Florida “Zombie” Foreclosures Are The Highest Throughout The Nation

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Even after a 35 percent decrease in “zombie” foreclosures, Florida continues to lead the nation with the highest number of “zombie” foreclosures.

Throughout the U.S., Florida has the highest number of “zombie” foreclosures. “Zombie” foreclosure is a term used for properties that are under foreclosure but have been abandoned. There are only 36,000 pending “zombie” foreclosures, which is a 35 percent decline from this time last year. However, other states such as California, Illinois, Indiana, New Jersey, New York, North Carolina, Maryland, Ohio, and Pennsylvania are also experiencing a high number of “zombie” foreclosures.  This kind of foreclosure accounts for about one fourth of all foreclosures in Florida.

“Zombie” foreclosures pose a great problem for the banks that have ownership of the property and are trying to put them back on the market.  Many of these homes have overgrown lawn, many damages, and the utilities may have been turned off for months or perhaps even years.  Although these “zombie” foreclosures have been down from a year ago, they still represent a large share of foreclosures nationwide. There are more than 142,000 foreclosed properties that have been abandoned nationwide, reported RealtyTrac.

Daren Blomquist, the vice president of RealtyTrac, stated that “zombie” foreclosure are normally the problem cases still “stuck in the pipeline”, and they are more common in the states with a longer foreclosure process.  Mr. Blomquist also stated “The increase in zombie foreclosures is actually a good sign that banks and courts are finally moving forward with a resolution on these properties that may have been sitting in foreclosure limbo for years”.

New York had the most “zombie” foreclosures at the end of last month with more than 19,000. This is at the metropolitan level.  Others metro areas near the top of the list were, Tampa, South Florida, Orlando, Jacksonville, Baltimore, Philadelphia, Jacksonville, Las Vegas and Los Angeles.

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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Clerical Error Costs Bank Foreclosure Case

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Clerical errors, both by the bank and by the court, have caused lengthy foreclosure cases to be dismissed.

A clerical error cost Bank of America a four year foreclosure case when it should have been something clear-cut.  In 2009 the plaintiff was granted a final judgment against the defendant Heather Epstein, who moved out of the property the following year, and Bank of America took over the property with a new certificate of title.  However, problems soon arose when the mortgage and all subsequent documents had an incorrect legal description of the property.

Court documentation points towards the bank having knowledge of the clerical error after the Broward County property appraiser’s office rebuffed the certificate of title and negated to transfer the title due to not being able to match the legal description.  It took the bank two years to start taking action in order to fix the problem, leaving Epstein as the documented owner while facing the condo association bills.

The trial court denied, without prejudice, a motion filed by Bank of America in 2012 to decimate the foreclosure judgment and the certificate of title in order to have the legal description discrepancy corrected, but because of Florida’s rule of civil procedure which only allows a one year period to annul judgments due to errors.  However, in 2013 when the Bank made a second attempt stating that the incorrect legal description could affect the rights of a neighboring property, the trial court allowed it urging Epstein to appeal.

Judge Cory Ciklin and Judge Alan Forst both agreed with Fourth DCA Judge Burton Conner when he stated that Bank of America would need to start the foreclosure action against Epstein because the court could of corrected the legal description issue before the foreclosure judgment but not after. This is both good news and bad news for Epstein because although she will regain control over the property, she will need to battle it out in court to figure out who is liable for the past due upkeep and maintenance after she vacated the property.

Another case of clerical slipups, this time by the court and not the bank, cost Wachovia Mortgage FSB its foreclosure case against Jose Montes and Catalina Solano of Courtyard Homes at the Grove in Weston. Wachovia file the original promissory note before the trial but when the note could not be found in the court file, the defendants challenged the bank’s evidence and won the involuntary dismissal. Adding insult to injury, a week later a court clerk found the note and mailed it back to the bank. It took over a year to resolve the appeal.

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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Defective Paperwork Should Win You The Case, But That’s Not Necessarily True

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Lenders who provide unsigned, undated or even wrong documentation should immediate have their case thrown out but its all base on the Judge assigned to the case.

