As a consequence of the fallout that marked the frenzy of the subprime mortgage era, banks and mortgage servicers are finding themselves accused of fraud in trying to foreclose on properties while using falsified documentation. In a number of cases in Florida and other states where the foreclosure process must proceed through the courts, they are being charged with presenting forged documents of assignment.
Millions of loans were processed very quickly during the heyday of interest-only and other questionable loan practices, and some mortgages were sold hundreds or even thousands of times with incomplete information or documentation so that it became impossible to determine when or to whom the mortgage was sold.
Consequently, mortgage servicers have been trying to recreate loan documents by supplying phony stamps used by financial companies to simulate proof of assignments and by randomly changing the identity of a mortgage holder when it could not verify its ownership.
When consumers in Florida, Maryland and other states began challenging the foreclosures in court, the forgeries were uncovered. Banks have been undoubtedly under pressure to provide evidence of ownership of these loans in which incomplete documents were filed.
Many lenders and banks used a service from Docx, the nation’s largest lien release processor and a subsidiary of Lender Processing Services, to provide document and assignment services for banks and mortgage lenders. With no evidence of ownership or assignment of many of these loans, Docx is accused of scrambling to fabricate documents of assignment to satisfy the requirements for foreclosure in court. The company is presently under criminal investigation by federal prosecutors.
In February 2010, the Florida Supreme Court ruled that a lender now has to verify that it had all the proper documents before a foreclosure can proceed. Failure to do so can subject the lender or bank to charges of perjury. In a number of cases, judges have invalidated the foreclosures and returned the properties to the borrowers. In other cases, judges are holding hearings to determine if the lenders have attempted to perpetrate a fraud on the court by presenting fabricated documents.
Under fire, a number of large lenders, such as JP Chase Morgan, Bank of America and GMAC, recently suspended foreclosure proceedings in certain states, pending review of their files to find potential errors. Proceedings were only halted in certain states because not every jurisdiction has a law requiring that foreclosure proceedings to go through court; foreclosures continue to be processed in the states without judicial foreclosure laws.
Because the use of fraudulent documents of assignment is on the rise, it is important to talk to an experienced bankruptcy attorney if you are served foreclosure papers. Even if your mortgage documents are not falsified, you may still have options to save your home.
Banks and other Financial Firms under Federal Investigation for using Fraudulent Court Documents to Foreclose on People’s Homes
A recent story in the Washington Post reports that a federal investigation is underway to determine whether banks and other financial firms broke U.S. law when using fraudulent court documents to foreclose on people’s homes. The criminal investigation is focused on whether companies misled federal housing agencies, and whether the firms committed wire or mail fraud in filing false paperwork.
The Obama administration is seeking to send the message that it will hold banks accountable for illegal foreclosures. The investigation will likely be a lengthy one and target banks, independent mortgage servicers, law firms and other companies involved in the foreclosure process.
Beyond the investigation, federal agencies could take regulatory steps to address misdeeds. The Federal Housing Administration (FHA) and Ginnie Mae, which packages and sells FHA-backed mortgages, could require banks to change their practices and impose financial penalties if firms choose to violate the rules.
Some major banks (i.e. – Bank of America) are preparing to submit new paperwork and resume the process of seizing homes in Florida and other states which require a judge’s approval.
To read more on this story, please visit:
http://www.washingtonpost.com/wpdyn/content/article/2010/10/19/AR2010101904845.html?hpid=topnews
If you have any questions on this topic feel free to contact foreclosure defense attorney, Timothy Kingcade at (305) 285-9100. You can also find useful consumer information on the Kingcade & Garcia, P.A. website at www.miamibankruptcy.com.
Bank of America Plans to Resume Foreclosures in 23 States, Including Florida
A recent article by the Associated Press reported that Bank of America plans to resume foreclosures on more than 100,000 homes in 23 states, which include Florida early next week, with a judge’s approval. This move by the nation’s largest bank will likely encourage other giant lenders, like JPMorgan Chase & Co., to resume the foreclosure process as well. Bank of America Corp. is still delaying foreclosures in the 27 other states, which do not require a judge’s approval.
This move comes just two weeks after Bank of America halted foreclosures in all 50 states as allegations surfaced that bank employees signed, but failed to read foreclosure documents, that may have contained errors. These bank employees earned the nickname “robo-signers.”
