Miami Foreclosure Lawyer Blog

Miami Foreclosure Lawyers Unravel More Bank Manipulations

Sun, 19 May 2013 11:25:04 -0500

The bottom of the barrel ethics of big banks appear to have reached new lows, as evidenced by a recent confidential government investigation of JP Morgan. It was uncovered by The New York Times and alleges schemes designed to manipulate the country's energy markets.

Our Miami foreclosure lawyers understand that possible sanctions are being weighed by the Office of the Comptroller of the Currency, which further alleges that bank administrators were not only complicit in what was happening, but at least one is believed to have lied about it under oath.

JP Morgan is the nation's biggest bank, and is currently being investigated by no fewer than eight federal regulatory agencies on a number of fronts. Previously viewed as a "model citizen" in the banking world, JP Morgan has proven itself no different when it came to the scandals that plagued other lenders in the midst of the housing crisis - and no apparently in many other arenas as well.

It doesn't seem any real consequences are on the horizon, as the bank is continuing to experience some of its highest ever earnings this quarter, with record profits tabulated over the last several.

The enforcement staff with the Federal Energy Regulatory Commission, also known as FERC, has indicated that it will likely pursue some kind of penalty against the firm over its energy trading activities in the electric markets of both Michigan and California. Allegedly, traders offered to sell the energy at prices that were misrepresented to appear attractive, when they actually were not.

Another branch of the investigation involves the firm's integral role in the creation of something called credit default swaps. This is a type of agreement in which the seller of a swap compensates the buyer if there is a default. The problem was that many of these CDSs were purchased by anyone and everyone, even when they had no direct insurable interest in the loan. There are referred to as naked CDSs. So the payment ultimately received when the loan defaulted was far less than whas the original loss of the loan. These transactions require no government oversight, and this lack of transparency was reportedly part of the reason this country landed in a recession.

For this, the bank and the executive in question could both be heavily fined.

In addition to this action, the co-chief operating officer who had been in charge of cleaning house in the firm's mortgage division following the housing bubble collapse has announced his departure.

There is also another investigation into the firm's credit card collection efforts, which reportedly involved a heavy reliance on faulty documents. Allegedly, the bank has been routinely suing delinquent customers on the basis of inaccurate records - and there is evidence they knew those records were inaccurate. (Sounds like a familiar modus operandi to our foreclosure attorneys.)

In yet a separate investigation, there is apparently evidence that the bank failed to adhere to federal law in reporting suspicious transactions as it pertains to ponzi scheme felon Bernie Madoff. That case, regulators say, revealed a host of recurring problems at the firm, which has taken on a combative approach when it comes to federal regulators.

Zombie Foreclosures in Miami Haunting Homeowners

Mon, 13 May 2013 10:22:20 -0500

Florida has become beset by the undead - mortgages, that is.

Our Miami foreclosure lawyers understand that these homes, blighted and abandoned, have been campily named "zombie foreclosures."

The reason being is they are not quite "dead" in that the cases aren't closed. Yet neither are they "alive" in that the banks have chosen not to actively pursue them.

It's a very scary prospect for the homeowners who are evicted from their homes after enduring a foreclosure, only to have the bank halt the process because they don't want to pay the fees for back taxes or liens or code violations. Yet neither do the banks inform the homeowners that the process has been stopped, which leaves the unwitting homeowner on the hook for all those fees.

The home falls into disrepair. Property values of nearby homes are dragged down.

So while the homeowner has moved away, thinking the case is "dead," a done deal, their credit scores continue to be shredded and their debt continues to stack up. Many end up being forced to file for bankruptcy.

The worst part of all of it is that because the homeowners don't know that the home is still in their name and that the bank has stopped pursuing the foreclosure case, they don't realize that they still have a right to be living in that home. At least if they were going to be paying the fees, they should have the benefit of living in the house.

This is not an isolated incident.

Housing data firm RealtyTrac, which analyzes foreclosure activity across the country, reports that there are some 302,000 zombie foreclosures nationwide. That's a conservative estimate.

That accounts for anywhere from 35 to 50 percent of all foreclosures, just depending on which state we're talking about.

It's probably much higher, especially when you consider that in Florida, the firm didn't include foreclosures that had been in the process longer than 850 days.

Florida has the highest number of "zombie foreclosures" in the country, with roughly 91,000, according to Vice President of RealtyTrac, Daren Blomquist. He recently discussed the phenomenon with Chicago Tribune Staff Writer Mary Umberger.

Illinois was the next-highest, with about 32,000 and California followed with about 29,000.

Blomquist said in most of these cases, banks typically make a deliberate decision not to continue pursuing the foreclosure, even after it's been initiated and the homeowner has moved out.

Typically, it comes down to a few different factors: The length of the foreclosure process and also the simple fact that in some cases, it's not in the bank's best interest to press on with the case because of the holding costs.

Many cities have started cracking down on the banks and imposing fines when foreclosed homes aren't properly maintained. But the banks have found a loophole: If the home isn't actually foreclosed upon, it's still in the homeowner's name and therefore still his or her responsibility to maintain the property.

