Florida Foreclosure Defense Lawyers Blog

Predatory lending is a term used to describe lending practices that are considered unfair or fraudulent. Predatory lenders often target consumers who can least afford to lose money. They incorporate high-pressure sale tactics, set inflated interest rates, and often demand unaffordable repayment terms. Many times, homeowners are tricked into taking out a loan that they cannot afford to repay and risk losing their home to foreclosure.

To combat predatory lending in Florida, lawmakers enacted the Florida Fair Lending Act to prohibit predatory tactics on high cost home loans, including:
• Charging prepayment penalties for longer than 3 years;
• Increased interest on loans going into default;
• Balloon payments on loans that mature in less than 10 years;
• Extending credit regardless of a borrower's ability to pay;
• Calling a loan due even though the borrower has complied with the terms of the
loan;
• Refinancing a loan during the first 18 months, unless there is a benefit to the
borrower;
• Charging late fees that exceed 5% of the payment;
• Making changes to the loan's terms without disclosing the changes

In recent years, the foreclosure rate in the United States has increased significantly. While many foreclosures arise from poor debt management, some can be attributed to predatory lending. Unfortunately, most borrowers will not become aware that they were victims until they are facing foreclosure.

If you are concerned you may have been the victim of predatory lending and are struggling with foreclosure, call a Jacksonville Foreclosure Defense Attorney today! Together, we will fight for you to keep your home!

What is going on in with all of the Foreclosure craziness? This has been the question for millions of homeowners dealing with the potential loss of a home right now. People have heard the horror stories of predatory lending, and the other stories of unqualified homeowners working with brokers to deceive lenders to get financed. But many mortgages fall somewhere in between, leaving big question marks in place of answers the housing market desperately needs.

As a greater number of questions are pouring in, however, searching for answers has become a daunting task. MIllions of homeowners are in a struggle to hold onto their loans while batting off multiple lenders. The problem is many of the original brokers and lending companies have since gone out of business or been the subject of criminal charges stemming from their faulty practices. Often times, the loans in question have been securitized into a mortgage-backed trust. The issue underlying this confusion is that no one knows whom the owner of the note and mortgage actually is. This is largely because of one four-letter acronym, MERS.

MERS (Mortgage Electronic Registration System), a service created to track mortgage transfers, was created in 1994. MERS replaced the old system of "walking" every important mortgage document to the County Clerk's office. With this shortcut in place, lenders were able to save millions of dollars in local recording fees and started transferring mortgages at a pace that, we would later learn, was far too much to handle. So grueling, in fact, MERS failed to properly follow state and local laws in documenting these transfers. Now when it comes time to foreclose instead of documenting each transfer, MERS allegedly signs the mortgage from the original lender to the most recent owner.Many courts are now deciding whether MERS has actual standing to foreclose.

There are things you can do to be prepared for or stave off a potential foreclosure. One of the most important is to communicate with your lender. If you are facing the prospect of foreclosure, contact a Florida Foreclosure Defense Lawyer or a Jacksonville Foreclosure Defense Lawyer today to determine what foreclosure defenses may be available in your specific case.

Prior to the onset of the foreclosure crisis, Washington Mutual (WaMu) rewarded its employees for pushing high risk loans on homeowners who were getting mortgages from the company. The company created a bonus package which rewarded employees for giving homeowners pick-a-payment loans or non-prime loans instead of a fixed-rate 30-year mortgage. Some of the bonuses included $1,000 gift cards which were payed for at the expense of the home buyers. The U.S. Senate Permanent Subcommittee on Investigations released a report detailing the incentive campaign which contributed to the downfall of America's sixth largest bank. Florida is discussed in detail throughout the report because WaMu had a high concentration of its loans in Florida.

Former chairman of Taylor, Bean & Whitaker, Lee Farkas, has been found guilty of 14 counts of fraud. All of the charges stem from a multi-billion dollar fraud orchestrated by Farkas. The fraud brought on the demise of the Taylor, Bean & Whitaker and Colonial Bank. Taylor, Bean & Whitaker was the largest non-bank mortgage lender in the United States in 2009. Government housing agencies quit doing business with Farkas after improper bookkeeping practices were uncovered. Additionally, Farkas was convicted of attempting to fraudulently obtain $550 million in TARP funds for his primary lender Colonial Bank. Colonial Bank did not receive any TARP funds. Farkas has yet to be sentenced.

Simply stated, you cannot be "pre-approved" for a mortgage and being "pre-approved" does not ensure that you will be able to obtain a mortgage. Mortgage brokers and financial institutions use "pre-approval" as a marketing device.