One could assume that screwed up paperwork would cost the lender their case, but it doesn’t necessarily mean that because it depends on which judge is handling it.  For BAC Home Loans Servicing LP, mishandled documentation during the height of the robo-signing cost them a foreclosure judgment against homeowner Rosanie Joseph because they failed to prove standing to sue.  The foreclosure judgment passed by Palm Beach Circuit Judge Diana Lewis was reversed due to lack of evidence proving that Taylor Bean & Whitaker Mortgage Corp was the owner of the mortgage when the foreclosure was filed against Joseph.

The lawsuit had the 2008 mortgage, provided by Key Mortgage Associates, attached but there was no assignment or note with the filing by Taylor Bean which they reported as lost or stolen.  Taylor Bean later assigned the note to BAC, who then picked up the foreclosure and ran with it.  However during the trial, BAC was able to present the mortgage and note. The note was endorsed twice by the same person from Key Mortgage and Taylor Bean but neither was dated.  Judge Martha Warner wrote on behalf of the unanimous panel “A party must establish its standing to bring a mortgage foreclosure complaint by establishing an assignment or equitable transfer of the note and mortgage prior to instituting the complaint.”

In the Gafoor and Nina Jaffer v. Chase Home Finance case, the panel had a split litigation.  The Jaffers declared that Chase provided the mortgage note payable to a third party without providing proof of the transfer and used an amended complaint that declined to state a cause of action.  However, due to failing to respond to the lawsuit prior to a default being entered, the Jaffers waived the question of Chase’s standing.  Chase acknowledged that some of their employees signed affidavits about loan documents without first inspecting the loan file.  But the Fourth DCA upheld summary judgment issued by Broward Circuit Judge Sandra Perlman.  In the 2-1 unsigned decision, Judges Spencer Levine and Klingensmith concurred. Judge Burton Conner dissented, citing Chase’s failure to file an accurate copy of the mortgage note.

Broward Circuit Judge Kathleen Ireland ruled in favor of homeowner Theresa Boglioli against Deutsche Bank National Trust Co. after the lender executed the mortgage transfer post filing its foreclosure complaint against Ms. Boglioli and provided a blank, undated endorsement in the midst of other documents.  The unsigned opinion was issued by Judges Jonathan Gerber, Cory Ciklin and Levine.  With this many discrepancies and inconsistent rules within the same District, some speculate that there will be a rise in request for full court review.

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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How Late Is Too Late To Foreclose?

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The Florida Supreme Court has been asked to step in and provide a unified statute of limitations.

Florida has a five year statute of limitations for mortgage foreclosures.  This means that a foreclosure lawsuit can be filed within five years by the lender if a borrower defaults on his or her payments.  But this leaves the question of whether the clock restarts if there is a case dismissal or if the time is still running from the original default.  These questions have yet to be answered, but they are getting closer to a definitive response as the Florida Supreme Court should be providing an answer during this upcoming year.

During one case where the foreclosure was dismissed by the court, it was stated that they could refile establishing a new default date even if the original default happened more than five years ago.  Under the “continuing default” theory, the dismissal canceled the acceleration of the loan so that the payments would continue to be due every month and the loan could be reaccelerated following a new default.  In another case that was filed a short time after the first one, the court went further and stated that this “continuing default” theory also expanded to those lenders who have moved for a voluntary dismissal.

However, the latest case that was discussed on December 2014 had a completely different result.  The court sharply disagreed stating that although the case was dismissed by the court, it “did not by itself negate, invalidate or otherwise decelerate the lender’s acceleration of the debt in the initial action.”  After the dismissal the bank made no attempts to collect the unpaid mortgage, therefore when they went back to file for a second foreclosure action the court denied them the foreclosure baring them by the statute of limitations.  Due to the conflict of the difference of opinion by each for these cases, the Florida Supreme Court has been called in to revise the law and come up with a unanimous decision.

