Matt Weidner – Fighting For The American People

Archive for August, 2009

On August 21, 2009, the Florida Office of Financial Regulation issued an Emergency Cease and Desist Order which demanded that Ocala-based Taylor Bean & Whitaker cease all its operations in the State of Florida, including the prosecution of foreclosure cases.

The Order details the Office of Financial Regulation’s efforts to get TBW to comply with previous Orders of the Office and specifically Orders relating to audits and other actions related to attempting to assess the net worth or solvency of the mortgage lender/broker.  The Order lists many steps taken during the month of August to audit TBW’s records and meet with officials of TBW to assess their finacial status, but the Order asserts that TBW largely ignored or otherwise failed to comply with these demands.

Although TBW’s business consisted largely of government-backed loan business, the Order reports that TBW continues to service nearly 35,000 private, non-federal loans.  The Order also reports that TBW’s outside counsel reported that bankruptcy was iminent.  The Order asserts that one area of concern was a recent large volume of complaints the Office had recieved from consumers related to TBW’s processing of their mortgage payments.  With TBW running on a skeleton staff the Office seemed concerned that any payments sent in would not be properly accounted for and would be held up in TBW’s eventual bankruptcy proceedings.  See related article in today’s edition of the Wall Street Journal. http://online.wsj.com/article/SB125133060213062243.html

Attorneys representing clients in foreclosure are encouraged to include this Order as part of a Motion to Dismiss on behalf of their clients.  I also encourage all attorneys practicing to share the Order with all the judges in their circuits to prevent judges from entering Summary Judgments on behalf of TBW–in violation of the Order!

For a copy of the Order or for more information, contact my website at www.mattweidnerlaw.com.

On Sunday, August 23, 2009, the St. Petersburg Times published an article which detailed the troubles dogging the Signature Place Condominium in Downtown St. Petersburg.  http://www.tampabay.com/news/business/realestate/high-stakes-battles-for-st-petersburg-high-rise-signature-place/1029883 The article contained quotes from Joel Cantor, the project’s developer and designer where Cantor tried to dispel many of the negative rumors and speculation surrounding the project, but his quotes only serve to reinforce the view on the street that the project is in major trouble.  The article asserts that Cantor has closed on 56 of the condos in six weeks.  Although the article isn’t clear on this point, it seems that the 56 closed in six weeks is the total number of condos that have closed in the building out of a total of 177 for sale.

Hidden Dangers For Purchasers

The real question for this project is when (if ever) will  the remaining 126 units be sold and what unforeseen liabilities will be faced by those purchasers who  buy into a building with such a small number of units sold.  The reality is the residential real estate market will not show the type of dramatic improvement that would be required to close all these units at any time in the foreseeable future. The inventory of residential real estate for sale in Pinellas County grows by thousands each month and the number of real purchasers for these properties continues to shrink each month.  Unemployment numbers in Florida and the Tampa Bay area continue to grow http://www.tampabay.com/news/business/florida-unemployment-107-in-july-tampa-bay-up-slightly-to-113/1029663 and the real estate market will not improve until a solution to the unemployment crisis is reached.  The bottom line is it is virtually inconceiveable that any significant number of the remaining units at Signature Place will sell at any time in the imediate future. This very real possibility poses significant risks for anyone who has already purchased in the building or who is considering doing so.

Delaying the Inevitable

In the article, Cantor admits that he has entered into an agreement with the project’s lender, presumably an agreement to suspend demand for payments for some period of time while both parties wait to see if the economy improves and enough units sell to begin repaying the debt that encumbers the building.  Cantor also admits that part of the agreement includes a reduction or waiver of profit he attempted to make on the building; he would simply like a return on the investment he put into it.  Given the low number of sales and the immense building and carrying costs, it’s hard to imagine a scenario where a developer in this situation could recover his investment, much less any expected profit.  If all this is true, and the agreement with the lender is a temporary solution, foreclosure or lender assumption of the whole property would be the end result if sales don’t come….and fast.

Every project of any significance is going to have warranty/defect/design issues that must be addressed initially and then on an on-going basis.  Windows will leak, stucco will crack, sinks will leak.  In a perfect world your builder/developer (who has an incentive to keep working to resolve problems to protect his profit and future sales), will step up and promptly resolve all these issues.  When, as admitted in the article, the developer/builder’s profit potential is removed from the equation, one can only wonder how promptly such issues will be addressed.  Consider that if the builder/developer files bankruptcy are the resources even available to address such issues?)

Bottom line is the project is in trouble and the article and quotes did nothing to dispel these realities.

A recent survey published in the Wall Street Journal reports that one in eight US households with mortgages was in foreclosure or behind on mortgage payments during the second quarter.  While foreclosures against subprime loans have slowed, loans extended to borrowers with good credit have picked up in recent months as unemployment is affecting stronger borrowers.

Florida Leads the Nation in Foreclosures

Not surprisingly, Florida tops the list of homes in foreclosure with 11.96% of homes in foreclosure, a 1.40 percent jump over the first quarter.  Nearly 23% of mortgages in Florida are reportedly past due, including 12% that are in some stage of foreclosure and 5% that were 90 days or more past due in June.