While the types of properties with the potential to become "zombies" run the gamut, most are older homes that are less attractive to investors. Newer homes require less work to rehab and flip.

If you suspect you may be the victim of a zombie foreclosure in Miami, contact our offices as soon as possible to learn more about how we can help.

Former DocX President to Serve At Least 3 Years Prison

Sat, 11 May 2013 09:40:59 -0500

She was once president of a successful mortgage document processing firm, called DocX LLC.

But for at least the next three years, she'll be known by her prison inmate number.

Our Miami foreclosure lawyers have learned that Lorraine Brown has been sentenced to a minimum 40 months in prison by a Michigan court on a charge of racketeering, in connection with a long-running robo-signing scandal. She could serve as much as 20 years behind bars.

The Michigan Attorney General was one of the few to aggressively pursue charges against Brown, though her crimes reverberated throughout the country. Federal prosecutors in Florida also pursued charges against Brown, whose company had been acquired by the Jacksonville-based Lender Processing Services Inc. The state of Florida did virtually nothing to thwart her efforts to run over the rights of hardworking homeowners.

LPS later agreed to settle for $2 million for any role it may have played (pittance compared to what the company rakes in each year) and Brown later pleaded guilty to one count of conspiracy to commit mail and wire fraud. On that charge, she faces a maximum of five years in prison, though she has yet to be sentenced.

To give you an idea of the scope of the wrongdoing that Brown and her firm perpetuated, consider that in Michigan alone, some 1,000 falsified mortgage documents were filed with county registers of deeds throughout the state.

The primary transgression was later identified as something with which we've all by now become familiar: robo-signing. Essentially, DocX employees were instructed by Brown to fraudulently sign another person's name on key mortgage documents. This in turn would allow those documents to be processed more quickly, which allowed the foreclosures to be processed faster, which in turn meant that DocX was paid more money.

But it meant something very different for homeowners. It meant that foreclosures were filed and carried out without any real proof that banks had the proper legal authority to do so.

Internally, Brown and her administrators called this "surrogate signing." Sounds so much nicer, doesn't it? As if she and her firm were making some sort of sacrifice to help out.

For homeowners, the harm was extensive.

Following the issuance of her sentence, Brown was immediately remanded to the Michigan Department of Corrections to begin serving her sentence.

The investigation by Michigan authorities was first launched back in the spring of 2011, following a 60 Minutes broadcast showing that thousands of mortgage documents had been signed by a woman named "Linda Green." However, there were a great many variations on that signature, which was discovered on foreclosure documents throughout the country.

County officials in Michigan began pouring over their records at that point, finding that many of their deeds contained that same signature. That's when the state attorney general got involved.

We applaud the fact that this case was seen through to the end, and that the consequences for Brown will be substantial. We only wish we could say the same for so many others who perpetuated such egregious and long-lasting wrongs here in Florida.

Banks' Foreclosure Lawyers Face Few Repercussions

Thu, 09 May 2013 09:04:38 -0500

In the wake of Florida's mortgage and foreclosure crisis, accountability has been sought at many levels.

Our Miami foreclosure lawyers know that the banks have paid millions in settlement agreements and mortgage servicers have been fined and even criminally charged with filing fraudulent bank documents.

Those punishments were far from sufficient, in our eyes, but at least they were something.

We can't say the same for the attorneys and law firms who had been working for the banks. Of course, we can't hold lawyers accountable for the sins of their clients. But the actions of these individuals and firms go beyond that.

In fact, their actions even forced the banks to temporarily halt foreclosures. It's been well-documented that these attorneys handled hundreds of thousands of foreclosures. They were churning them out with little regard for the individual facts of the case. Even worse, there is ample evidence that documents were falsified with phony signatures, records were improperly backdated and homeowners weren't given proper notice of the foreclosure filing. The onus here lies squarely with the bank attorneys.

Some critics have accused both the Florida Bar and Florida Attorney General Pam Bondi of failing to act in any decisive manner regrading these wrongdoings.

Bondi said she was unable to proceed because an appellate court ruled an investigative subpoena from her office could not be honored because her office didn't have the authority to investigate those matters per Florida's unfair trade practices law. Essentially, she says that meant that any discipline against these lawyers would have to come straight from the state Bar. A proposed bill in this year's legislature that would have closed this loophole has stalled.

But there are other avenues her office could have pursued, without basing the claim on the unfair trade practices act. For example, prosecutors in her office have the option of going after law firm subsidiaries or even pursuing the matter from a criminal standpoint.

Instead, her office did nothing.

Of the 330 attorneys the Bar has so far investigated, only two have faced disciplinary proceedings.

Given that Florida had the country's highest foreclosure rate in 2012 - one out of every 32 homes - the lack of action is puzzling.

Since mid-2011, Bondi's office has received some 200 complaints from homeowners relating to eight foreclosure law firms representing the banks. Of those, nearly half were filed after the appellate court made its ruling on the investigative subpoenas.

In one of those cases, a couple said they began receiving eviction notices from a law firm, even though mortgage records showed they had kept current on their mortgage payments. They weren't informed that two other companies were hired to have their utilities shut off and put their home on the market. Notices were posted demanding the couple vacate their home.

