Matt Weidner – Fighting For The American People

Archive for August, 2009

A critical question affecting homeowners who are caught in a foreclosure problem is whether they will face 1099-c tax liablity from the IRS.  In short, if the lender has a mortgage on your home for $200,000 and the home is sold in foreclosure and the bank only recieves $100,000, the lender will issue to the borrower and the IRS a 1099-C Notice of Debt forgiveness.  In some circumstances, the borrower would owe the IRS their maximum tax rate on that amount, so if a homeowner were is a 28% tax bracket, she could face a $28,000 tax liability.  Given the serious financial consequences of this issue, it is critically important that any borrower engaged in a short sale, deed in lieu or other transaction understand the specifics involved in these transactions.

Each fact situation is different and there are ways to reduce or eliminate the tax liability entirely for the homeowner, but all of this must be taken into consideration prior to agreeing to any transaction.  The general rule is that homeowners may not face liability when the transaction relates to their homestead or primary residence, but the homeowner may face liablility when the property is a second home or investment property.

Having said that, each situation and the rules that apply are complex.  For advice on your specific situation, contact Matt Weidner at www.mattweidnerlaw.com!

As an attorney representing clients in foreclosure throughout Pinellas, Pasco and Hillsborough Counties, I meet clients every week who have been targeted by mortgage modification, foreclosure rescue or other real estate-related scams.  Florida Attorney General Bill McCollum has formed an Interagency Task Force made up of representatives from dozens of public and private agencies who are on the front line of the mortgage crisis.

The Task Force will hold a Town Hall Meeting, Saturday, August 15, 2009 from 8:00-1:00 at the Stetson Law School, 1700 North Tampa Street, Tampa.  Anyone facing foreclosure or who has any interest in this foreclosure crisis is encouraged to attend.  Visit http://myfloridalegal.com/mfraud.nsf/pages/Meeting for more information.

The Attorney General’s Office is to be commended for taking a very proactive and aggresive approach to dealing with the foreclsoure crisis and they deserve the support of the attorneys and legal community who often see the results of illegal activity first hand.  If you’ve been the victim of foreclosure or mortgage fraud, visit my website at www.mattweidnerlaw.com.

When a homeowner is in foreclosure and does not desire to stay in the home, but merely wants to walk away from the home and the mortgage they are faced with three options;

1) just walk away and don’t work with the lender at at all;

2) convince the lender to accept a deed in lieu of foreclosure;

3) convince the lender to accept a short sale.

Of the three options, just walking away is most certainly the worst option to choose.  Every borrower has a contractual and to meet their contractual obligations and if they cannot meet that obligation, they have a moral and ethcial obligation to try and work with the other party.   Failure to do so subjects the homeowner to the greatest liability both for the underlying mortgage debt and for liabilities and damages associated with the property.

The next option for a homeowner is to try and convince the lender to accept a deed in lieu of foreclosure.  In this scenario, the borrower admits to the bank that he cannot or does not want to fulfill his obligations and asks the lender to allow him to deed the property in exchange for a release from any further liability on the mortgage.

The third option is to present the lender with a short sale, or an offer to sell the property for less than the value of the outstanding mortgage balances. Of the three options, this is certainly the most beneficial both to the lender and to the borrower.  When a short sale is negotiated and closed properly, the lender accepts an agreed upon amount and releases the homeowner from any further liability.  In this very difficult real estate market, real buyers are king and if you can bring this to the table, you’ve helped resolve a major problem for the lender–vacant property with accumulating liability.

Each option presents its own positives and negatives and the homeowner must always watch for 1099-c tax liability http://www.bankrate.com/brm/news/debt/20060303a1.asp associated with the consummation of any transaction.   Always seek the advice of an attorney experienced in mortgage law and these types of transactions, for more information visit my website at www.mattweidnerlaw.com.

I’ll answer the specific question, “Who has the right to file a foreclosure lawsuit in ?” in a bit, but I want to begin from another direction.  The first question a competent attorney should ask is, “Does the plaintiff who is suing my client have the right to file a lawsuit in Florida against my client?”  The fact of the matter is that a variety of statutes and rules prohibit various persons and entities from availing themselves of the jurisdiction of Florida courts.

Minors may not alone avail themselves of the jurisdiction of any court of this state; neither may individuals who are otherwise incompetent.  Minors and incompetents may only access the courts of this state through guardians or other legal representatives.  Personal representatives appointed by in estates opened in other states may not maintain suit in this state.  An ancillary estate must be opened in this state.  Businesses operating as a fictitious name may not maintain suit.  Only the individual who runs that entity may file suit.  Foreign corporations not registered with the Secretary of State may not maintain suit in this state.  They must first register as a foreign corporation.