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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Reality Star Sent To Prison For Bankruptcy Fraud

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Joe and Teresa Guidice were both sentences to at least 15 month in prison for bankruptcy fraud.

A cast member of the Real Housewives of New Jersey, Teresa Giudice, has begun serving her 15 month sentence for bankruptcy fraud. Mr. and Mrs. Giudice plead guilty to hiding assets from bankruptcy creditors and submitting fraudulent loan applications to retrieve $5 million in mortgages and construction loans.  Mr. Giudice also pleaded guilty to failing to pay taxes of well over $200,000 and unlawful use of identification in a state court case which involved a forged driver’s license. All together Joe Giudice will serve 41 months in a federal prison.

During the October sentencing by Judge Esther Salas, she scolded the couple for not divulging all of their assets as required under their plea agreement calling it “the same pattern of obstruction, concealment and manipulation as they showed in the bankruptcy case.” Still, Judge Salas gave Teresa a lesser sentence than the one desired by the U.S. attorney’s office and allowed her to serve it at a different time than her husband so they could still take care of their four daughters. When Joe completes his 41 month sentence, he will have an immigration hearing since he is not an American Citizen which will likely cause him to be deported. Mr. Guidice’s attorney claims he was unaware that he was not a U.S. Citizen since he was brought to the U.S. as an infant.

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 Consumer Financial Protection Bureau’s Rules Are Being Defied

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Lenders are bending the CFPB rulings and a Miami Foreclosure Defense Attorney is ready to challenge them.

A Miami foreclosure defense attorney is getting ready to challenge lenders in court who he claims are in violation of federal mortgage servicing rules that took place in January.  He’s currently working on postponing several foreclosure sales referring to rules that were issued by the Consumer Financial Protection Bureau, or CFPB, to protect borrowers.  His office will file lawsuits, in federal court if necessary, against lenders that push for foreclosure sales while borrowers are waiting to receive loan modifications.

The CFPB rule states that lender must verify that the applicant is able to afford a mortgage prior to issuing a loan, and must obey new protections for homeowners who are having a hard time making payments.  The rule also includes foreclosure sale prevention if borrowers are taking the correct steps to obtain a mortgage modification.  Flagstar Bank was ordered to pay $27.5 million to nearly 2,000 borrowers in September by the bureau because they were consistently preventing borrowers’ efforts to lessen their losses and keep their homes.

Mortgage servicers are favored due to Miami’s clogged foreclosure dockets all the while the judges are making an effort to lessen the backlog despite federal rules giving homeowners a break, claims the Miami foreclosure defense attorney. While homeowners are hoping to delay the foreclosure process while still waiting to hear back regarding their mortgage modifications, some courts are moving their cases along and giving lenders loopholes to push forward with the foreclosure.

However, lenders are stating that they are suffering losses due to heavy spending on foreclosure litigations and compliance teams. Lenders believe that for the foreclosure system to be effective and the real estate market to return, the foreclosure process has to be fair and efficient. It is in the banker’s preference not to foreclose but they will litigate if borrowers became delinquent and the state courts reject motions for continuance.

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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Unpaid Assessments After Foreclosure, Who is Responsible?

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During the foreclosure process, condo assessments remain unpaid and the Courts have put an order to make someone responsible for unpaid dues.

Now that the tidal wave of foreclosure diminishes, legislators and judges are adjusting the law to determine who will responsible to pay past due balances, most of which are condominium fees.  The Florida safe harbor provision puts a cap on condo assessments that are owed by “first mortgagee or its successor or assigns” who pick up title during the foreclosure process. They are liable for 1 percent of the original mortgage or 12 months of fees, whichever is the lesser amount.

As anticipated, there have been pursuits to find the gray-areas in the definitions to the advantage of lenders and condo associations. Both are set back financially by foreclosure and the longer it takes them the bigger the loss. An attempt at one of those gray-areas worked in a trial but not in the December 5th Fifth District Court of Appeal.  The Court stated that the “first mortgagee” mentioned in the safe harbor law means first in priority and not who is first in line, as the trial court wrongly deduced.