Eventually, the couple's lawyer was able to find the root of the mistake, proved that the bank had no standing to file a foreclosure and that the law firm handling the bank's claim had failed to do any research whatsoever on the property before pressing forward with the case.

All this leaves our Miami foreclosure lawyers left to wonder whether the homeowners we represent are going to be any safer moving forward than they were before this mess began.

So far, the evidence would suggest they are not. In some cases, we still see evidence of bank attorneys failing to properly research whether a homeowner deserves a foreclosure filing. We continue to see cases where homeowners aren't given any advance notice of the filing. And all too often, we're seeing cases where the bank is pursuing a foreclosure, even as the homeowner is desperately trying to negotiate a home loan modification agreement.

Florida Foreclosure Payouts Pale in Comparison to Consultant Checks

Tue, 07 May 2013 06:09:34 -0500

Before anyone begins applauding banks or federal regulators for righting the wrongs of the foreclosure crisis through a recent $9.6 billion settlement, consider this:

The average homeowner who was wronged by lenders will receive anywhere from $300 to $1,000, while the consultants originally tapped by the banks for the botched foreclosure review received more than $2 billion.

Our Miami foreclosure lawyers can't say we're surprised by the glaring disparity. Rather, it's merely the latest in a long list of ways in which homeowners have been given unequal treatment by institutions deemed not only too big to fail, but also too big to prosecute.

You may recall that the foreclosure review was part of an earlier settlement ordered by federal regulators against more thank a dozen lenders. The banks were ordered to hire independent consultants who would come in, review the loan files and determine which foreclosure cases warranted compensation, and which did not.

Several problems emerged with this whole process. First, the consultants weren't actually "independent," as they were being paid astronomical sums by the banks. As such, they were skewing the results in favor of the banks, which in some cases had provided "default" answers to the forms these consultants were required to fill out.

These consultants were paid about 20 percent of the entire settlement amount, despite the fact that they were found to be egregiously unethical. Meanwhile, homeowners got a pittance. Of that $9.6 billion, only $3.6 billion was given to some 4 million homeowners.

The rest of the money has gone to credit banks for negotiating loan modifications and the like to help people stay in their homes. Except banks are too often taking the back door out with this, receiving credit for short sales - which don't keep people in their homes - or forgiveness of second mortgages, which do nothing to help people keep up on their payments.

As a further slap in the face, federal regulators are refusing to release the solid evidence of consultant impropriety to the homeowners who want to go after the banks in court.

Essentially, the government is helping to protect the banks from further litigation, to the detriment of law-abiding taxpayers.

Regulators have even attempted to downplay the rate of consultant error that was later found with a government audit. It fluctuated from 6.5 percent down to 4.2 percent. However, a review by the Wall Street Journal found it was actually somewhere in the neighborhood of 10 to 21 percent.

In the case of JP Morgan, for example, the consultants reported that the bank had only erred in 0.6 percent of foreclosures - a figure that clearly defies all logic, especially when you later learn that some consultants were given gift cards worth hundreds of dollars by the banks for "expeditiously" completing certain reviews.

Because let's not forget that what started all of this in the first place: The banks' abhorrent business practices, from signing over mortgage to anyone with a pulse to filing fraudulent and forged paperwork in countless foreclosure cases, resulting in people being wrongfully evicted from their homes with a foreclosure-stained credit.

Florida Foreclosure Bill Green-Lighted By House

Sun, 05 May 2013 05:32:15 -0500

A bill that would fast-track foreclosures in Florida - denying key due process rights to homeowners - has been given the green light by state House representatives and is now awaiting a vote in the Senate.

Our Miami foreclosure lawyers have been closely tracking the movements of this bill, and grow increasingly troubled the farther it proceeds.

In what's been a nail-biting ride, House Bill 87, introduced by Rep. Kathleen Passidomo (R-Naples), was approved by a vote of 87 to 26 - less than a week before the close of the legislative session.

Similar measures in various forms have been debated over the previous four legislative sessions.

The one piece of good news is that the bill has only a handful more days before it will find itself in the same position as last year: Approved by the House, stalled in the Senate.

Still, Passidomo expressed hope that it would move quickly through the Senate.

On the surface, this bill might seem common sense. After all, Florida does have a glut of foreclosures and they are each trudging slowly through the system. But a big part of that is the banks' efforts to stall.

As we previously reported in our Foreclosure Lawyer Blog, many banks have taken to simply abandoning foreclosures in order not have to catch up on the property taxes and maintenance fees. Biggest problem is they are doing this only after they have evicted the borrower. Oh yeah, and they neglect to notify the borrower of this as well, allowing the bills to stack up against the unsuspecting homeowner and leaving neighborhoods to decay with blight.

But the other reason it's dangerous to speed up the process is that when you do so - especially in the ways proposed by Passidomo's bill, you end up sidestepping important due process rights.

Judges in Miami have already been dangerously sidestepping some of these in an effort to plow through as many cases as possible in order to make some noticeable headway.

