Matt Weidner – Fighting With The American People

Posts Tagged ‘pinellas county’

Attached here is the latest example of a Pinellas County Circuit Court judge applying the law and sticking up for the rights of homeowners and consumers.  The pattern in Pinellas County, Florida is becoming clear…..the judges here “get it” and are not afraid to issue correct legal decisions–despite the fact that the consequences for banks and their bad behavior is going to be significant.

Read the decision and contact me with questions….these favorable decisions should be cited early and often!

TO: Members of the Pinellas County Florida Legislative Delegation

Dear Members: As you prepare for the Start of the 2010 Legislative Session, I want to thank you for all the good work you are doing for the citizens of the State of Florida and for your neighbors here in Pinellas County.

I am an attorney who represents many of your neighbors in the foreclosure cases that are pending in Pinellas County courts.  The vast majority of my clients find themselves in foreclosure because they or their spouse have lost a job, are facing expensive medical issues or have suffered some other setback that was beyond their control.  By and large your neighbors who are facing foreclosure want to stay in their homes.  They want to continue to make regular monthly payments, maintain their homes and continue to pay the taxes and other expenses related to home ownership.  These good people are simply suffering through the worst economic times of this generation.  With modest payment and term modifications from their lenders, most borrowers would be able to stay in their homes and most would gladly work with their lenders to make these modified payments.

Banks are Not Working With Borrowers

Your neighbors in foreclosure have tried desperately to work with their lender to try and modify their mortgage or come up with some solution other than foreclosure.  I know this because I require my clients to keep a detailed journal of all their attempts to call, write or communicate with their lender.  These borrowers have made dozens, sometimes hundreds of phone calls and faxed paperwork back and forth.  If they hear anything at all, it’s “Sorry we cannot help you.”  Having said that, more often than not, they get no response at all from their lender other than, “We’ve lost your paperwork, please send it again.”  This is not just my opinion or anecdotal information, these statements are confirmed by the information published by the federal government.  As of October 2009, the Federal Government’s Making Homes Affordable program reported that only 82,614 Floridians had obtained a trial mortgage modification.  That same report estimates that nearly 10% of mortgages in Florida are more than 60+ days delinquent.

(See report here)

Banks Are Receiving Billions in Federal Aid

While the federal government has provided at least $50 billion in federal aid to the major lenders in the US Troubled Asset Relief Program (See GAO-09-837 July 23, 2009), the Federal Housing Finance Agency reports that the HAMP and related modification efforts had initiated only 43,000 HAMP permanent modifications and 442,500 active trial modifications as of December, 2009.  Amazingly, according to the latest information published by the Federal government, only 8,405 Floridians have received permanent modifications from their lenders.  One more time so this is clear…..out of more than $50 billion in federal aid, ONLY 8,405 FLORIDIANS HAVE RECEIVED A FORMAL MORTGAGE MODIFICATION. (See report here.) In short, the facts published by the federal government and the mortgage industry show that while the very lenders who helped caused the breakdown of the American financial system are helping themselves to billions of dollars in federal aid, your neighbors are not being helped at all.

A Pig With Lipstick On Is Still A Pig

As my elected Representative in Tallahassee, I hope you are sufficiently aware of the popular uprising against the greed and arrogance of the banks, lenders and Wall Street in general.  As your neighbors here in Pinellas County are struggling to survive these difficult economic times, they’re watching the institutions and fat cats on Wall Street take bigger profits and bonuses than ever before.   While all the obscene profits and general arrogance is bad enough, I hope that you will share my outrage at the bank’s attempts to insult you and other elected leaders and the citizens of the State of Florida when they chose to name their new anti-consumer bill “The Florida Consumer Protection and Homeowner Credit Rehabilitation Act”.  The insult here is there is not the first thing in this proposed legislation that offers any benefit to consumers or homeowners or consumers at all.  I am insulted and incensed that these fat cat, cigar chomping anti-consumer greedy bankers think they can attach a name to legislation which totally misrepresents  the nature of that legislation in the apparent hope that elected leaders and citizens won’t be smart enough to figure out the title totally misrepresents the purpose and effect of the legislation.

