Friday, December 2, 2011

Lost Notes Are Making It Difficult For Banks to Foreclose

It has been a while since I posted to this blog. I have been busy with work, my main blog and all of the other noise. I posted something to my main blog,, that I know is very important so I want to share it anywhere I can. The blog post discusses the new front on defending foreclosure cases, especially when there is a lost note. In a lot of the cases we handle, the bank/lender/plaintiff in the foreclosure lawsuit includes a claim for a lost note. With that type of count, comes a higher burden for the bank to prove and foreclose on the homeowner because of standing issues related to proving the chain of title to the lost Note. In many instances, that higher burden is expensive and difficult to meet. I think this new line of attack will be very helpful to Florida homeowners struggle in this "recovery." I urge you to read the article. Happy Holidays!

Wednesday, March 30, 2011

JPMorgan Chase sues Ben-Ezra – Is it all about the money or some other reason why the lawyers won’t give their client back their files?

It was reported today that JPMorgan Chase Bank filed a lawsuit against foreclosure firm Ben Ezra & Katz. I wrote early last month that this same firm had been fired by Fannie Mae for alleged document process irregularities. Apparently, JPMorgan terminated a foreclosure servicing agreement with Ben Ezra earlier this month, which prompted JPMorgan to demand the return of all foreclosure filing and records in connection with JPMorgan cases. In the lawsuit, the bank is claiming that Ben Ezra has not complied and JPMorgan is now attempting to compel the return of thousands of foreclosure documents. Ben Ezra claims that the firm has been responsive and acting in good faith in response to JPMorgan's requests. The lawsuit complaint states that the law firm refuses to return the files because it claims it is owed $5 million. Notwithstanding the claim of money owed, this lawsuit peaks my interest. I'm interested to know if there are other reasons why Ben-Ezra won't turn over documents. Are there irregularities in these documents that Ben-Ezra doesn't want to JPMorgan to see? I will be watching this closely to see if this dispute will shed any new light on the behavior of the banks and their lawyers that will help my clients. We will see, at least I hope so.

Wednesday, March 9, 2011

HOA & Condo Association Foreclosure – Keep Making Those Payments

I'm currently representing a client that is being foreclosed on by their condo association. Typically it's the bank that is the foreclosing party. These days, when the association forecloses it is uncommon for anyone other than the association to bid on the unit, as whoever purchases the unit will take title subject to the mortgage. Taking subject to the mortgage means that the bank can subsequently come in and foreclose. One reason the associations goes through this process is because by taking title they are able to rent the unit and recover some of their losses until the bank goes through with their foreclosure. So you're probably asking, who is on the hook now for past unpaid amounts due to the association? Florida law provides that a new unit owner is on the hook for all unpaid assessments that are due before title was transferred. The answer is different if the mortgagee (the bank) takes title to the unit. They are only required to pay the lesser of three amounts specified in the law. Regardless, the association can remove you for not paying maintenance and assessments, so keep up with those payments.

Wednesday, February 23, 2011

Who Should Florida Tenants Pay Rent to When the Home They Are Renting is sold at a Foreclosure Sale?

Recently, I was asked a question by a client, who rents a home, what are his rights as a tenant when the property he is renting is in foreclosure. I advised him that as long as he is a bona fide tenant under the Protecting Tenants at Foreclosure Act (PFTA), that PFTA permits him to continue his tenancy for the remainder of his lease or 90 days from the date he received notice of the foreclosure, whichever is greater. However, the PFTA doesn't answer one interesting question; who does the tenant pay the rent to once the property is sold at a foreclosure sale? The simple answer is the new owner, but the answer may not be so simple. Often times the landlord/property owner who lost the property will file an objection to the foreclosure sale or file a motion to set aside the foreclosure judgment for various reasons. Even though a certificate of title has been issued and seemingly ownership has changed there remains a cloud hanging over title to the property because of the looming objection or motion. In light of all of the foreclosure fraud, we have advised some clients, our advice varies depending on the facts of each case, to continue to pay the landlord until the objection or motion is heard by the Court. However, each case is different and the prudent thing to do may be to pay the rent into the Court registry. It's recommended that you contact a local real estate lawyer to review your particular circumstances. The foreclosure mess just won't end.

Friday, February 11, 2011

Fannie Mae Fires Florida Foreclosure Law Firm Ben Ezra – Does The Court look at Foreclosure Files From That Office With an Extra Level of Scrutiny?

This isn't the apprentice, but someone got fired. It was announced yesterday that Fannie Mae fired Ben-Ezra & Katz, P.A. Ben Ezra is the second South Florida foreclosure firm that Fannie Mae has fired in the last couple of months. The Law Office of David Stern was the first to be fired for alleged document process irregularities. Fannie Mae sent a letter to Ben Ezra Thursday afternoon informing them of the news. A Fannie Mae spokeswoman stated that they "became aware of certain document execution issues at the Ben Ezra law firm regarding its processing of foreclosure cases on Fannie Mae's behalf." Fannie Mae advised its mortgage servicers to move any files currently held with Ben Ezra to other firms within Fannie Mae's Retained Attorney Network in Florida. Fannie Mae gave a February 15 deadline for servicers to find new firms to handle the Ben Ezra cases.  When we review a file for irregularities and it's a David Stern or Ben Ezra file, we look at the file with extra level of scrutiny; I wonder if the Courts do too? If you have lost your home to foreclosure or are in foreclosure and either of these firms are involved, I would have a foreclosure lawyer review it for signs of "issues." Most defense attorneys offer a free initial consultation. Anyway, I wonder who'll be next to be axed.