It seems we forget in all this that the homeowners weren't the ones to blame for the housing crisis. It was the shady - sometimes illegal - practices of these financial institutions that led us here. And yet, we are continuing to punish the homeowners with measures such as this.

For example, the bill holds that if a homeowner can prove his or her house was seized in a fraudulent foreclosure, he or she would only be entitled to monetary compensation. They would not be entitled to get their home back. So essentially, even if the foreclosure was the result of a gross error, the process can't be undone.

The ability to correct these kinds of mistakes is an essential power of our judicial branch. HB 87 would strip that away.

The bill prompted 10 members of the House to speak. Supporters of the measure claimed that it would reduce the number of years a bank could pursue a deficiency from five years down to one.

But the damage it would do outweighs any benefit. Another example of this is in the provision that puts the onus of proof on the homeowner. So instead of the bank being responsible to prove why the home should be foreclosed upon, it becomes the homeowner's responsibility to prove why they should be allowed to keep their home.

This defies the very basic principals of the justice system.

Bank of America Foreclosures Questioned Amid Claims of Error

Fri, 03 May 2013 15:20:02 -0500

A joint investigation by the Center for Investigative Reporting and NBC Bay Area has raised significant questions as to the validity of Bank of American foreclosures in the Bay Area of California - and by proxy, the rest of the country.

Our Miami foreclosure lawyers understand that investigators found that in spite of a number of billion-dollar settlements and new laws and regulations that are intended to tighten mortgage industry practices, many of these banks - and Bank of America in particular - continue file documents that are invalid in an effort to push through foreclosures, even though they lack any legal right to do so.

In this microcosm of the San Francisco-area, the two investigative entities tapped the experience of a certified fraud examiner, a forensic accountant, a former city property record analyst and a private auditor to review a host of foreclosure records.

What those individuals found was that Bank of America and all of its subsidiaries were blatantly avoiding correct procedure in the course of foreclosure filings in the area. Some of those actions included altering property record dates and falsifying loan transfers. These actions allowed the bank to improperly initiate foreclosures and also to collect fees and payments on loans that it didn't actually own.

If anyone thinks these kinds of actions are unique to San Francisco, they're naive.

Most homeowners, just by looking at their property records, won't be able to tell whether the records are falsified. In a lot of cases, these investigators found, the bank didn't have them when they initiated the foreclosure, so they simply made them up. It wasn't difficult for them to make them appear official, and who was going to call them on it?

Of course, this illustrates why homeowners facing foreclosure everywhere need to secure the services of an experienced foreclosure lawyer. Having just any attorney will not cut it when wading through an industry that is so incredibly convoluted.

In fact, as the forensic accountant was quoted as saying, there has been a "bastardization" of land records - the true representation of property ownership - that could take decades to truly sort out.

Bank of America says that it has made significant improvements in its processes over the last three years, adding that some of the falsification claims have been exaggerated.

But consider this: An audit last year conducted by the San Francisco Asessor-Recorder's office found that nearly 85 percent of foreclosures in 2009 and 2011 had legal violations. Those include everything from not notifying homeowners of their default to transferring loans to which they have no actual legal rights.

Why would banks do this?

Simple: money.

Banks make a profit by cutting these corners.

And the borrowers? Some of them report applying for loan modifications nearly a dozen times and getting nowhere. Many of them continue to get the runaround.

Many times in these foreclosure cases, our attorneys will demand proof that the bank has the right to close. In some cases, they can't produce that. At the very least, that buys you time and it may give the bank a greater incentive to work out a loan modification.

We help you negotiate from strength.

Big Banks Accused of Price-Fixing Interest-Rate Swaps

Wed, 01 May 2013 14:33:03 -0500

The world's biggest interest-rate swap broker, based in London, is under investigation by U.S. regulators for potentially working with a handful of the world's most powerful banks to tweak the international benchmark figure used to calculate the prices of interest-rate swaps.

Interest-rate swaps are figures used by major companies and cities and even sovereign governments to aid in managing their debt. The scale of use is about $379 trillion. To give you an idea of how much money we're talking about: It's 100 times the size of the United States federal budget.

Our Miami foreclosure lawyers know all of this is closely related to the previously revealed Libor rate price-fixing scandal that stemmed from banks that were fraudulently deflating or inflating their rates in an effort to either appear more creditworthy than they were or to profit from trades.

To give you an idea of why this is relevant, some of the American markets that rely upon the accuracy of these rates are:

Mortgages;

Student loans;

Financial derivatives;

Other financial products.

Those believed to have been a party to this latest price-fixing scandal include some familiar players, including Bank of America, JP Morgan Chase and UBS. Additionally Barclays, which was involved in the Libor scandal, as well as the Royal Bank of Scotland, are also alleged to have been involved.

Many of these companies have already had to pay many millions of dollars for their role in the Libor scandal. But as we have previously mentioned, these penalties are usually a drop in the bucket to these companies, and it's hardly been a deterrent.

Many are describing this latest accusation as a "manipulation of a manipulation," as this figure, as the Libor already sets the interest-rate swap figures.