Although Beltway was not the direct assignee to the original lender but the assignee of an assignee, they still won the safe harbor and were only responsible to pay 12 months’ worth of past dues or 1 percent of the mortgage. The amount paid added up to $30,000 which isn’t an overly large amount but it had a serious impact. The dispute between the lenders and associations can get very expensive if they litigate the issues which is why lenders may simply pay off the association so they can get the property back on the market quickly.

The Safe harbor law is more beneficial for the lending industry than it is for the condo associations. Lenders convinced Legislature that if they didn’t have priority over association liens than lending would be in jeopardy. Before the condo statutes were amended to add safe harbor, many of the older associations had governing documents that failed to address the liability or assessments post-bank foreclosure, or they had provisions that would entirely extinguish the liability for assessments incurred before a bank received title through foreclosure.

Because condos had a strong argument about the amount of money they were losing, the compromise became 12 months’ of pass-due assessments or 1 percent of the original mortgage. However, during the foreclosure tidal wave that hit the nation, a lot of association found themselves “upside down” because of the amount of time it took banks to foreclose on properties. Most association had such large number of properties under foreclosure that they had to pass special assessments just to keep afloat.

The safe harbor rule changed and became effective July 1st to assist assertive associations who filed for foreclosure before the banks did. The banks tried to argue that if the associations foreclose first, they cannot collect the past-due fees. An amendment was provided to give clarity to this matter which stated that even if the association forecloses on the property first, the bank that follows still has to pay the 12 months or 1 percent.

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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An Attorney’s Challenge To A Foreclosure Order Was Supported By Advisory Panel

Attorney's Challenge to Foreclosure Order Was Supported By The  Advisory Panel

An advisory committee to the Florida Supreme Court informed the Palm Beach Circuit chief judge that an administrative order that throws out certain motions in foreclosure cases as “abandoned” is a local rule. According to Florida Rules of Judicial Administration, a local rule is a rule of “practice or procedure” for trial court application only, because local conditions require. It provides an omission or facilitates an application of a statewide rule, but does not conflict. Local rules are authorized by the Supreme Court, not circuit chief judges.

The Palm Beach administrative order—which has a similar counterpart in the Miami-Dade Circuit that has only been challenged through individual cases to the Third District Court of Appeal—was challenged by a foreclosure defense attorney in Palm Beach County. He was represented before the Supreme Court Local Rules Advisory Committee by Thomas Hall, former clerk to the state Supreme Court and now an attorney with The Mills Firm in Tallahassee. “This opinion by the Local Rules Advisory Committee goes directly to the Florida Supreme Court, and the Supreme Court reviews the challenge and makes its own determination. But the committee exists to advise the Supreme Court about this sort of thing,” Hall said.

These abandonment rules have been watched closely by foreclosure defense attorneys and law firms representing the plaintiff mortgage lenders. “There are other groups, certainly legal aid organizations, watching it because they are providing defense in a lot of foreclosure cases,” Hall said. The administrative order, issued by Chief Judge Jeffrey Colbath in April, states motions in foreclosure cases that have not been set for a hearing within 10 days of filing, and have not been heard within 90 days of filing, are to be deemed abandoned.

Ice argued the order exceeds the authority of an administrative rule, since such rules are restricted to housekeeping chores. Further, the rule puts judges in the position of choosing sides because defendants, more often than not, are the parties filing motions to protect their interest. Plaintiff banks tend to be content to leave a case dormant until it is in their economic interest to move to a foreclosure trial. First District Court of Appeal Chief Judge Robert T. Benton II, committee chair, summarized Colbath’s defense of the administrative order in the committee opinion Benton issued Tuesday.

The Palm Beach chief judge claimed the order should be considered in isolation, and that it does not create a new procedure or rule, “but amounts to nothing more than authorization for case management by a trial judge.” Colbath told the committee that since the order applies to both sides it does not unfairly target homeowners. He said it was not a local rule because it does not apply to all proceedings, only to foreclosures, and it does not apply to all parties or attorneys, only those who fail to set motions in a timely fashion in foreclosure court.