A deposition released by the Florida attorney general’s office revealed that the office manager at a Florida law firm under investigation for fabricating foreclosure documents signed 1,000 files a day without reviewing them. The manager also would allow paralegals to sign her name when she got tired, the deposition said. Bank of America plans to begin filing new paperwork for 102,000 foreclosures on Monday, October 25, 2010.
The 23 states in which Bank of America is restarting foreclosures use a lengthy court process. They require documents to verify information on the mortgage, including who owns it. These states include: Connecticut, Delaware, Florida, Hawaii, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Nebraska, New Jersey, New Mexico, New York, North Dakota, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota, Vermont and Wisconsin.
To read more on Bank of America’s plans to resume foreclosures in 23 states, please visit:
http://news.yahoo.com/s/ap/20101018/ap_on_bi_ge/us_bank_of_america_foreclosures
http://www.msnbc.msn.com/id/39727162/ns/business-real_estate/
http://www.nytimes.com/2010/10/19/business/19mortgage.html
If you have any questions on this topic please feel free to contact foreclosure defense attorney, Timothy Kingcade at (305) 285-9100. You can also find useful consumer information on the Kingcade & Garcia, P.A. website at www.miamibankruptcy.com.
Beware of Foreclosure Scams
With the recent controversy and media scrutiny surrounding several banks that have confessed to submitting thousands of falsely sworn documents to courts as part of their efforts to foreclose on people’s homes, it’s no surprise that scam artists are trying to capitalize on the situation, marketing their services to delinquent borrowers. Homeowners should know that even though these documents amount to committing fraud upon the court, this likely will not save their homes. The homeowner still owes money, and eventually the paperwork will get sorted out.
A scam that is already gaining popularity amongst delinquent borrowers is the “forensic mortgage loan audit scam.” In this scam, auditors and the attorneys who back them demand at least several hundred dollars up front, and then comb through the mortgage documents looking for any violations of state or federal fair lending law. If any are found, these individuals say, the homeowner can sue and – and here’s where the fraud kicks in – through the suit, cancel the foreclosure, speed the loan modification, reduce the loan principal or even cancel the loan.
The worst foreclosure scams are those in which the homeowner loses their house to the scammer, becoming a tenant in their own home. This is referred to as the “bailout,” “equity stripping,” or “rent to own.” Two other common types are “phantom help” and “bait and switch” scams. “Phantom help” promises help that never comes. “Bait and switch” involves telling people the documents they’re signing say one thing, when they really say another.
The best advice I can give is to carefully read what you are signing, particularly what’s noted in the fine print, and speak to an expert in the field if you are facing foreclosure. If you are a homeowner in trouble, particularly if you live in one of the high foreclosure states like Florida, you will be approached by these scammers. In South Florida within a few short days of a foreclosure filing, it is typical for a homeowner to receive 20 to 40 solicitation letters, of which 10-15 will be from scammers. Additionally, the homeowner will receive a dozen or more phone calls from scammers offering these fraudulent services, even visits to their front door! The Department of Housing and Urban Development has a prescreened list of agencies that can help, and unlike scammers, they will not ask for a cashier’s check or a wire transfer.
To read more on this story and learn more about the latest foreclosure scams, please visit:
http://www.dailyfinance.com/story/real-estate/new-foreclosure-scams/19661013/
Foreclosure defense attorney, Timothy Kingcade has helped many facing foreclosure alleviate their stress by letting them stay in their homes for at least another year, allowing them to re-organize their lives. If you have any questions on this topic please feel free to contact me at (305) 285-9100. You can also find useful consumer information on the Kingcade & Garcia, P.A. website at www.miamibankruptcy.com.
Thousands of Foreclosure Filings under Scrutiny Due to Faulty Paperwork from Banks and Lenders
Thousands of foreclosures are being scrutinized after employees at several major lenders approved thousands of foreclosure affidavits and other documents without proper evaluation. JP Morgan has suspended some 56,000 foreclosures after admitting some may have been authorized without proper review. Ally Financial, another major lender, suspended evictions in twenty-three states.