Rolling Stone Writer Matt Taibbi had a nice way of explaining this: Picture paying $25 for a not-so-good peanut butter and jelly sandwich because a number of agriculture businesses got together to fix the prices of peanut butter AND peanuts.

In the case of the Libor, traders were found to have submitted falsified daily numbers in exchange for such niceties as a bottle of champagne and day-old sushi. We're talking about rates that literally affect the lives and livelihoods of billions of people across the world.

Morals? Apparently there is such thing in the banking industry.

Punishment for this? Barely. U.S. Attorney General Eric Holder conceded that prosecuting these entities to any real extent would have too great of an effect on world markets, meaning the economy could suffer.

So apparently, we are supposed to simply accept that some amount of manipulation or outright theft should be expected and tolerated.

Meanwhile, these financial institutions grow bigger and ever more powerful.

We wish it were still plausible to say that this is some type of radical conspiracy theory. It's not.

Essentially, the prices are set by companies that have a profitable incentive to falsify them.

So will this newest investigation yield much of anything? We aren't hopeful.

We do know that subpoenas have been sent to ICAP, the primary interest-rate swap setter, as well as more than a dozen member banks.

We'll be following the developments as they unfold.

Miami Foreclosure Blight Due to Banks' Refusal to Step Up

Sun, 28 Apr 2013 14:01:39 -0500

Thousands upon thousands of vacant properties in Miami, throughout South Florida and across the country have become neighborhood eyesores.

But our Miami foreclosure lawyers know you can hardly blame the people who were forced out, when the banks who pushed them are now refusing to complete the process so they won't be held responsible for the cost of maintenance and taxes.

So in the end, people have lost their homes, banks aren't making money with a subsequent sale and communities are suffering.

From the bank's perspective, it would actually cost them more to catch up on the property's back taxes and correct code violations than it would be to sell the property. So the banks get the judgement to foreclose, but then don't actually sell the home.

It gets worse.

Because the banks aren't finishing the foreclosure process, the former homeowner who had been kicked out is still legally being held responsible for any unpaid debt, repairs and taxes on the home - even though they aren't living there and haven't been for some time. Many times, former homeowners may have no idea whatsoever that this kind of debt is accruing in their name - until they go to purchase a vehicle or have their credit checked for some other reason.

Not only is this an example of abysmal ethics (not that we expected much from these financial giants), but consumer advocates point out that these institutions are flat-out ignoring guidance from the Federal Reserve indicating that lenders need to be notified when the foreclosure process is abandoned.

Questions of fair lending practices are also being raised because these situations are seeming to arise more frequently in minority and low-income areas.

How big is this problem?

According to RealtyTrac, significant. About 35 percent of the 1 million or so homes in the foreclosure pipeline are vacant with the servicer not having taken back the title.

Three years ago, the Government Accountability office had estimated that there were somewhere between 15,000 and 35,000 abandoned foreclosures. Toady, there are approximately 300,000.

Back when the GAO issued its report, the indication was that this practice wasn't technically illegal under federal banking law. Therefore, government regulators said they were powerless to do anything about it.

Meanwhile, peoples' credit scores were being decimated. They couldn't get back in their homes, but they continue to suffer for it anyway.

So that's why last year, the Federal Reserve issued guidance mandating notification of borrowers when the foreclosure process is abandoned. At the very least, this would give borrowers the right to occupy the home while the process is in limbo and they're being forced to pay on taxes and upkeep.

A similar recommendation was handed down by the Office of the Comptroller of the Currency two years ago.

But banks aren't complying with these rules. Legally, there is no time requirement for them to do so. That means there is nothing to force them to comply - and a heavy hand seems to be what banks require in order to do the right thing.

Mortgage Lenders Under Fire After Reparation Checks Bounce

Fri, 26 Apr 2013 13:24:41 -0500

In the midst of the housing market meltdown, there were unquestionably families who were struggling to stay in their homes, with some having bounced a check or two.

The banks didn't care.

Now, as our Miami foreclosure lawyers have learned, the shoe is on the other foot.

The fact that the responsibility for the mortgage crisis falls squarely at the doorstep of these banks and their unscrupulous lending practices, has led to a number of billion-dollar settlements. The aim was to not only aid those who are continuing to struggle as a result of this fall-out, but also to offer compensation to those who were wrongfully and traumatically forced out of their homes.

Reportedly though, a number of those checks submitted to former borrowers have bounced.

These payments had resulted from a $3.3 billion deal reached after the failed foreclosure review process was abruptly halted by federal regulators as both ineffective and skewed in favor of the banks.

Payouts to some 4.4 million homeowners who had been foreclosed upon in 2009 and 2010 are slated. Wronged borrowers will receive checks of anywhere from a few hundred dollars all the way up to $125,000 - with the majority averaging about $1,000.

But almost as soon as those checks were issued, reports were filed claiming that a number of the checks had bounced. Clearly, these financial institutions have the funds to cover these checks. Presumably, bank presidents' paychecks aren't bouncing.

It appears that a consulting company that was hired to distribute the funds collected the money from the banks, but then failed to actually put it in the account from which the victims' checks were being drawn.