“Finally, the chief judge emphasizes that a judicial determination of abandonment is not the same as denial of a motion or a ruling that a motion has been waived. The chief judge maintains that a party whose motion is deemed abandoned is not precluded from re-filing the motion,” Benton said. Even though the order only applies to foreclosure cases, Benton said it applies to all foreclosure cases, “and its scope, impact and seriousness militate in favor of review by the Supreme Court, in the opinion of the committee.”

Administrative orders, Benton continued, are appropriate for “housekeeping chores,” such as creating specialized divisions, assigning judges to particular divisions or court deputies to a particular judge. But Colbath’s order should be viewed as a local rule because it pertains directly to practice and procedure in the circuit, “even though it is not clear that the problem it addresses is specific to the Fifteenth Circuit.” Benton said the committee stands ready to address the merits of the dispute as the Supreme Court may direct.

Fourth District passes In addition to challenging the order before the committee, the Palm Beach County foreclosure defense attorney sought review by the Fourth District. But on Oct. 30, the Fourth District denied the petition. The attorney said that the Fourth District passed because it said his petition for review “is without prejudice to the aggrieved party.” He explained, “We didn’t wait for any actual rulings on any individual cases. If you are someone who lost their right, lost a motion because it was being abandoned, you can still appeal that. The court said we’re not going to strike it down in one fell swoop.”

He was concerned in May when he first challenged the order that if he were to wait until a judge made an abandonment ruling, that delay could later be interpreted as a timely error. “With the Oct. 30 ruling, we got the green light, in terms of the court clarifying, ‘No, you can appeal later,’” stated the attorney. Now that the committee has spoken, he said it should carry great weight with the Supreme Court, given the fact that the vote was unanimous. Of the eight judges on the committee, six voted with the Palm Beach County foreclosure defense attorney’s position and the other two were absent. Amy S. Borman, general counsel for the Palm Beach Circuit, said that because the advisory committee’s work is an active matter, the circuit cannot comment. She added, however, that the Fourth District’s Oct. 30 decision also had the effect of lifting the stay on Colbath’s foreclosure division orders.

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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Medical Debt Affects A Large Portion of Americans

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Million of Americans are having a hard time getting loans due to their medical bills bring down their credit scores.

In a new report of compiled data provided by the Consumer Financial Protection Bureau, close to 20 percent of U.S. shoppers are in debt due to unpaid medical bills.  Many Americans seem to be confused by the bills that insurance companies and hospitals are providing for the cost of their treatments. This confusion is causing lower credit scores and making it much harder for Americans to get loans for homes or automobiles. $1,766 is the average amount owed for people who only have pending medical bills. Those who have unpaid medical bills followed by additional debt such as a credit cards and such, average more in the $5,638. The majority of all debt in credit reports comes from unpaid medical bills.

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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Loan Modification Con-Man Gets Over A Decade In Federal Prison

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Justice is served after a group of cheats bamboozled thousands of homeowners who were trying to obtain loan modifications.

Jason Vitulano plead guilty and was sentenced to 11 years in a federal prison and ordered to pay restitution of $5.9 million dollars in a West Palm Beach Courthouse after running a boiler room scheme targeting troubled homeowners for mail and wired fraud. Between 2008 and 2009 the Boca Raton man who was operating boiler rooms would promise to attain loan modifications for homeowners who had fallen back of their mortgage payments by securing the fees upfront. There were nearly 2,000 victims, very few of which were actually provided with modifications, who paid well over $7 million dollars.

The Boca Raton man was the ringleader of a group of 10 other offenders all of whom plead guilty. This group of con artists deceived thousands of homeowners who were fighting to keep their homes by hustling money out of them with no fruit to their labor in the Boca Raton and Deerfield area. The man had two previous charges, one in Pensacola and the other in Palm Beach County for mortgage fraud. In the Pensacola case he was sentences to six years, which he will serve first followed by the 11 years on this new case.

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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