This brings me to a problem I’ve long had with the sloppy, potentially misleading and incomplete pleadings filed by foreclosure law firms across the State of Florida.  In first year law school we learned that when you drafted a lawsuit, the caption of the lawsuit was, “Acme Corporation, a Florida Corporation Plaintiff v. John Q. Citizen, Defendant”  Paragraph one stated, “Acme Corporation is a Florida Corporation properly registered with the Secretary of State”.  Paragraph two stated, “John Q Citizen is a resident of Pinellas County”  Paragraph three stated, “Damages exceed $15,000″.  These elements are required to comply with Florida Rules of Civil Procedure Rule 1.120 which provides:

(a) Capacity. It is not necessary to aver the capacity of a party to sue or be sued, the authority of a party to sue or be sued in a representative capacity, or the legal existence of an organized association of persons that is made a party, except to the extent required to show the jurisdiction of the court. The initial pleading served on behalf of a minor party shall specifically aver the age of the minor party. When a party desires to raise an issue as to the legal existence of any party, the capacity of any party to sue or be sued, or the authority of a party to sue or be sued in a representative capacity, that party shall do so by specific negative averment which shall include such supporting particulars as are peculiarly within the pleader’s knowledge. http://www.floridacivpro.com/Rule1120.php

A survey of foreclosure cases filed across the state reveals that the foreclosure law firms that churn out thousands of poorly drafted lawsuits a day almost never properly identify the capacity of the Plaintiff who brings the action as required by the Florida Rules of Civil Procedure.  This is not just an example of sloppy pleading that courts should look the other way and ignore, it violates the Florida Rules of Civil Procedure and prevents a Plaintiff from availing itself of a fundamental right–the right to know exactly who it is that is bringing suit against her.  When the Plaintiff’s entity status is not pled in the complaint, Defense counsel should file a Motion to Dismiss the Complaint alleging that the Plaintiff has not alleged the facts it needs to invoke the jurisdiction of the court.

There are very few reported Florida cases that are squarely on point and which would convince a judge that  Plaintiff’s poorly drafted complaint should be dismissed, but there are many other cases out there and some very persuasive authority that can be used to have cases dismissed when the entity status is not properly pled. This is fantastic, earth shattering, game changing infomation that I will make available to consumers and foreclosure defense counsel upon request.  Visit my website at www.mattweidnerlaw.com for more information.

In March 2009, the Obama Administration announced a new mortgage modification program that promised relief for the millions of homeowners behind on their mortgages or in foreclosure. Program guidelines can be found at http://www.ustreas.gov/press/releases/reports/modification_program_guidelines.pdf .

On Tuesday the Treasury Department released a report which indicates that only 400,000 borrowers have even been offered help while only 235,000 have actually entered the program.  There are wide disparaties in which mortgage companies are actually getting loan modifications done with JP Morgan Chase having 79,000 loans in modification while Bank of America has only 28,000.

A problem with the program is that the first step provides only a trial modification for homeowners, requiring them to make three monthly payments before being considered for a full modification.  In September the program requires mortgage companies to begin telling some homeowners that they do not qualify for a full, long term modification.  For those lucky few homeowners who are in a trial modification, it will likely come as a unpleasant surprise to learn that they’ve paid into the program only to get rejected in the long run.

What’s most concerning is the relatively small number of homeowners who have been considered for the programs, a fact that is particularly disturbing given the millions of Americans who are behind on their mortgages or in foreclosure.  If you’re finding it difficult to get through to your mortgage company, you’re not alone.  Deloitte and Touche reports that call volume for mortgage servicers is up 500%.  If you have submitted a loan modification package and don’t have an answer, keep in mind that in 2008, loan modificaiton employees were responsible for reviewing 50-80 files while they are now reviewing 200-300 files….you may be waiting for an answer to your loan modification request for a long time.

Don’t go it alone when trying to navigate this mortgage crisis. Hire an experienced real estate attorney to help you.  Contact me at www.mattweidnerlaw.com.

According to records obtained from the Pinellas County Clerk of Court there are 92 court ordered foreclosure cases scheduled to be held in Pinellas County between August 15 and September 15, 2009.  You can review the list of foreclosure sales by visiting the Pinellas County Clerk of Court website at https://pubtitles.co.pinellas.fl.us/login/loginx.jsp?goto=/mainmenux.jsp

After reviewing the sales that are scheduled there are several things that I find particularly compelling.  First, with all the talk of a foreclosure crisis, a grand total of 92 sales during this time period is hardly an overwhelming number.  Second, most of the properties that are set for sale do not appear to be for particularly valuable properties or properties where the borrowers have much equity in them.  I don’t mean to diminish the difficulty that will be faced by those families that will lose home to foreclosure, the point is if the family doesn’t have much equity in the home they’re not really losing much anyway.  Finally, a quick review of the cases reveals that most were filed in late 2008, many were filed in January 2009 and the smallest number of cases was filed in 2007.  A rough estimate is that it takes a lender more than a year from filing to sale, and I would say this comes when the case is not properly defended by an experienced foreclosure defense attorney.   The length of time it takes for a case to proceed from filing to foreclosure sale is an illustration of the problems within the mortgage industry, their inability to produce the documents necessary to prove their right to foreclose and the fact that the courts are still overwhelmed with a backlog in foreclosure cases.

This analysis has important implications for homeowners facing foreclosure, investors or purchasers who are looking to purchase property and for lenders who are seeking to address delinquencies in their existing mortgage portfolios. Homeowners who are in foreclosure have the most to gain by hiring an experienced foreclosure defense attorney who can knowledge of the breakdowns in the system to negotiate their desired outcome.  Investors or potential purchasers can benefit from my first hand experience is knowing what the bottom line price on a property is while lenders who need management of their mortgage portfolio will benefit from a practical results-oriented approach to resolving their case rather than absurdly unprofessional and inefficient management of their portfolios that they are receiving from the high volume “foreclosure mills”.

Now more than ever, proper legal advice from an attorney with years of experience is critical.  Visit my website at www.mattweidnerlaw.com for more information and contact me directly if I can provide additional information.