The banks haven't yet responded as to whether they will tack on interest to those customers who were given rubber checks - as they would no doubt demand were the situation to be reversed. We doubt it.

In addition to this debacle, a California consumer group, California Reinvestment Coalition, is alleging that a number of these banks are continuing the practice of proceeding with foreclosures against borrowers, while at the same time supposedly working to help modify the principal balance on those loans. This practice, called dual-tracking, is squarely against the agreement reached in a $26 billion national foreclosure abuse settlement deal last year. That same group alleges that providers of mortgage customers service also continue to violate certain state consumer protection laws.

What's especially troubling about this aspect is that banks were given $8.5 billion in credit toward their settlement debt in order to work with consumers to hammer out mortgage modifications and help people avoid foreclosures.

As we've previously reported, most banks are instead opting for short sale options, which technically aren't foreclosures, but they don't keep people in their homes either.

Of course, we can't say we're surprised that the banks have once again failed to hold up their end of the bargain. But it's high time federal regulators grew a backbone and started to do something meaningful about it.

Quickie Florida Foreclosure Bill Slips Through Another Committee

Thu, 25 Apr 2013 12:14:34 -0500

Florida Senate Bill 1666 would make it harder for struggling homeowners to hang onto their houses.

Banks and even judges are eager to ram this down our throats, as they want to clear the backlog of foreclosure cases that have piled up in Florida since the housing crisis first began to unfold several years ago.

Our Miami foreclosure lawyers know that the framers of this bill are overlooking the truly at-fault parties behind that backlog - and it's not the homeowners. Yet, that is exactly who would be punished should the measure be passed.

Despite all the evidence of how bad this bill is for Floridians, it continues to slip through committee after committee on its fast-track to the Senate floor. Most recently, the measure was passed in the Senate Judiciary Committee by a margin of 6-2.

Even lawmakers who remain staunchly opposed to the measure say there is a likelihood it will pass - which is why it is of critical importance for constituents to make their voices heard on this.

As you may recall, SB 1666 would:

Free banks of the responsibility to produce the actual mortgage or its assignments. In turn, homeowners have little to no chance of proving whether those documents are fraudulent.

Strip the reviewing judge of the ability to determine in chambers whether robo-signing is a factor in the case.

Take away the homeowner's right to petition for the return of the home if he or she later learns the foreclosure action only happened due to fraud.

Lawmakers are patting themselves on the back right now for tweaking one of the most controversial aspects of the bill, which involved forcing homeowners to rapidly piece together their defense or risk being booted from their home.

An amendment to the law would allow homeowners to file certain documentation arguing a valid defense, which would allow them to be removed from the fast-track process. However, if the other measures remain in place - such as the provision making it tougher to root out fraudulent bank records - fewer homeowners are going to be able to prove a valid defense before the process gets well underway.

And opponents of the measure say what is particularly troubling is the provision that homeowners who are victims of fraud won't be allowed to get their home back. They will only be able to seek financial compensation.

As one foreclosure defense attorney put it, why should the banks be above the long-held rule that someone wrongly deprived of property is allowed to later reclaim that property?

Additional criticism has focused on the fact that there was very little debate on the whole thing before the Senate Judiciary Committee passed it. While nine opponents had signed up to speak on the matter, only three were allowed to testify. One of those denied his opportunity was a retired firefighter who recently lost his home to foreclosure who claims the bank acted improperly. He lamented that not only had he traveled almost 300 miles to make his voice heard, his opposition is valid - and lawmakers should show the respect of at least listening before making their decision.

Review of Foreclosure Reviews: OCC Official Testifies Before Congress

Tue, 23 Apr 2013 11:32:03 -0500

Democrats in the Senate put federal regulators with the Office of the Comptroller of the Currency under scrutiny for failing to reveal more details about what those so-called "independent" foreclosure reviewers found in their short-lived roles.

Our Miami foreclosure lawyers understand a hearing was held recently before a Senate subcommittee.

As Sen. Elizabeth Warren (D-Mass.) noted, "People want to know that their regulators are watching out for the American public - not for the banks."

She said that not only was there a "cozy" relationship between the outside review firms and the banks, there was also a tight-knit relationship between the banks and the regulators.

The only way to ensure that the OCC did its job correctly, she said, is for the OCC to provide detailed information regarding what those reviewers initially found and what was reported back to the OCC - even though the OCC and the federal reserve ended up doing away with the review process in favor of a $9.3 billion settlement -- with $3.6 billion going straight to borrowers.

Of course, the primary reason for that latter action was the fact that many had not only raised significant questions about the efficiency of those review firms, but also their integrity. Inside information had been leaked that the review firms, which were being handsomely paid by the banks, were more often than not tipping the scales in favor of the banks.

Despite lawmakers' anger with both the OCC and the Federal Reserve, both agencies absolutely refused to turn over more information about what was uncovered in the two years those reviews were ongoing. The OCC's deputy chief counsel said the agency would agree to reveal details about the foreclosure review process - but only PRIVATE, with a stipulation that a report would later be submitted for public review. The deputy chief counsel posited that the details of those reviews aren't for public consumption because they are part of the regulators' bank supervision process, something they say is confidential.