New York Supreme Court Justice, Arthur Schack sites “questionable practices” in a number of these foreclosure filings. To approve a foreclosure a lender must prove three elements: 1.) Proof of mortgage, 2.) owning the mortgage the day the case commences, and 3.) show there is a default by the borrower. The biggest problem Justice Schack states is proving ownership of the mortgage the day the case commences. Numerous problems have occurred as a result of sloppy paperwork with the assignments of these mortgages. This in turn, has caused problems for the bank, the borrower, and attributed to title problems with the new owner.
Andy Kroll, a reporter at Mother Jones, revealed that GMAC, a subsidiary of Ally Financial, relied heavily on what defense attorneys and critics call, “robo signers.” These employees sole job is to mass sign foreclosure affidavits. In GMAC’s case, depositions in Maine and Florida revealed that a robo-signer admitted under oath that he had no idea what he was signing, violating federal rules of civil procedure. It is required by law that an individual must have personal knowledge of what a foreclosure legal document says, which is now what is at the heart of the GMAC debacle.
The same law firm in Southeastern Florida deposed a similar employee within Chase Home Finance, opening the door for 56,000 of JP Morgan’s cases. This has caused many judges to go back and scrutinize banks that they feel utilized these questionable practices in pushing foreclosures through the system.
To read more about this story, please visit:
http://4closurefraud.org/2010/10/02/video-judge-arthur-schack-and-andy-kroll-on-foreclosure-fraud/
Foreclosure defense attorney, Timothy Kingcade has helped many facing foreclosure alleviate their stress by letting them stay in their homes for at least another year, allowing them to re-organize their lives. If you have any questions on the topic of foreclosure please feel free to contact me at (305) 285-9100. You can also find useful consumer information on the Kingcade & Garcia, P.A. website at www.miamibankruptcy.com.
Learn the Facts about Miami’s New Foreclosure System
With Miami having the largest number of foreclosure cases in the state, an estimated 72,000, it’s no surprise that a new system needed to be put in place to handle the influx of these cases. The circuit courts were given $862,053 by the Legislature to close 52,000 of these cases by June 30, 2011.
The new incentive has changed the way Miami-Dade will operate foreclosure cases. Circuit Judge Jennifer D. Bailey, the civil division overseer, is now hiring senior judges to strictly consider summary judgments and clear dockets. Once a case has gone through the review process and is ready for a summary hearing, it is added to the master calendar.
A year ago, the twenty-six circuit court judges were handling six times the normal amount of foreclosure cases received. Now any foreclosure filing after January 1, 2009 will remain with circuit judges and the five senior judges will review the 15,537 older filings.
This will take an immense amount of work and pressure off the circuit judges. The goal of closing 52,000 cases is a huge undertaking considering they only closed 24,000 this year. This new system has not come without controversy and criticism as many foreclosure attorneys fear it is about filling quotas.
To read more on the new system for foreclosure cases, please visit:
http://www.law.com/jsp/article.jsp?id=1202472282522
Foreclosure defense attorney, Timothy Kingcade has helped many facing foreclosure alleviate their stress by letting them stay in their homes for at least another year, allowing them to re-organize their lives. If you have any questions on the topic of foreclosure please feel free to contact me at (305) 285-9100. You can also find useful consumer information on the Kingcade & Garcia, P.A. website at www.miamibankruptcy.com.
Florida Legislature’s Proposed Answer to the Foreclosure Crisis
A recent article in the New York Times reported on the Florida Legislature’s new effort to cut the number of foreclosures throughout the State of Florida. Earlier this year, Florida provided $9.6 million in funding to set up “foreclosure-only” courts across the state. These courts would be staffed by retired judges to accommodate the record-setting number of foreclosures in Florida. The goal of the program, which began in July, is to reduce Florida foreclosures by 62 percent within a year.
However, this new program has come under much scrutiny. Lawyers representing troubled borrowers contend that many of the retired judges called in to oversee these foreclosure cases are so focused on cutting the caseload that they are unfairly favoring financial institutions at the expense of homeowners.
In the article, Chief Judge Victor Tobin in the 17th Judicial Circuit defends the new plan, saying that “There are more assets devoted to those three foreclosure divisions in Broward County than to any other division in the building in terms of case managers and that sort of thing to help the general public. The people who come in get fully, fully heard.”