The Florida Consumer Protection and Homeowner Credit Rehabilitation Act-  A Dramatic and Totally Unnecessary Change in Florida’s Homestead and Property Rights

From the time Florida became a state, laws relating to a citizen’s homestead were simple.  If law enforcement wanted to get in a citizen’s home, they made their case before a judge and if the judge determined their claims were warranted, the judge granted a search warrant and law enforcement was granted access.  Likewise, if a homeowner defaulted on his mortgage and the lender wants to take the home back, that lender need only prove up that interest up before a judge, then the judge grants foreclosure and the consumer loses possession of his home.  The problem many of the lenders trying to foreclose today face is they cannot or just don’t want to go through the effort to prove even the most basic facts to support their right to foreclose.  Rather than fix the organizational and systemic problems the lenders have created  that would allow them to prove up their right to foreclose, the lenders are asking the Florida Legislature to toss out the property rights rule book and create an entirely new system that would stack the deck entirely in their favor and totally against the homeowner. As a voter, a constituent and an attorney who is on the front lines of this issue and who sees how it affects your neighbors every day, I want to implore you to vote NO against any version of The Florida Consumer Protection and Homeowner Credit Rehabilitation Act.  Please save my information and please contact me directly if I may provide additional information or testify when this bad legislation comes before committee.

Respectfully, Matthew Weidner

I disclaim once again that the foundation for this blog came from an anonymous post I found.  If you recognize the text, please claim credit.

Missing Notes/Fraudent Assignments of Mortgage and the Inability to Foreclose

As described above, lenders and all parties involved in the mortgage finance orgy rushed to close and sells loans so quickly that they failed to get even the most basic sales/transfer/ownership documentation prepared.  This problem with the missing trust assets/promissory notes manifests itself each time MERS and/or the trustees for the bondholders brings a legal action to collect on a debt through foreclosure. Because neither MERS nor the bondholders trustees are holding the notes they lack proof of standing to maintain their legal actions and the actions are subject to dismissal. Many foreclosure actions have been dismissed based upon lack of standing. This a problem that it is a direct result of MERS “system”.

It appears that after MERS mortgage loans are flipped to the mortgage backed trusts the promissory notes are not actually delivered to the trustees. Nor are assignments of mortgages executed and delivered which evidence the fact the original lender has transferred the debt which is secured by the mortgage. This leaves the trusts with absolutely no paper evidence of ownership of the secured debt it purportedly owns. One informed lawyer who represents homeowners in Florida, April Charney, had foreclosure proceedings against 300 clients dismissed or postponed in 2007 for lack of standing. She is quoted as saying that “80 percent of them involved lost-note affidavits”. . . They raise the issue of whether the trusts own the loans at all,” Charney said. “Lost-note affidavits are pattern and practice in the industry. They are not exceptions. They are the rule.” Ms. Charney, started challenging MERS and it members lost note affidavits after becoming skeptical of the a lender could possibly lose hundreds of promissory notes. (April Charney is widely regarded as the Forclosure Defense Goddess across the country. Prior to Charney’s groundbreaking work on foreclosures, defense just focused on delay.  As a result of Charney’s work thousands of lawyers across the county are actively pursuing far more aggressive defense strategies and untold thousands (millions?) of homeowners have benefitted from her work.)

Florida Courts Dismiss Lost Note Cases

At least two Florida judges shared Ms. Charney’s skepticism regarding the copious amounts of MERS lost note affidavits and they issued show cause orders, sua sponte, challenging MERS to show proof that it held and/or lost notes in numerous actions. After evidentiary hearings these two alert judges dismissed twenty nine (29) MERS actions to foreclose for lack of standing. One judge struck MERS pleadings as being sham. (A press release regarding this case can be found on MERS’ own website here. while a St. Petersburg Times article on the subject can be found here. )  A South Carolina court dismissed a MERS action to foreclose for lack of standing even though MERS filed an affidavit wherein a person claiming to be an officer of MERS claimed that MERS was holding a promissory note. The South Carolina court vetted the MERS affidavit claim that it was the holder of the note after being apprised of the fact that MERS had previously told the Nebraska Court of Appeals that it never held promissory notes.

In late 2007 three Federal Court Judges in Ohio dismissed over fifty law suits brought by trustees of mortgage backed trusts where they could not produce the original promissory notes. Following these decisions the Bankruptcy Court in Los Angelas, California adopted a rule of practice which requires all foreclosing trustees or other plaintiffs to produce the original promissory note when bring an action to foreclose a debt or face sanctions for not doing so. Several court in New York have been routinely dismissing foreclosure actions brought by MERS or its members because they continually fail to produce promisssory notes.

