Bank of America Fights to Keep Second Mortgage From Being Void in Bankruptcy

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Bank of America has appealed to the Supreme Court to make a determination of whether a second mortgage can be voided in a bankruptcy if the primary mortgage is underwater.

In a few days the Supreme Court will make a determination of whether homeowners who have filed bankruptcy are eligible to nullify a second mortgage assuming that the property’s market value is lower than the amount owned on the first mortgage. Bank of America appealed twice to the Supreme Court proclaiming that the second loans should not be “stripped off” when a homeowner files bankruptcy even though the primary loan is well underwater.

The two cases that Bank of America is appealing are from homeowners in Florida which have voided the second loans provided by them.  The bank states that the rulings provided by the 11th Circuit Court of Appeals in which it certifies its validity is in discord with the Supreme Court’s paradigm and all other appeal courts that have contemplated it. Alabama, Florida and Georgia are the states which are bound by the 11th Circuit that have nullified hundreds, maybe even thousands, of underwater second mortgages since the court approved it 24 months ago.

According to the data compiled by RealtyTrac, a real estate research company, 28 percent of Florida homes that are mortgaged are worth much less than market value. Florida is the second state with the highest number of underwater mortgages. Nevada is number one. The loans given to the debtors by Bank of America were secured by a lien on the property in both cases. The banks attorneys contend that the lien secured to the second loan should not be affected by the fact that the primary mortgage is underwater. However, the homeowner’s attorneys argue that in a foreclosure, the second mortgage would be completely worthless.

If you have questions about Foreclosure, Loan Modification, Bankruptcy, Short Sale, or other alternatives, please feel free to call my office at 888-886-0020, send an e-mail to emil@fleysherlaw.com, or complete the contact form below.

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For Nearly Three Years A Palm Beach County Woman Had Her Account Frozen

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A Palm Beach County woman fought for years trying to get Bank of America to unfreeze her bank account due to her husband’s debt collectors.

A Palm Beach County woman had her bank account frozen for nearly three years until a Broward County circuit judge ordered Bank of America to unfreeze it and BB&T to refrain from the pursuit of collecting fund from her account. Amy Kodsi’s Bank of America account had $720,000 when it was frozen by creditors who filed a court judgment due to her husband, who racked up $4 million worth of debt during the market crash.

A property was sold in 2011 to appease the creditors, PNC and BB&T, which then should have been followed up by going to court and acknowledging the lack of funds. However, the banks did not do this.  They instead served Bank of America with garnishment writs causing Ms. Kodsi’s account to become frozen.  Both banks then proceeded to file lawsuits for the same account in 2 different counties.

A Broward judge concluded that BB&T was unsuccessful in providing evidence that contradicted the documents Amy Kodsi provided stating that this bank account was solely her own.  The St. Lucie judge also ruled in favor of Ms. Kodsi stating that PNC improperly issued the writ and the deficiency was never established.  Said judge also communicate to Bank of America that the account didn’t need to be held any longer.

Bank of America defied the ruling claiming they were being overly cautious.  PNC’s attorney disputed the ruling of the improper use of the writ stating the judge didn’t conduct an evidentiary hearing but never filed an appeal.  BB&T appealed the ruling to lift the stay on the garnishment writs but was later overturned by the Fourth District Court of Appeal. After running out of options, Bank of America had no other choice but the remove the stay on Ms. Kodsi’s account, nearly three years later.

If you have questions about Foreclosure, Loan Modification, Bankruptcy, Short Sale, or other alternatives, please feel free to call my office at 888-886-0020, send an e-mail to emil@fleysherlaw.com, or complete the contact form below.

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Florida Still Leading The County With Largest Amount Of ‘Zombie’ Homes

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New foreclosure filings have been drastically reduced in Florida, but we are the leading State in the Country with the most Zombie foreclosure homes.

A new report states that although the number of abandoned foreclosed homes has been decreasing locally, Florida continues to surpass the rest of the country. By the end of the third quarter, the commonly named ‘zombie” homes in Palm Beach County are up to 2,749 which is around 35 perfect down from last year, stated RealtyTrac Firm.  Broward County was down 19 percent from last year at 3,437 abandoned homes.  Even with the reduction, Broward is the third highest in the nation of zombie foreclosures, only to be topped by Miami-Dade County with 3,683 and leading the nation at 3,982 is Cook County, IL.  Palm Beach County wasn’t too far behind rating in fifth throughout the country.