Typical, pre-approval comes into play when a potential homebuyer visits a financial institution to see if they can qualify to purchase a home. The potential homebuyer is told they have been pre-approved, then enters into a contract to buy a home. The financial institution then looks at the potential buyer's credit history and employment; then endorses the loan.

However, the financial intuition can still turn the potential buyer down for a mortgage. Financial institutions use various reasons to turn down a mortgage where the potential buyers were pre-approved; such as the potential buyers failed to fulfill their obligations of the underwriting process or by simply stating the pre-approval was for a limited period of time.

In other words, a mortgage is not guaranteed until sitting at closing and the check from the financial intuition is given to the seller. Schemes such as being told you are "pre-approved" for a mortgage may be a sign of predatory lending, so be aware. If you are facing a Florida Foreclosure Lawsuit and you feel that you have been the victim of predatory lending, contact a Jacksonville Foreclosure Lawyer or a Florida Foreclosure Lawyer today.

The new Federal Consumer Financial Protection Bureau has announced that it will begin testing a new standard mortgage foreclosure form beginning in May. The forms will be major revisions of the two forms that borrowers receive when taking out a new mortgage loan. Consumer advocates believe the old forms are confusing to many homeowners and one of the major initial tasks of the Consumer Financial Protection Bureau is to "make mortgages more consumer friendly" and to make the costs associated with taking out a mortgage more clear,

The new forms will be overhauls of the forms required under the Truth in Lending Act of 1968 and the Real Estate Settlement Procedures Act of 1974. Consumer advocates believe that the forms are confusing and too lengthy for many homeowners to fully understand. Officials with the Consumer Financial Protection Bureau have been working diligently on the format and content of the new forms with members of banks and others in the housing industry.

While many people will call these efforts little more than a trivial step toward fixing the foreclosure mess, clear understanding of the costs and ramifications of purchasing a home is an important step. If you are facing a Florida Foreclosure Lawsuit and you believe that you were a victim of predatory lending, contact a Jacksonville Foreclosure Defense Lawyer or a Florida Foreclosure Defense Lawyer today to see what defenses may be available to you.

The California Attorney General has announced that the state will use the $6.5 million settlement it received from two former Countrywide Financial Corp. executives to create a fund to assist foreclosed homeowners. The two executives, Angelo Mozilo and David Sambol, were accused of luring buyers into mortgages they could not afford by offering low teaser rates, imposing large prepayment penalties, failed to fully inform buyers of the downside of adjustable-rate mortgages, etc.

The lawsuit also alleged that Countrywide did not comply with industry lending standards in order to make higher numbers of loans and the two executives, Mozilo was the CEO and Sambol was the President, knew about these practices and did nothing to stop them. The monies will be used "to help Californians affected by the mortgage crisis by providing grants to agencies that help homeowners facing foreclosure with relocation assistance and providing money to state and local agencies to prosecute mortgage fraud" according to the Attorney General's Office. California has remained among the top three states with the highest foreclosure rate since the housing crisis began in 2007.

If you are facing a Florida Foreclosure Lawsuit from Countrywide Bank, contact a Jacksonville Foreclosure Lawyer or a Florida Foreclosure Lawyer today to see what foreclosure alternatives may be available to you.

For the second time in the last 4 months, Federal mortgage giant Fannie Mae has fired one of the notorious "Florida Foreclosure Mills" when it announced that it will no longer refer foreclosure cases to Ben-Ezra & Katz. Fannie Mae sent a notice letter to all servicers who service Fannie Mae mortgages that payments to Ben-Ezra & Katz should be stopped immediately and instructs servicers to find new law firms to handle Ben-Ezra & Katz cases.

In an announcement from the mortgage giant, Fannie Mae spokeswoman Amy Bonitatibus stated "Fannie Mae has become aware of certain document execution issues at the Ben-Ezra law firm regarding its processing of foreclosure cases on our behalf" and "it is our expectation that law firms will handle matters in strict compliance with proper procedures, ethical codes of conduct and legal requirements." Ben-Ezra & Katz released a statement saying it was "disappointed and surprised by Fannie Mae's decision and that the issues Fannie Mai is referring to were technical paperwork problems that the firm is correcting."