Florida’s foreclosure mess is made even more complicated by what analysts and lawyers involved in the process say are “questionable practices” by some law firms that are representing banks. Such tactics, these people say, have drawn out the process significantly, making it extremely lucrative for the lawyers and more draining for troubled homeowners. Even a few South Florida law firms have come under such scrutiny regarding their questionable practices when handling the influx of foreclosure cases. Labeled as “foreclosure mills” in the article, often times these firms refuse to work with borrowers and are very aggressive about pushing cases through the courts, even when there are questions about the documentation.
Nevertheless, Florida law requires that before a financial institution can foreclose on a borrower, it must prove to the court that it actually has the standing to do so. Florida law also requires that banks argue their cases before a judge if they want to recover property from borrowers in default, and 471,000 such cases were pending in Florida at the end of July, according to the Florida State Courts administration.
The Florida Supreme Court has recognized the need to hire retired judges on a “temporary” basis and has ruled this as constitutional. However, with these “repeated and consecutive” foreclosures, these may not always qualify as “temporary” and could eventually be in violation of the Florida constitution.
To read more on this story, visit:
http://www.nytimes.com/2010/09/05/business/05house.html?pagewanted=1&_r=3
Foreclosure defense attorney, Timothy Kingcade has helped many facing foreclosure alleviate their stress by letting them stay in their homes for at least another year, allowing them to re-organize their lives. If you have any questions on the topic of foreclosure please feel free to contact me at (305) 285-9100. You can also find useful consumer information on the Kingcade & Garcia, P.A. website at www.miamibankruptcy.com.
Florida Foreclosure Filings are Down According to a National Study
The nation has seen a drop in foreclosures and Florida is feeling it, too! According to California-based RealtyTrac, an online site focused on distressed real estate, the number of Florida foreclosures has decreased by 8.7 percent in July. The counties of Tampa Bay have seen the largest annual drop at close to 24 percent.
In a national ranking, Florida is number three for foreclosure filings, close behind is Arizona at number two, and Nevada at number one. All three states have seen a significant drop in filing rates. California, placing number four, has seen a decrease of more than 54 percent.
To read more on some of the latest trends in foreclosure filings, visit:
http://www.bizjournals.com/tampabay/stories/2010/08/09/daily47.html?s=industry&t=printable
http://www.realtytrac.com
Foreclosure defense attorney, Timothy Kingcade has helped many facing foreclosure alleviate their stress by letting them stay in their homes for at least another year, allowing them to re-organize their lives. If you have any questions on the topic of foreclosure please feel free to contact me at (305) 285-9100. You can also find useful consumer information on the Kingcade & Garcia, P.A. website at www.miamibankruptcy.com.
-Timothy Kingcade
The Importance of Hiring an Experienced Attorney when Facing Foreclosure and President Obama’s Mortgage Rescue Plan Explained
Every state has different laws on foreclosure. In the State of Florida, you have only twenty (20) days to respond to a foreclosure notice. That is why it is imperative that you hire an experienced attorney that can help save your home or at least allow you to reside in it for another year if necessary.
Almost all mortgages in the State of Florida have the right of “reinstatement.” This means that, if at any time during the foreclosure litigation process the borrower comes up with the money for the late payments or can make a deal with the bank to cure late payments, legally the bank must dismiss the foreclosure action.
Today, many homeowners are unable to meet their monthly mortgage payments as low introductory rates (sub-prime) turn into the regular monthly interest rate (primary). As a result of the housing market crashing, many properties are no longer worth their original costs, leaving homeowners stuck with homes worth less than their actual mortgages. These have been labeled “underwater” homeowners. More than 15 million people are lumped into this category.
To turn things around, President Obama and financial delegates have come up with a foreclosure rescue plan to help the unemployed and “underwater” homeowners remain where they are and help stabilize the real estate market. The plan is to reduce the principal, rather than reduce interest payments or give other forms of aid. Mortgage payments will be cut to no more than 31% of monthly income for 3 to 6 months. Mortgages will also be reduced to reflect the current property values. Then the homes will be refinanced into the Federal Housing Administration (FHA).
The requirements to qualify for Obama’s Mortgage Rescue Plan include:
-Having secured your mortgage by January 1, 2009
-Having a primary mortgage of less than $729,500
-Must live on the property
-Must fully document income with tax returns and pay stubs
-Sign a financial hardship statement
-Go for credit counseling if total household debt totals more than 55 percent of income
Several issues have complicated the execution of this plan: namely, the cooperation between banks and investors. Because investors acquired most mortgages as security bundles during the housing boom, many are not willing to go lower. The banks and investors must agree and approve all loan restructurings for this plan to be successful.