Millions of Dollars in “Lost” Property

It is disturbing to know that some of the world’s largest financial institutions claim to be the trustees of thousands of trusts that may be missing millions of promissory notes. Many of these trusts continue to foreclose on properties in an effort to recoup investments they hold in mortgages.  Most of these entities and institutions that have pooled investment or retiree dollars have not adequately disclosed to their investors or beneficiaries the problems they have with lack of ownership and how this problem might impact the investment pool.  However as more borrowers, lawyers and judges learn that neither MERS nor these trustees are actually holding the promissory notes evidencing the debts they seek to collect through foreclosure, dismissals of these foreclosure actions for lack of standing will become routine. As it now has in New York, Ohio and Florida. This will also mean that bondholders from around the globe will be seeking to recover their loses from these institutions who never got around to obtaining the notes evidencing debts that were puportedly owned by these trusts.

A Legislative Fix?

For hundreds of years, foreclosure was a relatively simple matter and there were not a whole lot of defenses that a good foreclosure defense attorney could present.  In this, the MERS/Securitization Decade of Foreclosures, the courts are presented with real challenges.  Courts across the country are struggling to find a solution to the problems caused by the MERS problem and the securitization conundrum because a developing body of case law will prevent lenders from foreclosing on property that they claim an ownership interest in.  As foreclsoure defense attorneys hone these themes and present increasingly sophisticated arguments, Courts will struggle with how they can continue to grant foreclosure when the facts and caselaw provide otherwise.  The  Florida Supreme Court Residential Mortgage Task Force Report and the new Residential Foreclosure Procedures promulgated as part of the Report illustrate the growing frustration Courts are finding with the current foreclosure process.    It may take federal or individual state legislative change to respond to these issues.

1. Title Underwriters Are Going to Go Bankrupt

For as long as any of us can remember, we paid little attention to the title underwriter that was issuing title insurance right? Well those days are long gone.  All of the title underwriters are under extreme financial pressures caused by decline in new premiums and claims on old policies.  The vast majority of new policies being written are being written over foreclosure properties, REO’s and other properties that have a much greater risk of hidden problems and title claims.  Because of this we can expect extreme pressure on these companies and some just will not make it in the long run.  To protect your client, you need to take an active role in considering who will close your deals and you should go the extra step to confirm the title work with your agent.

2. You Must Take A Much More Active Role In Your Closing

The days of turning your contract over to the title company then waiting for your closing date are long over.  You need to be very proactive with your title agent, making sure that all bases are being covered and that all conditions and problems are being actively resolved from the moment the contract is signed.  The days where your involvement in closing was limited to reviewing the HUD when you arrived at the closing are long gone.  Develop a strong working relationship with your title agent and be actively involved in every step of the process.

3. Make Sure Your Listing Agreement and Sales Contracts Reflect The New Closing Realities

In previous postings, I have described where the FAR/BAR Short Sale Addendum is deficient, does not adequately protect sellers and may lead to complaints and litigation against realtors.  The reality is that every contract, from the listing agreement to the sales contract should be modified to reflect the inevitable delays, miscommunications and problems that are now a part of every closing.  If you do not, you can expect complaints and problems at some point in time.

4. Know Your Clients and Their Situation

Every listing agreement should contain explicit instructions that your client must notify you in writing if they are served with a foreclsoure lawsuit.  If they are served with a foreclosure suit, they must retain a local attorney who can properly defend the foreclosure.  Defending the foreclosure creates the space you and your clients need to help effectively negotiate a sale.  If your client fails to respond and a default is entered against them, you lose important negotiating power against the lenders.

5. Know All Parties That Are Involved in Your Closing

Clients these days are approached by all sorts of individuals and businesses who are offering to help them and in some cases take advantage of their situation.  Florida recently passed one of the toughest consumer protection statutes that makes most of these activities illegal and which subjects all parties involved in such transactions subject to penalties and fines.  You may be surprised at all the activities and made illegal, but as the professional involved in the transaction, you are responsible to know these details and take steps to protect your clients!  The text of the statute can be viewed here keep in mind that the language is drafted so broadly that many activities that were once permissible are now illegal.

These are challenging times in the industry and you need to work harder than ever to protect your clients and yourself.  Make sure you’re working with an attorney who knows this market and who can properly advise you.

Visit www.mattweidnerlaw.com

1. Misrepresenting tax consequences.

Although it’s true that the federal government passed a law in 2007 directing the IRS not to count mortgage debt forgiven by a lender as income, the provision is limited. It applies only to purchase money; it doesn’t apply to debt on a cash-out refinancing, and it doesn’t apply to second homes. There’s also a dollar limitation, albeit a generous one ($1 million for married couples filing separately, twice that for joint filers). “A lot of associates are telling people there are no tax consequences,” says Lance Churchill, a short sales specialist and trainer who operates in Boise, Idaho, and San Diego. “But it’s a limited law and you just need to be accurate about it.”