Out of the 50 states, Florida was number one with 35,913 owner-vacated properties that are waiting to be reclaimed, nearly tripling New York’s 12,683 abandoned homes. In South Florida, foreclosure filings have been reducing significantly, however the courts are still dealing with the overwhelming amount of cases during the market crash. Typically, the foreclosure process for a regular home is over 2 years, 951 days to be exact, in Florida.  Zombie foreclosure affect the Real Estate market because the home isn’t being taken care of, it’s not being sold to buyers who are starving for options, its lowering the value of all homes in the neighborhood, and the lenders haven’t taken ownership of the property.

If you have questions about Foreclosure, Loan Modification, Bankruptcy, Short Sale, or other alternatives, please feel free to call my office at 888-886-0020, send an e-mail to emil@fleysherlaw.com, or complete the contact form below.

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Court Rules In Favor of Defendants In Foreclosure Cases With Robo-Witnesses

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Three recent foreclosure cases may have started a trend of Judges voting in favor of Defendants due to the bank’s robo-witnesses who are unable to set a foundation for the evidence that is being presented. at trial

The First District Court of Appeal has thrown out evidence presented in three foreclosure cases due to the lenders’ witnesses being unqualified to testify. In two of the cases, the court stated that the lawsuits should be dismissed in favor of the homeowners. The banks have 30 days to file a motion for rehearing or the decisions will become active throughout the state. It has been known for banks to bring one witness with inadequate knowledge of the origin or accuracy of mortgage records they provided. This is normally due to the number of servicing transfers from the time the loan is funded to the time of trial.

Florida courts had a tsunami of foreclosures filings after the housing market crashed in 2008. In the interim, defense attorneys argued that the plaintiffs were bypassing the evidentiary rules by providing counterfeit documents to prove their standing. This is led to the robo-signing scandal that was challenged in 2010 creating a mandate for servicers and lenders to suspend filing new foreclosure cases.

In 2013 the Fourth District Court ruled in the favor of Connie Yang, the owner, because her homeowner’s association failed to provide solid evidence in the accounting ledger they submitted. However, when defense attorneys tried to use this as an example against the banks, judges ruled that this case only applied to associations and not banks.

In Tallahassee, Judge Nikki Ann Clark of the First District ruled against Bank of New York Mellon because the evidence submitted to prove the amount owed by the defendants, Lloyd & Teresa Burdeshaw, was inadmissible hearsay. The bank’s witness was unsuccessful in authenticating the records provided by the bank and failed to qualify as a person with proficient intellect of the four aspects needed for business records exception. In addition to the case being dismissed for lack of foundation, it was later discovered that the case should have been dismissed years prior because of a motion to dismiss for inactivity that that was filed in 2010.

In another case, Kiefert v. NationStar Mortgage, the Court reversed the foreclosure judgment because the bank’s witness was only able to establish that its predecessor was in possession of the note when the complaint was filed, not that that the note had been endorsed at the time the complaint was filed.

Finally, in Lacombe v. Deutsche Bank, the Court ruled in favor of the defendant, citing that the witness that the bank brought was simply “incoherent”.

These cases were dismissed, refusing to remand any of them as the bank had plenty of time to present proper evidence. Many foreclosure defense attorneys feel that there is a double standard when it comes to foreclosure trials and the witnesses the bank provides. Many go as far as stating that the banks are feeding the witnesses with hearsay so that they may mimic this language in court, but that this would not be allowed to happen in, for example, a medical malpractice trial.

If these opinions stand, the banks will be forced to present evidence at trial just like in any other civil case. Hopefully, the threat of mass dismissals and the expense and loss associated with that prospect will incentivise bank to work with borrowers in modifying delinquent mortgage loans.

If you have questions about Foreclosure, Loan Modification, Bankruptcy, Short Sale, or other alternatives, please feel free to call my office at 888-886-0020, send an e-mail to emil@fleysherlaw.com, or complete the contact form below.

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Associations Need To Be More Diligent During The Foreclosure Process

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The inactivity of a homeowner or condominium association going through a foreclosure filing could vastly devastated their finances.

Homeowners and condominium association were doing an adequate job of collecting monies due to them including write-offs that were so troublesome or hard for the association to deal with.  This is all before the market crashed in 2008, where the court system became highly overwhelmed with mortgage foreclosures and unchallenged cases would typically take at least 3 years to finalize. Associations have had to make changes in their collection policies because of submissive terminology in their governing documents and Florida statues. The amount of write-offs has caused the association to propose more special assessments, raise their monthly assessment payments, or go as far as file for bankruptcy.

Florida law states that when the bank who is in first line position forecloses on a property, they are exclusively responsible for all unpaid fees for up to 12 months of assessment payments prior to taking ownership or said property or 1 percent of the initial mortgage debt, whichever one is less, including then entire amount of fees racked up from the moment the bank took over the property until the property is sold. Due to the lengthy amount of time that it takes for a bank to foreclose on a property, associations no longer have the luxury of time, financially speaking, to wait for the bank to foreclose and a new owner to pick up where the bank left off in order to secure past due assessments. If associations wait for this to happen, they will nearly always have substantial write-offs.

