Foreclosure Defense Florida

Florida foreclosures fraught with peril

CBC News |

“Canadians scooping up southern vacation properties might be buying legal headaches”

“Canadians taking advantage of the U.S. mortgage crisis to pick up cheap vacation properties in Florida could be in for a rude awakening, according to those involved in the legal mess that has entangled the Sunshine State’s real estate market.

Realtor Dorothy Buse stands in front of a foreclosed home in Kissimmee, Fla. Close to 300,000 Florida homes have been involved in foreclosure proceedings. Realtor Dorothy Buse stands in front of a foreclosed home in Kissimmee, Fla. Close to 300,000 Florida homes have been involved in foreclosure proceedings. (Phelan M. Ebenhack/Associated Press) More than 54,000 foreclosed homes are for sale in Florida, and Canadians account for the second-largest group of foreigners scooping them up. Canadians make up 27 per cent of purchasers buying foreclosed property in the U.S.

But the rush by banks to seize homes has led to shoddy paperwork, hasty court decisions, and a lack of effective oversight, industry players say. As a result, buyers may discover they don’t have title to homes they’ve purchased.

“Are there going to be cases where Canadians or others have bought property and they really don’t own that property?” asks St. Petersburg real estate lawyer Matt Weidner.

“I’m here to tell you that absolutely 100 per cent there are going to be cases where people have purchased property and that title is no good.”

In some cases key pieces of paperwork are missing. In others, allegedly fabricated documents have been used to obtain judgments against homeowners. Four law firms are under investigation by Florida’s attorney general for unfair and deceptive practices.

Law firms and banks are also being accused of bringing in unqualified people, such as hair stylists, retail clerks and factory workers, and turning them into foreclosure operatives, signing off on legal affidavits. Some of these workers have testified they barely knew what a mortgage was.

Courtrooms have been jammed with foreclosure cases, leading the state to bring in retired judges to hear the hundreds of thousands of applications. In some instances, a foreclosure case can be dealt with in 20 seconds.

Buyers could lose homes years down the road

As a result of the confusion, fraud, and poor paperwork there is sometimes a lack of clear title on homes being purchased. That leaves a buyer vulnerable to disputes over ownership.

“The weakness of the ownership chain is being exposed,” said title insurance lawyer Gregory Clark. He told CBC News that this could result in claims to return properties to the previous owners.

Those who have lost homes to foreclosure have a seven-year window in which they can contest possession. In a worst-case scenario the new buyer could lose the house. But even if that doesn’t happen, the title on the property won’t be free and clear until 30 years after the purchase. It can’t be refinanced or sold before that.

“It’s a scary situation,” said Toronto realtor Wayne Levy. “I worry for people that have bought foreclosures.”

Weidner advises Canadians to be prudent when it comes to purchasing U.S. foreclosures.

“Go back to whoever you purchased the property from, get your title insurance policy and then hire your own independent attorney to review that policy and to review that transaction, because I no longer have any confidence in the transactions that have occurred.”

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