Why are our taxpayer-funded federal regulators shielding the banks - the same ones we know ripped us all off?

The deputy chief counsel did concede that his agency had underestimated what it was going to take to carry out these reviews, and, given the chance to do it over again, regulators would move forward differently.

However, our Miami foreclosure lawyers have grave concerns about offering this agency the opportunity to "do it over again," if the situation unfortunately arose again - especially when it has failed to be forthcoming about what went so wrong this time.

The OCC has revealed that roughly $2 billion total was given to these firms to review foreclosures nationwide, and to ferret out those cases in which wrongdoing was inflicted on the borrower in the form of failed home loan modifications or wrongful foreclosure.

It's important to know exactly what those reviewers found because the media has been reporting vastly different error rate figures than the banks.

For example, while JP Morgan Chase & Co. was reporting the rate of errors worth of compensation for foreclosure abuses was just 0.06 percent, the Wall Street Journal, citing those who had actually conducted the reviews, reported error rates that were closer to 12 percent. Meanwhile, regulators were giving an overall error rate of 6.5 percent.

So, which is it?

Until the OCC starts providing some answers, we won't know.

Miami Foreclosure Lawyer Bruce Jacobs a Trusted Authority

Sun, 21 Apr 2013 10:29:43 -0500

Miami Foreclosure Defense Lawyer Bruce Jacobs has become an authority on the troubling and pervasive issue of foreclosure woes throughout South Florida.

In addition to teaching other foreclosure lawyers at numerous local conferences and training sessions, Jacobs, a former prosecutor, hosts his own weekly radio show called "Mortgage Wars" on 880/AM The Biz and is a member of Max Gardner's Army, which is a national group of lawyers who trade real-time, tactical information on foreclosure defense.

That is why he is a trusted voice when local and national news media seek insightful responses to the ongoing foreclosure crisis in Florida.

One of the more recent articles in which he was quoted was one by Miami Herald Staff Writer Martha Brannigan, who was chronicling an eventful week on the mortgage front, with new national consumer protection rules, the $8.5 billion settlement reached by the U.S. Office of the Comptroller of the Currency and 13 mortgage servicers and Bank of America's dispute resolution with Fannie Mae.

Jacobs was quoted on the issue of the OCC's settlement agreement. This was just after the federal regulator had agreed to toss it's previous "independent" foreclosure review process, which was not only costly but ineffective and far from independent.

At the time, some were marveling that the banks were being hit hard by this settlement. But as Jacobs pointed out, this money was a drop in the bucket - especially considering the fact that some if not all of these servicers not only breached acceptable ethical standards, they broke the law. They foreclosed on homes when they had no right and they refused to work with borrowers to reach loan modification agreements, despite promises to the contrary.

As Jacobs pointed out to the Herald, "The settlement sounds like a lot, but it's a quarterly profit for some of these banks. It's not much of a penalty. A lot of people in Miami need help, and I'm afraid they're not going to get it. The government sold them short."

Jacobs has never shied away from calling it like it is - and that includes calling the banks out on their bluster. Unfortunately, many foreclosure lawyers end up letting their clients down in this regard by simply allowing the bank to push through the action, without questioning the origin of certain documentation, the extent of loan modification efforts and other aspects that could well serve to keep a person in his or her home.

One thing Jacobs does applaud is the implementation of a new rule, adopted by the Consumer Financial Protection Bureau, the same week as the OCC settlement. The "qualified mortgage rule" was drafted to prevent banks from forming those same sort of toxic mortgages that end up forcing many unsuspecting borrowers into dire financial straights.

The new rule, which is an amendment to the Truth in Lending Act, lays a certain foundation of standards that force banks to determine someone's ability to repay a mortgage.

A huge catalyst behind the housing market collapse that crushed South Florida was that banks pushed hoards of homeowners into mortgages that were risky, on deceptive terms and that they clearly could not afford.

Now, the law will require banks to weigh the following:

Employment status,

The monthly mortgage payment;

Other loan obligations;

Mortgage-related obligations;

Debt, such as child support or alimony;

Current assets and/or monthly income;

Credit history;

Debt-to-income ratio.

This should help prevent us from being in a similar economic crisis.

If you find yourself in a personal one, waging war against your Miami foreclosure, we can help.

Mortgage Servicing Shams: The "Baby Faces" and the "Heels"

Fri, 19 Apr 2013 09:49:27 -0500

In the realm of professional wrestling, there is a clear division when it comes to the good guy versus the bad guy, or the "baby faces" versus "the heels," as those familiar with the industry would phrase it.

Interestingly, New York Filmmaker Joel Sucher recently made the connection between this world and the one inhabited by mortgage servicers.

Our Miami foreclosure lawyers realize that on the surface, it may seem the two have very little in common. But where we begin to see similarities, as Sucher deftly pointed out, is with regard to a practice called dual tracking.

This is the process whereby the borrower is working in good faith with the customer service representatives to do everything they can to save their home. They're sending in reams of documents, they're digging up every financial statement and they're answering every call - all in the hopes of reaching a loan modification that will allow them an affordable mortgage payment that they can manage in order to hang onto their house.