Minimizing risk and costs while maximizing collections should be the objective for all associations. There are associations out there that have no changed their collection policies and are still under the impression that assertive debt collection will not always lead them to a larger write-offs but that it can take them to surpluses instead because said associations would not allow time and money to be waste while the bank takes 3 or more years to foreclose on a property. According to the Condominium Associations Institute, Florida has 46,000 associations, making it the largest amount of associations through the country at 14.2 percent.

RealtyTrac Inc., states that there are about 21,000 homes going through the foreclosure process and chances are that this homes are also behind on their association dues. If associations wait to pursue delinquent homeowners, they are directly contradicting their duties. The moment the association received notification that a property has been served a foreclosure complaint, they need to establish representation and immediately start taking action. One of the most beneficially and least used tool associations possess is collection rent from properties in foreclosure. A demand letter can be sent to the tenant, creating an agreement with the former owner, or the association itself can put a tenant in the unit. These are all great ways to collect or even create a surplus while the foreclosure process finishes.

If you have questions about Foreclosure, Loan Modification, Bankruptcy, Short Sale, or other alternatives, please feel free to call my office at 888-886-0020, send an e-mail to emil@fleysherlaw.com, or complete the contact form below.

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Foreclosure in Palm Beach County are Continuing to Decrease

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Palm Beach County experienced a new 12 percent decrease in foreclosures in a matter of 12 months.

Palm Beach County has a small increase in new foreclosure cases in September; however, they were still lower than in September of last year.  This is all according to the Clerk & Comptroller’s latest statistics in Palm Beach County. In September, 484 new foreclosure cases were files. 480 cases were filed in August providing a 0.83 percent increase but there was an 11.5 percent decrease in comparison from the 547 new cases that were filed September 2013.

From September of last year to September of this year, recorded deeds increased but the number of mortgages and deeds from August to September of this year decreased. In August there were 6,083 deeds recorded and in September 2014 5,804 deeds were recorded which was a 4.6 percent decrease; however it was a 3.4 percent increase from September of last year which only recorded 5,614 deeds. During September 2013 there were 3,379 mortgages recorded and in September 2014 there were only 3,036 mortgages recorded giving us a 10.2 percent decrease; however in August there were 3,204 mortgages recorded, which is a 5.2 percent decrease from August to September.

According to Grant Street Group, the developers of ClerkAuction, 782 properties were sold in September at auction, and 631 of those were purchased by the plaintiff who is usually the bank or mortgage company. The remaining 151 were sold to third parties. 1,268 properties were scheduled for foreclosure sale but 486 of those were cancelled in September. The cancellation rate was the same as it was in August at 38.3 percent. From motions to judgments to certificates of title the Clerk & Comptroller’s office facilitates all documents that are foreclosure related.

If you have questions about Foreclosure, Loan Modification, Bankruptcy, Short Sale, or other alternatives, please feel free to call my office at 888-886-0020, send an e-mail to emil@fleysherlaw.com, or complete the contact form below.

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The Drop in the Market Might Be a Blessing In Disguise For Refinancers

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Due to drops in the stock market, more people are thinking about refinancing their homes.

An absurd amount of Americans are questioning whether or not they should refinance their mortgage due to the unexpected fall of rates last week. These inquiries were coming in by the millions from current homeowners and soon-to-be-homeowners who are looking for a bargain.  The favorable circumstance came from the commotion that got the financial market, affecting the bond yields and the stock prices that sent them sliding. Since May 2013 the 10-year Treasury yield, which is where the rates for long-term mortgages are tracked, fell below 2 percent.

According to Freddie Mac, the average mortgage rate is 4.53 percent; however the rate fell to 3.97 percent. These rates do come with risks as well. Refinancers might get bamboozled with charges and fees if they are solely focused on the possibility of savings. The decrease in these rates can also be interpreted as an economic decline that could potentially reduce the income people on depending on to pay their mortgage. Even with this risk, people are motivated to attain those low mortgage rates.

A few weeks ago borrowers, bankers, and lenders had presumed that the rates would begin to rise again and stay around 6 percent which has been the average for over two decades. Their assumption was based on the expectations of a rise next year in the key short-term rates by the Federal Reserve. This tactic would expectantly force for mortgage rates to go up as well. This hypothesis came to a halt when the stocks fell hard due to fears of weakness in the global economy, the threat of Islamic State groups in the Middle East, and the expansion of Ebola.