This marks the latest blow to one of the notorious "Florida Foreclosure Mills", coming on the heels of the realization that at least three more law firms are being investigated by the Florida Attorney General's office for their foreclosure practices. Will the same problems that have plagued the Law Offices of David J. Stern after they were terminated by Fannie Mae resurface at Ben-Ezra & Katz? If you are facing a Florida Foreclosure Lawsuit, contact a Florida Foreclosure Defense Lawyer or a Jacksonville Foreclosure Defense Lawyer today to see what foreclosure defenses may be available to you.

Many of the nations largest insurance companies are joining forces in order to sue Bank of America for "mortgage fraud." These are the insurance companies: Dexia Holdings, FSA Asset Management, New York Life Insurance Company, The Mainstay Funds, Teachers Insurance & Annuity, TIAA-CREF Life Insurance, and College Retirement Equities Fund. MBIA, a holding company who provides financial guarantee insurance, found that in approximately 19,000 Countrywide loan files, at least 91% of the loans are either in default or delinquent, and appear to contain material deviations from Countrywide's underwriting policies.

The issues for Bank of America stem from loans originated by Countrywide which Bank of America purchased in 2008. Many of the Countrywide loan applications for the non-performing loans were replete with omissions. Repeatedly, mortgage origination files did not have verifications showing borrower income, had invalid appraisals, and failed to show what the debt-to-income ratio or the borrowers credit score was.

In the coming months, it is likely that Bank of America will be battling billions of dollars in damages the insurance companies are seeking. If you are facing a Florida Foreclosure Lawsuit where Bank of America is the Plaintiff, contact a Jacksonville Foreclosure Defense Lawyer or a Florida Foreclosure Lawyer today to determine what defenses may be available to you in order to save your home.

One of the major questions that many people have been asking about the foreclosure mess is "Why did banks made millions of loans to people who could not afford their mortgage?" The banks were supposed to verify that applicants had the ability to repay back loans. This process is called underwriting. The banks stopped underwriting because they knew that the risk would be passed to investors through the securitization process.

The banks became sloppy in their paperwork and allowed fraud to run rampant. Banks hired untrained temps to replace retiring veterans to speed up the applicant review process, and took more copies, faxes, and phone calls instead of original documents. Banks today are even trying to foreclose on homes that should not be in foreclosure due to their bad record-keeping. Banks have tried to: foreclose on the same property; foreclose on homes bought in cash; and break into homes believed to be in foreclosure.

A large portion of the foreclosures in the courts today is caused by the bank's failure to properly underwrite the loans that were written. Instead of rejecting loans the banks knew certain consumers could not repay, banks passed on the risk to the investors. Even if some homeowners are to blame for taking on a mortgage they could not afford, banks still should not have been sloppy in their paperwork. Government tax dollars are bailing out the bank for this foreclosure mess!

If you are facing a Florida Foreclosure Lawsuit, contact a Jacksonville Foreclosure Lawyer or a Florida Foreclosure Defense Lawyer today for your free foreclosure consultation.

Beginning on January 30, 2011, lenders will be required to provide more detailed, easier-to-read disclosures for interest rates, monthly payments, and details for adjustable-rate mortgages. These disclosures will appear in a spreadsheet format that is supposed to make the consumer understand what kind of loan they are signing on for. Lenders will need to provide estimates of amounts to be put in escrow for property taxes or property insurance due on the loans. These new federal guidelines will also apply to negative-amortization loans, interest-only loans, balloon payment loans, and other variable rate loans for mortgages. These types of loans are examples of subprime mortgages that are still available in the current market.

Thomas, Martin, president of America's Watchdog, a national consumer advocacy group stated, "the additional clarity included in the new documentation will illustrate when a borrower's payment will change, as well as the maximum amount of a future payment after a defined period." However, Mr. Martin is also concerned that borrowers might be "further confused" and "awash in spreadsheets." The new disclosures appear to help the consumer understand what kind of mortgage loan they are signing up for, however in the long run a general consumer will still not be able to interpret what the various numbers on this new spreadsheet means.

Hopefully this is another step in the right direction in protecting homeowners from unscrupulous practices of some mortgage lenders. If you are a Florida homeowner facing a Florida Foreclosure Lawsuit due to the practices of your lender, contact a Jacksonville Foreclosure Defense Lawyer or a Florida Foreclosure Defense Lawyer today.

A Miami Gardens woman is facing the loss of her home of 15 years through foreclosure due to a startling amount of mortgage fraud and it seems as though the foreclosing entity doesn't care. Despite a mountain of evidence of mortgage fraud including the mortgage broker who handled the homeowners refinance has been convicted of, and is serving a 11-year sentence for, grand theft and has an additional 16 counts of mortgage fraud pending; the closing agent operated an illegal title company believed to have stolen $1.5 million from South Florida homeowners from 2005-2007; Florida Default Law Group, one of the "foreclosure mills" being investigated by the Florida Attorney General, is the firm prosecuting the foreclosure action, law enforcement officers are scheduled to evict the family next week.