2. Misrepresenting how secondary debt is treated.

Practitioners might mistakenly tell sellers that all the house debt is forgiven once the primary lender approves a short sale. But that might not be the case, Churchill says. Holders of second deeds of trust don’t typically forgive the debt. More commonly, they accept a partial payment, like $2,000; and rather than write off the balance, they sell the balance to a collection agency for another few thousand dollars. In many states, these second loans are recourse, so sellers can be caught by surprise when the collection agency contacts them a year later seeking payment of the debt.

3. Acting on inappropriate lender requests for seller contributions.

It’s not uncommon for lenders to go after money that the sellers have in the bank or in a retirement account before they approve a short sale request. They’ll sometimes seek to put the onus on the real estate practitioner to get sellers to sign over a note for the amount they have in the bank as a condition of sale. But in states where mortgage debt is nonrecourse, lenders have no right to the money, and associates that suggest otherwise to the sellers might be later sued for negligence.

4. Breaching fiduciary duty.

Investors are increasingly executing what’s known as a “double close and flip,” a type of short-sale transaction that can leave practitioners exposed to irate sellers who say they got a raw deal. Here’s what typically happens: Investors insist on handling short-sale negotiations with the lender, freeing up their real estate practitioner to concentrate on finding a buyer. During the negotiations, the investors—often without the practitioner’s knowledge—talk the sellers into turning over the deed. Once the practitioner finds a buyer, the investors do a double closing, buying it themselves at a deep discount and then flipping it to the buyer at the listed price, making money on the spread. “The seller might feel he got less than he would have had the associate done his job and not handed over negotiations to the investor,” says Churchill.

5. Providing poor oversight of a loss mitigation company.

Companies that specialize in managing short sales promise to focus on the complicated details of the short sale, freeing up practitioners’ time to find buyers. But if you take a hands-off approach, you can be charged with negligence if a deal falls apart. “A lot of these companies are fly-by-night or have one person who’s overworked,” Churchill says. “Practitioners are coming back a month later to find no one’s even opened the file.”

6. Lacking the required license to undertake loss mitigation.

It often makes sense for practitioners to take a two-pronged approach with clients facing a difficult time paying their mortgage—first trying to help them accomplish a loan modification (for a fee), and then finding a buyer if a modification doesn’t work. But watch out. Depending on your state, you could need a specific license, sometimes called a credit repair license, to earn a fee for helping owners modify mortgage terms. Without having the right credentials, taking a fee for loan modification assistance could be a criminal offense.

7. Facilitating transactions not listed on the HUD-1 form.

It’s not uncommon for investors to offer incentives to sellers to move a deal forward, but lenders typically frown upon sellers who walk away with money when they’re supposedly taking a loss. Investors sometimes work around this limitation by offering to buy something from the sellers at an attractive price, such as a couch for $5,000. Associates who communicate these offers to sellers can get tied into charges of lender fraud because the deals may be deceptive.

According to information obtained from the Pinellas County Clerk of Court, a total of 1374 foreclosures were filed in Pinellas County from June 1, 2009 to July 1, 2009.  This staggeringly large number of filings represents a crisis that everyone in Saint Petersburg, Tampa, Gulfport, Tierra Verde and the surrounding communities in Pinellas and Hillsborough County must contend with.

Although firm numbers are difficult to come by it is estimated that more than 80% of homeowners served with foreclosure will not retain an attorney or otherwise defend themselves in foreclosure.  Every consumer should hire an attorney who is experienced in foreclosure defense, mortgage modification and general civil litigation to help ensure their rights are protected.

I urge all consumers to aggressively contact their lenders to try and obtain a mortgage modification prior to being served with foreclosure, but the unfortunate reality is that modifications are difficult and very time consuming to obtain.   Many consumers receive a mortgage modification package from their lender just before or shortly after they have been served with the foreclosure complaint and are lulled into a false sense of security thinking that the receipt of the mortgage modification package means they do not have to respond to the foreclosure complaint that was served on them.

The unfortunate thing is that even if the lender agrees to a short term modification, the foreclosure case may continue and a foreclosure sale could be set and held shortly after the short term modification period ends.  Remember you have only twenty days from the date of receipt of a foreclosure complaint to find an experienced attorney who will file an Answer to the complaint and protect your interests.

The good news for consumers is that an experienced foreclosure defense attorney may be able to raise a wide variety of claims and defenses that will at the very least delay the foreclosure process and could lead to a renegotiation of the mortgage on terms that are more favorable to the homeowner.