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Foreclosure Defense Florida

Who’s To Blame When Mortgages Aren’t Modified or Short Sales Are Not Approved? Noone Knows?

In far too many cases, homeowners are refused reasonable modifications and short sales are not approved…and nonone really knows why….or who is making the decisions.   The article attached here and first published on should have everyone thinking.

Why are we allowing billions of dollars in property and capital be transferred by judicial process to corporations that cannot be identified and who engaged in fraud and potentially criminal acts?

One thing we all need to be far more educated about is the fact that the named plaintiff in foreclosure cases is often times just that, a plaintiff in name only.   We know from depositions and the shifty maneuvering of lenders and their affiliates that the real parties pulling the strings are operating in the shadows.   We only begin to understand and appreciate that the Plaintiff doesn’t have real interest in the outcome of the case when their courthouse maneuvering is brought to the attention of judges…and this is often met with a shrug of the judicial shoulders.

How many ex-parte Motions to Substitute Party Plaintiff, Assignments of Bids or Post-Judgment Change in Certificate of Title Orders have been entered in courtrooms all across this state and across the country? (The answer is probably tens of thousands, but because no-one is watching, who knows?)

How many Assignments of Mortgage or Endorsement of Note were entered when the authority and veracity of these important documents was questionable at best. (The answer is definitely in the hundreds of thousands.)

How many foreclosure cases have been filed where the capacity of the plaintiff seeking to invoke the court’s power has been properly pled? (By my estimation the number is fewer than 10% of the cases filed in this circuit and I doubt whether this is number is higher in any other circuit.)

I get back to those key questions that continue to perplex me…..

Why are we allowing billions of dollars in property and capital be transferred by judicial process to corporations that cannot be identified and who engaged in fraud and potentially criminal acts?

Why are our circuit courts just ignoring basic elements of rules and law just so they can plow through these foreclosure cases?

Why the big rush to conclude these foreclosure cases?   What’s going to happen to all the foreclosure inventory?   Who can afford to purchase all the foreclosed REO homes?

For more on that last question, read another article that appeared on that reports lenders taking back more than 4,000 properties per month in South Florida.   This number will only accelerate as courts adopt the new Rocket Docket procedures, but what in the world are the lenders going to do with these properties once they get them….I’m thinking it will be a big case of, “Be careful what you wish for, because you might not like what you get……”


  • michael says:

    This is happening because Fannie, Freddie, and the rest of the Corporate Welfare Queens are valuing their government subsidies at nothing, but their REO fees as revenue.

    So a note with a face value of, say, $500K that secures a property worth, say, $250K can be restructured for a $100K loss, most of that lost interest on long-term deferred zero-interest principal.

    But it can be foreclosed on with an immediate $250K loss, covered by taxpayers, and a $10K REO fee.

    If Treasury wasn’t covering the losses the right answer would be a no-brainer; renegotiate the paper. Even with moral and legal ramifications aside it makes the most financial sense. But TARP and its cousins have turned the financial decisions upside-down.

    So Congress enables bad financial decision making, judges ignore the law in the name of judicial efficiency (of course, tossing a coin to decide all case outcomes would clear all civil and criminal dockets, but we don’t do that), and the wheels of this strange machine keep chugging along.

    We’ve figured out the “how” … what doesn’t make sense is the “why?” Why borrow money from future generations — gutting schools, ignoring infrastructure, putting the country in a financial hole it will never dig itself out of — to enable this to continue?

  • sarasotarealtor says:

    All good questions, Matt.

    4,000 properties /month only begins to address the very REAL issue of “shadow inventory.”

    For people who don’t know what shadow inventory is, think of that abandoned, overgrown house (once manicured but now moldy, disgusting) sitting empty for months…maybe YEARS.

    When the bank eventually forecloses, receives Certificate of Title & lists it, only a bargain hunter will make a LOWBALL offer.

    Shadow (horribly distressed) Inventory will drop values in neighborhoods even more. In my own “nice” neighborhood, we have 6 of these shadow properties.

    When no other NON-distressed properties are selling, what is an appraiser to do to determine your NON-distressed property’s value?

    This happened recently to a neighbor who wants to refi. Neighbor is not distressed…wants to refi out of ARM to FRM. Appraised value shocked her…..

    In the meantime, my colleagues (realtors) and local boards of realtors do their normal cheerleading about how many houses sold last month or the month before…suggesting all is (now) well.

    All is NOT well:

    1. People still are losing jobs.
    2. Houses still are underwater.
    3. Homeowners still are strategically defaulting.
    4. Debt owners still are NOT modifying or restructuring mortgages with principal reduction.

    What will banks do with expanding distressed inventory, you ask. I’ll tell you, as I list & sell REOs.

    They will DUMP these properties just to get rid of them. They do NOT care about killing property values.

    On many of these properties the banks will have had an opportunity to modify and/or short sell the property BEFORE it became an even more distressed property now selling for a helluva lot LESS.

    A few years ago, this absurdity drove me crazy.

    How could a “bank” refuse a modification or short sale, only to lose more money for investors when the property eventually sold for $1,000s LESS? I can prove many occurrences where this has happened.

    But it doesn’t matter one iota.

    For those of you thinking it’s getting better, I have news for you: it isn’t!

    BOA now forces a borrower to be delinquent before considering short sale with documented hardship.


    Mike the “confused, frustrated” Sarasota Real Estate guy

    P.S. Keep up the great work, Matt. I appreciate the work you do on behalf of homeowners. I have referred many people to your blog.

    Question: Do you provide legal counsel to borrowers considering short sale, needing to seek legal counsel re: potential consequences? Three homeowners contacting your office reported back to me you’re not handling such cases. Are you focusing on foreclosure defense?

    I want to know this, as I believe you are HELPING people with an aggressive approach not seen in all attorneys.

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