This whole ordeal started when the mortgage broker, an associate of BlueKap Financial Group, paid an unsolicited visit to the homeowner telling her that he could give her a hassle-free refinance, allowing her to take $50,000 of equity out of her home to help her during the period of time she was looking for a nursing job. The mortgage broker, using a fraud scheme he and his associates employed many times, used an inflated appraisal and a "straw buyer" to take $230,000 of false equity out of the house before giving the promised $50,000 to the unknowing homeowner. Now the homeowner is on the hook to Deutsche Bank for the full amount of the mortgage, $303,000, though the home is currently appraised at $98,310.

In July, the case was transferred to the new Miami-Dade "rocket docket" from the civil division, where it had spent the previous three years. In August the case was transferred to a Section 50 court, where cases open longer than two years are placed, and the new judge granted Deutsche Bank summary judgment effectively ending the case. The homeowner stated that during the 15-minute summary judgment hears that the judge did not allow her or her attorney to get in a word of defense.

If you are facing a Florida Foreclosure Lawsuit and you feel that you may have been a victim of mortgage fraud, contact a Jacksonville Foreclosure Defense Lawyer or a Florida Foreclosure Defense Lawyer today to have your case reviewed.

The Florida Office of State Courts Administration just released the statewide stats from the first three months of rocket docket operations and the numbers are startling. From the period of July 1 through September 30, Florida courts disposed of 65,830 foreclosure cases with almost 71% of those cases being decided in "rocket docket" hearings where cases are decided in a matter of minutes. Palm Beach County was the most prolific at getting rid of foreclosure cases, ridding the county of 9.846 foreclosure cases. In that same time period only 23 foreclosure cases went to trial, less than 1% of the disposed of cases.

The "rocket docket" courts were created to stimulate the Florida housing market by ridding the state of the mass of foreclosure cases and getting homes back onto the housing market quickly. While the numbers of cases being cleared is astonishing, there are 396,509 foreclosure cases still active in Florida courts. Most of the cases being cleared by "rocket docket" courts are those where the homeowner doesn't respond to the foreclosure suit or where they are not represented by an attorney. In most cases, to defeat the "rocket docket" hearing all a homeowner needs is one issue of legal fact!

If you are facing a Florida Foreclosure Lawsuit in one of the "rocket docket" courts, contact a Jacksonville Foreclosure Defense Lawyer or a Florida Foreclosure Defense Lawyer today to review your case and determine what defenses may be available to you.

Predatory lending includes a variety of abusive practices by individuals that originate loans. Predatory lending practices may include refinancing that causes the borrower to lose the benefit of special terms in the loan, excessive or hidden fees, mandatory arbitration clauses, inadequate disclosures, failure to verify borrower's financial information, to name a few. No single act of abuse will rise to the level of predatory lending.

In an effort to combat predatory lending, Congress has created the Consumer Financial Protection Bureau. One of the major goals of the bureau will be to stop predatory lending. This is going to be an extremely difficult task. Individuals that originate loans are very crafty in the ways that they are trying to deceive customers while still following the mandatory disclosure requirements. It is certainly good news that there is finally a bureau dedicated to eliminate predatory lending. But time will tell whether the bureau can actually reduce predatory lending or if the lenders will just continue with more of the same.

If you believe you have been a victim of Predatory lending in Florida you should contact Legal Aid or a Jacksonville Foreclosure Defense Lawyer.

Ms. Burroughs was in charge of a company, WLL & Co., LLC, which purchased distressed homes, improved them, and then would sell them for a profit. In order to continue the business Burroughs allegedly was concealing where the borrowers down payments were coming from in an attempt to get lenders to give loans to buyers that would not have been eligible for the loans. Allegedly Burroughs was giving the potential borrowers the down payment money by depositing cash into their accounts, giving them a fake bill of sale from another property, or fake cash gift receipts. Due to the fact that many of the borrowers were not capable of making their monthly payments, many of the homes went into foreclosure. Because of this scheme underwriters had over $385,000 in losses. She faces a maximum of 20 years in prison and a $250,000 fine. This is one of the first cases brought by Obama's Financial Fraud Enforcement Task Force also known as "Operation Stolen Dreams."