above described information, the affidavit is fraudulent and the bank should not be allowed to proceed with the foreclosure. Any final judgment of foreclosure obtained with a fraudulent affidavit is voidable and may be set aside under the Florida Rules of Civil Procedure.
As South Florida is at the forefront of the foreclosure epidemic, it is imperative the homeowners know their rights and are aware of the legal standards banks must reach in order to properly foreclose on a residence. Contacting a foreclosure defense attorney is the best way to protect these rights and assure that your bank has not fraudulently proceeded with a foreclosure.
RENTERS AND FORECLOSURE
Renters are being seriously affected by foreclosures almost as much as homeowners these days. The downfall of the mortgage industry has resulted in millions of foreclosed homes. Most of the occupants of these foreclosed homes are the homeowners themselves, but a great number of the occupants are renters who discover, often with no warning, that their rented house is now owned by a bank, which wants them out.
The usual foreclosed home may have originally been occupied by the owner, but often it may be owned by investors hoping to profit from the rental of the home. Due to the downfall of the real estate market, these investors/homeowners have found themselves unable to rent these properties and subsequently unable to pay the mortgage. When the owner of the property fails to pay the mortgage, the Bank becomes the new owner after a foreclosure proceeding. When the bank becomes the owner, many tenants have no idea that the property has been taken at foreclosure. They continue to pay rent to the former owner, who often pockets the money. Considering the banks are stuck with a staggering number of foreclosed properties that they can’t sell, the bank does not communicate with the renter in a timely fashion and only come in contact with them when the eviction process has begun.
Before May 20, 2009, most renters lost their leases upon foreclosure. The rule in most states was that if the mortgage was recorded before the lease was signed, a foreclosure wiped out the lease (this rule is known as “first in time, first in right”). Because most leases last no longer than a year, it was all too common for the mortgage to predate the lease and destroy it upon foreclosure. These rules changed dramatically on May 20, 2009, when President Obama signed the “Protecting Tenants at Foreclosure Act of 2009.” This legislation provided that leases would survive a foreclosure — meaning the tenant could stay at least until the end of the lease, and that month-to-month tenants would be entitled to 90 days’ notice before having to move out.
Renters should be cautious when remaining in a property after the bank has taken ownership via a foreclosure proceeding. Many banks hire local real estate agents or management companies to try and intimidate the Renter and force them out of the property. No matter what type of tenancy you have, it is illegal for the bank to treat you as a trespasser or attempt to lock you out of the property by threatening to change the locks or shut off utilities. Be aware that tenants in foreclosed properties holding a valid Lease have the same rights as the previous owner of the property. Renters have rights, exert them.
Loan Modification v. Bankruptcy in Florida
If you are a South Florida homeowner, and are in foreclosure, you may have trouble meeting other financial obligations besides just your mortgage. Your first step would be to consult a Miami Dade Foreclosure attorney. If however, a final judgment has already been entered and your Miami-Dade County property has a foreclosure sale date, bankruptcy may be an option. If your property has been foreclosed, the lender may proceed with a deficiency judgment to recover the difference between the final judgment entered and the current market value of your property. Like most South Florida Homeowners, this amount is likely to be very large due to the downward spiral of the real estate market in the last couple of years. The deficiency judgment, coupled with everyday living expenses may prove too difficult to meet. If this is the case, filing for bankruptcy may be the most viable option.
Your income and financial position will determine whether you are eligible to file for bankruptcy. In order to determine eligibility, a bankruptcy means test is applied to your financial situation. When determining eligibility several factors are considered in conjunction with your household income. The means test considers household income, household size, living expenses, the number of vehicles operated by your household and whether you are married, among others. The aforementioned factors are compared to averages of the State and County in which you reside published by the US Government. Your financial information determines the US Government deduction standards to apply. To determine if bankruptcy is an option for you, consult a South Florida attorney to discuss all your options.
Ray Garcia, Esq.
Board Certified in Real Estate Law by the Florida Bar
