In addition to homeowners, Home Owner’s Associations (“HOA”s) are victims of the foreclosure crisis as well. When homeowners stop paying maintenance fees or assessments, associations start facing serious problems. Some associations have more than 50% of their units delinquent. Under Florida law, HOAs can foreclose on owners for the delinquent fees and can take title that way. This is not always helpful because the existing mortgage goes with it and the lender (the bank holding the 1st and maybe even 2nd mortgage) may not be willing to relinquish its claim.
The Florida Supreme Court decided it would consider a settled foreclosure fraud claim as an issue of great public importance that may dramatically affect the mortgage foreclosure crisis in this state. The opinion states that the court has the right to look at the case claiming a fraudulent mortgage assignment was filed in court.
The case involves a Lake Worth resident who unsuccessfully sought an evidentiary hearing on possible punishment for the lender after the homeowner claimed the bank pursued foreclosure with a fake mortgage assignment.
National mortgage backers Freddie Mac and Fannie Mae announced this morning that they are suspending foreclosure evictions and lockouts from Dec. 19 through Jan. 2, 2012. The order involves foreclosed occupied single family homes and two to four unit properties that had Freddie Mac or Fannie Mae mortgages.
The government-sponsered enterprises also suspended evictions last year during the holiday season, but part of that included the foreclosure moratorium that most major lenders put in place after the robo-signing scandal left some foreclosures in doubt.
Foreclosed Homeowners may have their Cases Reviewed (by the Same Banks that Improperly Foreclosed on them).
Approximately 4,000,000 foreclosure cases completed in 2009-2010 are under review and the injured borrowers are getting an opportunity to have their cases reviewed for reimbursement payments. Unfortunately, whether a borrower will be reimbursed is up to the same lender accused of moving too quickly to seize their home. Starting November 1st, mortgage lenders and servicers are sending notifications to potentially eligible borrowers asking if they want their case reviewed.
The Assessment Workgroup for the Managed Mediation Program was assembled in September by Florida Supreme Court Chief Justice Charles Canady in response to news that only 3.6% of cases eligible for mediation had settled in almost two years since the program was started. The group has recommended that the mandatory foreclosure mediation program should be abolished and replaced with a plan that allows courts to opt into the program.
Credit Unions are financial institutions that function a lot like banks, but are regulated differently because of their not-for-profit status. Credit Unions generally offer great rates and terms for their members when it comes to mortgages, car loans, and even credit cards. However, when you take out a secured loan with a Credit Union (i.e., a car loan), the Credit Union will probably include a cross-collateralization clause somewhere in the loan agreement.
A year after the “robo-signer” scandal slowed down the foreclosure process, foreclosures are picking up again in South Florida. According to RealtyTrac, July & August produced a 12.3% increase in foreclosure actions in the tri-county region. Miami-Dade, Broward, and Palm Beach Counties all experienced increases in foreclosure related activity ranging from 4.3% to 19%. One byproduct of the increase in foreclosures is an increase of homes entering the already depressed market.
Many borrowers that have stopped making their mortgage payments are unsure as to whether or not they should continue making payments to their homeowner’s association, commonly referred to as their HOA. My clients that are facing foreclosure often ask what the consequences are for not paying the HOA and are often surprised with my answer. With very few exceptions, I recommend paying your association in full and on time.
This is one of the most frequently asked questions that my clients need answered. The truth is, like most answers to legal questions, it depends…
Creditor Harassment / Collection Calls:
If the primary force driving you to file for bankruptcy is harassing phone calls, letters, and e-mails from your creditors, then chances are the sooner you can file the better. Filing for bankruptcy invokes the automatic stay which instantly prohibits any creditor from contacting you during the pendency of the bankruptcy case.
According to a recent Bloomberg article, more than 28 percent of U.S. homeowners owed more than their properties were worth in the first quarter of 2011. This was the biggest drop in U.S. home values since 2008. Home prices fell approximately 3% in the first quarter of 2011 and are expected to fall as much as 12% before the year is over.