The stock markets rallied on Friday to assist an increase in the yield and were able to increase it .6 perfect, leaving it at 2.20 percent. But even the smallest fall in mortgage rates can mean serious savings. On an average mortgage of $221,000, a 0.5 percent decline in its rate would mean a $50 in savings monthly, stated a Bank of America analysis. However, for someone who is refinancing, it will take a while for the savings to balance out with the cost because lenders normally charge fees for all kinds of paperwork.

If you have questions about Foreclosure, Loan Modification, Bankruptcy, Short Sale, or other alternatives, please feel free to call my office at 888-886-0020, send an e-mail to emil@fleysherlaw.com, or complete the contact form below.

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Foreign Investors Are Procuring More Loans

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Foreigners are helping the economy by purchasing properties in the U.S. with loans provided by American banks.

Lenders are granting non-U.S. resident’s better access to credit in order to finance investment properties or vacation homes. This is being done through a foreign-national mortgage without them ever having to step in the U.S. This loan services for people abroad requires that they put at least 40 percent down on a property. These international investors are assisting close the gap left by the American people. The domestic investors are no longer biting because most of the foreclosure inventory is no longer appetizing, and the middle-class borrowers cannot afford it due to stagnant income growth.

One lender that is based in Orlando, Florida has had a 65 percent increase in foreign buyers compared with 2013. Many foreign buyers are now buying 4 properties on loans instead of 2 properties cash. Banks are requesting that non U.S. residents put a down payment of 30 to 40 percent of the purchase prices. Residents are only required to 20 percent, which is why banks are lending more to foreigners. Cash buyers have been at the lowest, 33 percent since September 2008, therefore providing loans to nonresidents who have at least six months of cash reserves with a 30 percent down payment and usually only a two percent increase in their conventional loans.

The U.S. credit and tax system works very differently than the rest of the worlds. This causes some difficulty when it comes to lending to foreigner only because they banks are forced to rely on documentation from accounts and employers, along with third parties. A mass amount of nonresidents purchasing properties with loans do it to establish a credit in America. Although they many have millions in their bank, if they have no credit, it is still not an easy path for them to obtain a loan.

If you have questions about Foreclosure, Loan Modification, Bankruptcy, Short Sale, or other alternatives, please feel free to call my office at 888-886-0020, send an e-mail to emil@fleysherlaw.com, or complete the contact form below.

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New-Home Sales Include New Incentives

FHA loans, buying a new home, short sales, new home incentives, purchasing a new home, short sales attorney

Builders are trying different tactics to lure buyers into purchasing new homes even after the federal government lowered FHA loans.

As the real estate market has begun to cool down, many builders are throwing incentives to prospective buyers to see who will bite. Some are including pools or built-in barbecues while others are agreeing to cover up to $10,000 in closing costs or subsidize mortgage rates. From Sacramento, California to Orlando, Florida builders are doing their best to entice buyers by providing more freebies for new-homes.

Throughout the country, new-home sales have been spotty, plummeting in June before making its come back in July and August. After investors pushed properties prices up and the FHA limit was lowered, builders are having a hard time selling new homes, even with the incentives. There are some contractors who are refusing to give any stimulus for home buyers, standing by the fact that a new home is alluring enough.

The federal government cut the FHA loan size of 652 major U.S. counties this January to attract private capital back. Many of the counties where the FHA loan was lowered were cut below the median price of new-home values, making harder for new-homes to be sold and many buyers to purchase. However; existing home sales did increase because of the same FHA cuts.

If you have questions about Foreclosure, Loan Modification, Bankruptcy, Short Sale, or other alternatives, please feel free to call my office at 888-886-0020, send an e-mail to emil@fleysherlaw.com, or complete the contact form below.

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As Investors Retreat, Home Values Stall

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Investors have moved on and the housing market is suffering the consequences.

The increase in home prices has begun to slow down due to less interest from investors. In a seasonally adjusted basis, during the month of June, property prices only rose 0.1 percent, according to the Federal Housing Finance Agency as opposed to the estimated 0.5 percent that was predicted by data gathered by Bloomberg. After helping to drive prices up, investors are now pulling back due to a decrease in foreclosures and other homes at reduced prices.

Cash purchases dropped to 23 percent in August. The usual percentage is around 33 percent stated the National Association of Realtors. Investors tallied close to 12 percent of, the smallest amount since the end of 2009. Because prices have begun to escalate, the investors aren’t interested any more. They are looking to buy properties at low prices and sell them for a profit. Sales for pre-owned homes have also dropped by 1.8 percent for August reported the Realtors group.

If you have questions about Foreclosure, Loan Modification, Bankruptcy, Short Sale, or other alternatives, please feel free to call my office at 888-886-0020, send an e-mail to emil@fleysherlaw.com, or complete the contact form below.

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