Foreclosures Spreading to All Loan Types

The foreclosure crisis began nearly two years ago when subprime borrowers were unable to refinance their existing mortgages, but the filings have spread to all areas of loans now as more stable borrowers are affected by economic pain and job loss.  Prime loans acconted for 58% of the loans in foreclosure year to date 2008, up from 44% last year.  Foreclosures on loans backed by the Fedeal Housing Administration rose to 3% from 2.2% last year.

If you are behind on your mortgage or in foreclosure, you need an attorney who can help you navigate through the foreclosure process.  Contact my office with questions or visit my website at www.mattweidnerlaw.com.

A total of 1358 foreclosure cases were filed in Pinellas County during the period July 1, 2009 to August 1, 2009.  While this figure is high, it is fascinating that the number is not that much greater than the number of foreclosures that were filed during the same period in 2008 or 1118.  Having said that, the 2009 number of cases filed puts us on pace to have more than 12,000 foreclosure cases filed in Pinellas County for all of 2009.  This relatively large number will continute to place a drag on home price stabalization, particuarly in those neighborhoods with a higher concentration of foreclosures.

Its Not All Bad News

While the number of foreclosures filed is relatively high, 12,000 foreclosures filed in a county with a population somewhere around a million people isn’t all that bad either. http://en.wikipedia.org/wiki/Pinellas_County,_Florida Although I have consistently reported that homeowners are having difficulty obtaining modifications of mortgages, I can also report that many of the cases that I am working on for homeowners are just sitting dormant with no activity whatsoever, no attorneys pressing for hearings, no bill collectors hassling homeowners for payments….just nothing at all.  I suspect the reason for this is the foreclosure attorneys are just overwhelmed with work and are focusing all their energy and attention on those files where a homeowner has not hired an attorney…just working on getting those people out of their homes.

Foreclosures Just Left In Limbo

Another interesting pheneomena is the fact that many lenders are bringing the case right up to the point when they could schedule a foreclosure sale, but they are not actually having that sale, presumably because they do not want to become the title owner of that property because that lender would then start to become liable for all the costs and fees associated with that property.

Bottom line is if you are in foreclosure or need information about foreclosure, contact my office at www.mattweidnerlaw.com Coming tomorrow, a review of foreclosure sales held in Pinellas County in August.

Across the country there were a record 2.25 million foreclosures filed in 2008, and 1.5 million filed from January to June 2009.  These numbers are only going to increase, especially in Florida where one in every 33 homes are in some stage of the foreclosure process. (Nationally the rate is one in 84.)

I currently represent hundreds of individuals who are either in foreclosure or who are falling behind on their mortgages and are seeking a modification prior to foreclosure being filed.  Most of these clients would like to stay in their homes and could afford to do so if they could receive relatively modest modifications from their lenders.  My rather unfortunate experience in dealing with nearly all the major lenders is that modifications are hard to come by.  Numbers released by the Obama administration suggest that my client’s difficulty in obtaining modifications is not unique.  In fact, only 270,000 borrowers nationwide have recieved modifications….a staggeringly low number given the millions of homeowners who are either in foreclosure or who are behind on their mortgages.

The administration has announced a new goal of reaching 500,000 modifications by November, hardly a solution to the overall crisis, but good news for those few that will benefit.  To qualify for a loan modification under the Obama program:

• It must be a homestead property with not more than $729.750 owed on it;
• The loan must have been closed prior to January 1, 2009;
• Your monthly payment must be no more than 31% of your income;
• You must  be able to prove hardship such as job loss, unemployment, health expenses.

It will continue to be a very difficult for consumers to navigate the modification channels and you are urged to consult with an experienced real estate attorney to assist with the process.  For more information visit my website at www.mattweidnerlaw.com.

Homeowners wishing to walk away from their debt obligations have long turned to the “fresh start” provisions of the Federal bankruptcy code which allows them to discharge most debts and obligations and start thier lives fresh and debt free after the bankruptcy is discharged.

One type of debt which is not covered by the fresh start provisions is post-petition HOA dues and assessments, and potentially code enforcement liens.  Even if a homeowner surrenders the property as part of the bankruptcy proceedings, the homeowner is still the record title owner of the property and thus still responsible for HOA dues and assessments.  This is a troubling problem for the homeowner who seeks the protections of the bankruptcy code and who wishes to get a clean start, only to find that she is still burdened by accumulated HOA dues and fees.  While it is clear that post-petition HOA dues are not discharged, code enforcement liens and any attempts to collect them from a debtor in bankruptcy may violate the automatic stay provisions of the Federal bankruptcy code.  The decision in the Funk bankruptcy case out of Jacksonville provides the legal analysis and rationale for this, the decision can be found here http://www.floridadirtlaw.com/files/funk_decision_re_code_enforecment.pdf

The best hope for homeowners seeking release from all liability is to engage in short sale or deed in lieu discussions with the lender or attempt other solutions by working with an experienced real estate lawyer.  For more information, visit my website at www.mattweidnerlaw.com