To learn more about Obama’s Mortgage Rescue Plan, visit:
http://www.orlandosentinel.com/classified/realestate/foreclosure/orl-foreclosures-foreclosure-laws-story,0,5000373.story
http://www.neighborhoodlink.com/article/Homeowner/Obama_Loan_Mod_Plan_Explained
http://www.cnbc.com/id/2951098/New_Mortgage_Plan_Who_Qualifies_and_How_It_Works
http://www.washingtontimes.com/news/2010/mar/27/obama-foreclosure-plan-givesloan-break-jobless/
http://money.cnn.com/2010/03/25/news/economy/foreclosure_prevention_unemployed_underwater/index.htm
Many people feel extremely overwhelmed when they get sued for foreclosure–they move out of the house or sign the house over, not knowing that by hiring an attorney and fighting this action it is very possible to save the house, even without filing bankruptcy. If you have any questions on the topic of foreclosure please feel free to contact me at (305) 285-9100. You can also find useful consumer information on the Kingcade & Garcia, P.A. website at www.miamibankruptcy.com.
-Timothy Kingcade
New Credit Card Laws Targeted to Protect the Consumer
After filing for bankruptcy, it’s important to remember that the day your case is closed is the day you can begin rebuilding your credit score, by adopting responsible spending habits, paying your bills on time and not applying for too much credit at once. You may think that living on a cash-only basis is a smart choice, but if you want to begin rebuilding your credit score fast, you have to take the plunge and allow yourself to open up new credit cards. A few recent laws have been enacted to protect the consumer and give you a better chance of attaining a good credit score.
On May 22, 2009 President Obama signed the Credit Card Accountability, Responsibility, and Disclosure Act to combat the unjust practices of credit card companies. This new law establishes principles necessary for consumers to get ahead, which include: bans on unfair rate increases and fee traps, plain, understandable language, accountability, and protection for students.
Additional Protections to the Consumer include:
- Consumers will no longer endure unfair and hidden spikes in interest rates.
- Consumers will have an adequate time period, at least 21 days, to pay a monthly bill.
- Deadlines, such as weekends and random monthly dates, are abolished.
- Institutions must receive the consumer’s permission when charging an account at its limit.
- Credit card companies must disclose account information in plain sight and plain language, i.e. how long it would take to pay off a balance and the total interest cost, if the minimum payment was made monthly.
- Credit card contracts are now made available online…keeping companies accountable for their terms and conditions.
- Consumer protection regulators must publish up-to-date findings and report misconduct.
As of August 22, 2010, the Federal Government is adding new rules to the Credit Card Act to create even more protection for consumers.
- Consumers can only be charge $25 in late fees, unless you have been late on payment in the past 6 months or the cost a credit card company acquires due to your tardiness justifies a higher fee.
- Late fees cannot be more than your minimum credit card payment
- No more inactivity fees, i.e. if you aren’t using your card, they cannot charge you
- No more double fees for single transactions.
- Explanation if they increase the APR.
However, even with the new laws, credit card companies continue imposing fees on consumers; labeling these “fees” by other names, now that more stringent laws are going into effect. The so-called “annual fee” is back. Companies will wave an annual fee if you purchase enough throughout the year; if not, the fee is tacked on, ultimately charging you for inactivity. Another fee to pop up is the foreign transaction fee. Anyone who has traveled abroad knows that card companies take a percentage for converting moneys. Now, regardless of what currency a transaction takes place in, if done overseas, they will charge you 2 to 3 percent. Cash advance fees are becoming larger. Additionally, companies are charging for paper statements. You can avoid this by paying your bills online.
To learn more about how to protect yourself from incurring hidden credit card fees, visit:
http://www.walletpop.com/blog/2010/07/21/the-latest-in-sneaky-credit-card-fees/
http://www.whitehouse.gov/the_press_office/Fact-Sheet-Reforms-to-Protect-American-Credit-Card-Holders/
http://www.federalreserve.gov/consumerinfo/wyntk_creditcardrules2.htm
If you have any questions on this topic, please feel free to contact me at (305) 285-9100. You can also find useful consumer information on the Kingcade & Garcia, P.A. Web site at www.miamibankruptcy.com.
-Timothy Kingcade