But meanwhile, that same mortgage servicing firm is employing people at the back end to undercut those efforts by preparing foreclosure action.

The customer service agents are the "baby faces." The backroom workers are the "heels."

While the borrower this whole time has thought he was working with the bank to reach a mutually beneficial solution, his feet are suddenly yanked out from underneath him. He's slammed into the mat with a notice of intent to accelerate. In plain English, that notice means you are expected to fork over the full amount of your loan, any interest you owe on it and any penalties. Oh, you can't pay that? Here's the door.

Rules established by the 2010 Dodd-Frank Act and later by the U.S. Consumer Financial Protection Bureau aim to significantly limit a mortgage servicer's ability to foreclose on a homeowner while that same servicer is simultaneously working to negotiate a loan modification.

However, the rules stop short of expressly banning dual-tracking, so it does still happen.

The new rules are supposed to limit the degree to which servicers can propel forward the foreclosure process until the borrower has had every opportunity to work out a loan modification.

Of course, banks have long been known for bending or even breaking the rules. Why do you think we've had this ongoing spate of multibillion-dollar settlements in recent years? Yet, many of them still haven't learned.

Dual-tracking is far from the only mortgage service scam we're seeing these days. To name a few:

The "Western Union" scam. Servicer representatives press homeowners to make payments using a convenience fee option, which charges the borrower an additional $10 to $20 per payment, allowing banks to rake in millions more annually. Homeowners get virtually nothing for this.

The "property inspection" scam. An outside contractor will conduct a "drive-by" of the home. They look to make sure it's still there and note the general condition of the home. From this, they formulate a Broker Price Opinion, which allows the bank to tack on about $12 extra a month to the borrower's statement if the place looks good. But if you're home is in poor shape, don't expect a break.

The "forced place insurance" scam. Our Miami foreclosure lawyers have discussed this on numerous occasions. Basically, if a borrower allows a lapse in homeowner's insurance coverage, the servicer can force you into a policy - one that is usually ten times higher than it would have been otherwise. A lot of times, it's later discovered there were errors, and the original coverage hadn't actually lapsed in the first place.

If you have fallen prey to your mortgage company's dirty tricks, call our experienced Miami foreclosure lawyers today.

Foreclosure Settlement Payouts Trickle In

Wed, 17 Apr 2013 09:19:52 -0500

Thirteen mortgage servicers have begun cutting checks, as part of the $3.6 billion settlement deal reached after the Office of the Comptroller of the Currency scrapped independent reviews to rectify a host of foreclosure wrongs.

Our Miami foreclosure lawyers understand that the checks will range from $300 to $125,000, and will be based on the type of abuse committed against the borrower.

So for example, someone who applied for a loan modification and never received a response may expect to get between $400 and $800.

Meanwhile, those who had their homes repossessed, despite the fact that they weren't in default, could stand to receive the full $125,000.

In all, some 4.2 million borrowers are eligible to receive a payment, while federal regulators have estimated that only 1,135 will be receiving that $125,000 payment. Of those, the vast majority were homeowners whose homes were seized in a foreclosure, despite the fact that they were eligible for the Servicemembers Relief Act. This is the law that protects active military members from being subject to a foreclosure action while serving oversees.

These were the most egregious of cases, but most borrowers ended up suffering some kind of financial damage throughout the process. In a lot of cases, mortgage servicers tacked on fees that were unfair or simply refused to modify mortgages to terms that were more affordable - despite the fact that the whole reason that so many people were underwater on these properties in the first place was because banks failed to properly weigh the risks -- and instead handed out sky-high mortgage loans to anyone with a pulse.

Then, when the housing market crashed, the mortgage servicers frequently used fraudulent paperwork to begin seizing those homes en masse.

Borrowers will be eligible for the money if they were at any stage of the foreclosure process back in either 2009 or 2010 and their mortgage was serviced by one of the following:

Bank of America;

Citibank;

Aurora;

HSBC;

Goldman Sachs;

JPMorgan Chase;

Morgan Stanley;

MetLife Bank;

Sovereign;

PNC;

U.S. Bank;

Wells Fargo;

SunTrust.

In Florida, hundreds of thousands of homeowners will be receiving money, with about 50,000 of those in Palm Beach County and even more in Miami-Dade and Broward. South Florida was the epicenter of the housing crisis.

It's important for people to know that your receipt or cashing of a check does not disqualify you from still taking legal action against the mortgage servicer or bank or any other entity in the event you were wrongfully foreclosed upon during that time. No one should ask you to sign any waiver against further action. If that happens, you should contact an experienced foreclosure lawyer immediately.

It's also worth noting that those borrowers who had requested a review under the "independent" foreclosure review process that was later abandoned can probably expect to be paid twice. That will apply to about 440,000 of that 4.1 million, which are those who actually applied for a review.

The settlement won't cover foreclosures involving any other mortgage servicers except the ones listed, though other servicing firms are in the process of hammering out a separate settlement agreement with federal regulators.