Monday, January 31, 2011

Title Insurance and Foreclosures Defenses – Title Insurance Companies are Sticking Their Heads in the Sand

I was involved in a real estate transaction where my client was buying a foreclosure from a bank that purchased the property at auction as the high bidder. When the client came to me, she had already hired a title company to handle the closing and issue title insurance. I requested a copy of the title commitment from the title company and asked if they were going to review the foreclosure file for any issues, including fraudulent affidavits. The title company told me that it was not required to do so, that I could perform some due diligence if I wanted to.

I advised my client of the issue, informing her that she was buying a property that could have a potential title claim related to the former owner asking for their property back. I suggested that I review the file to let her know the likelihood of that happening. I explained to her that the underwriter stated that, "We review the dockets in REO (bank owned) properties. We do not review copies of service returns or affidavits of indebtedness in foreclosure files unless there is a question raised by the review of the docket, such as lack of service return or a Motion or Objection challenging the foreclosure. As for the Affidavit of Indebtedness, there is no way for the title examiner to determine whether an Affidavit of Indebtedness was proper or not, barring an Objection and/or court order regarding same. When you order your closing update, however, we also update the docket to make sure that no new challenge to the foreclosure proceeding has been filed in the court file."

That answer troubles me a bit in light of some recent court rulings. Additionally, I was taught to always review the foreclosure file before issuing a title insurance policy. If you have your lost your home or are buying a previously foreclosed upon home, I would suggest you contact an attorney for a free consultation to discuss your rights. It's the smart thing to do.

Monday, January 24, 2011

Facing Foreclosure? Bankruptcy Should Be a Last Resort

When faced with foreclosure, more and more homeowners that I speak with think bankruptcy is their only option to either extend the time they can stay in their home, or avoid a deficiency judgment. Unfortunately, they are mistaken. Bankruptcy, in most cases, should always be a last resort and any experienced bankruptcy attorney should tell you that.

I explain there are other options including short sale, mortgage modification, deed in lieu or setting aside the foreclosure judgment. Often times because they are in a panic to save their home a homeowner will file for bankruptcy protection without thinking of the consequences. A bankruptcy will stay on your credit report for seven years, significantly lower your credit score and place you in a negative credit light. In addition, there is still a stigma that is attached to bankruptcy. Some employers will hesitate to hire someone with a poor credit score or bankruptcy filing on their credit report.

We are bombarded with advertisements from bankruptcy attorneys touting bankruptcy as the end-all solution to financial problems. I suggest that you talk to a foreclosure defense lawyer to find out how they can help. Get a full run-down of your options, and you may find out that you can save your home and avoid bankruptcy at the same time. Most foreclosure defense attorneys offer a free initial consultation.

Wednesday, January 19, 2011

Mortgage Modification is No Guarantee to Preventing a Foreclosure Sale

I can't believe it is still happening. Just the other day, a new client came to us for help because his home was sold at a foreclosure sale, despite his mortgage company having told him that his loan modification had been approved. During the modification process, he asked bank representatives several times whether he should be concerned about the impending foreclosure sale. They told him that he would not have to worry about the sale because his loan modification was approved.

Weeks later, he discovered a notice on his front door explaining his rights about leaving the property. The property was sold at the foreclosure sale to the bank, which I think is truly unbelievable and unconscionable. Of course, we are preparing a motion to set aside the judgment based in part on an estoppel theory, meaning the bank should be prevented from having foreclosed because our client had relied on representations made by the bank.

You can't trust anyone these days, especially the banks. When it comes to safeguarding your home, you may not want to face the lender alone. Speak to an experienced foreclosure defense attorney and get everything in writing.

Friday, January 7, 2011

Massachusetts Ruling May Open The door to Voiding Florida Foreclosures

An important development happened today that could have far reaching implications on the foreclosure mess in Florida. The Massachusetts Supreme Judicial Court ruled today that, under Massachusetts law, any effort to foreclose a mortgage by a party lacking "authority" to carry out a foreclosure is void. The Court held that foreclosure plaintiffs, most of which were securitized trusts, could only foreclose and sell a homeowner's property if they were assignees of the mortgage at the time required under the law. In broad terms, since the banks didn't follow their own rules for transferring mortgages, a foreclose by a bank that owned or held a mortgage by way of a defective assignment is void.

Another way of saying that is if a mortgage is not properly assigned in Massachusetts, a bank/lender cannot foreclose. The issue of improper assignments and their enforceability is a defense that experienced Florida foreclosure defense attorneys have been raising for a while now.

In its opinion, the Massachusetts highest court cited a 1990 Florida appellate court case that held a foreclosure action could not be based on assignment of mortgage dated four months after commencement of the action. Additionally, the banks in the Massachusetts case conceded that assignments of mortgages in blank did not constitute a lawful assignment of the mortgages, which should help defense attorneys in those types of cases. Also, the Court discussed other issues which may be helpful to homeowners, including matters related to the concept of the mortgage following the note.

Basically, this was a win for homeowners. This ruling may open the door to invalidating some foreclosures and force loan originators to buy back mortgages wrongly transferred into loan pools. Stay tuned.