The Law Planet Blog

HBO has been airing a made for HBO movie entitled “Too Big to Fail”. The film has an A list cast and was written by Andrew Sorkin. The story line revolves around the failure of Lehman Brothers and the bailout of AIG.

The film details the history and ultimate failure of “default swaps” and the carving up and repackaging of mortgage bundles. The government stepped in. The Treasury Department and the Chief of the Fed orchestrated a deal with the major banks to accept TARP funding to perpetuate increased consumer credit. However, the government had no way to ensure the banks would use the funds in the way they were intended.

Sadly, the banks did not use the funds as envisioned and instead ramped up their legal coffers to begin a huge onslaught of foreclosures. Now, several years later, we are all feeling the impact of this ill fated idea. The courts are clogged, unethical law firms are employing robo-signers to perpetuate bad documents and fraudulent Florida Foreclosure filings.

Continue reading "HBO Series - Too Big To Fail - TARP'S Role in the Foreclosure Crisis" »

In a very closely watched match, several U.S. Banks are seeking to broker a deal with state attorneys general, in an effort to avoid billions in court claims over faulty foreclosure seizures.

The banks in talks include, Bank of America Corp. (BAC), Wells Fargo & Co. (WFC), JPMorgan Chase & Co. (JPM), Citigroup Inc. (C) and Ally Financial Inc.

The proposed deal on the table includes options such as paying penalties, pledging relief to home buyers, which can include reducing loan principal, cutting fees or paying moving costs.

Settling the documentation lapse during home seizures is at the forefront for state and federal officials. The attorneys general told the banks earlier this week that they face an estimated $17 billion in civil case court claims. The banks had initially offered to settle the improper foreclosure claims for $5 billion.

Continue reading "Banks seriously discussing Options in pending Foreclosure Deal " »

How the mighty have fallen. One of the few remaining Foreclosure Mill law firms, Ben-Ezra & Katz, announced the layoff of nearly 150 foreclosure staff members. This was their second major staff cut this year, in February they cut over 200 employees after losing their gravy train Fannie Mae business.

In it's heydays, the foreclosure mill law firm, had nearly 600 staff members processing about 18,000 foreclosures. Please understand that we are not celebrating in their loss, but it seems to be poetic justice for the homeowners that lost their home to foreclosure due to this firm and others such as the David Stern firm. Allegedly, they are accused of fraudulently handling foreclosure files and falsifying documents. If this turns out to be true, how could they possibly think that their misdeeds would not be uncovered?

Cutting staff seems to be the least of their worries. The firm is being investigated by the Florida Attorney General and is embattled in litigation with several banks for the mishandling of several foreclosure cases. They are not getting a free ride in court and are being held accountable for their actions in foreclosure cases.

Continue reading "Foreclosure Mill Law Firm Ben Ezra & Katz closes foreclosure business" »

The five biggest US mortgage servicers are considering a cash for keys program that would pay delinquent borrowers money to leave their home. Is this a new play to lure people from their owns and steal the property with a carrot? Last week, the number tossed around was $21,000 to delinquent homeowners. Regulators and Banks are trying to agree on a solution.

The FDIC chaired the meeting last week and stated that the cash for keys program would involve the biggest servicers, such as Bank of America. This incentive would try to lure homeowners away from their home with small amounts of cash, instead of stealing it with fake documents signed by robo-signers.

Our Florida Foreclosure Defense Lawyers, have seen a lot of creative tactics presented by the banks to clear up the Florida foreclosure crisis. This new plan is one of the all time most creative that plays into the banks favor most of time.

Continue reading "Foreclosures: Cash For Keys Program and the Banks" »

Florida courts received a sigh of relief today when Governor Rick Scott approved millions of dollars in emergency funding to help clear some of the hundreds of thousand of Florida foreclosure cases.

The Florida Supreme Court warned the governor that the $14 million was desperately needed to clear the massive foreclosure case backlog throughout Palm Beach County, Broward County, Dade County and other counties throughout Florida.

Florida Foreclosure Defense Attorney, Audra Simovitch, is in court almost daily representing clients in fighting the banks against fraudulent foreclosures and helping clients in bankruptcy matters. This new financial boost for Florida courts should help in this foreclosure crisis.

If you are in Florida facing foreclosure or bankruptcy, understand that there is help out there for you in getting you that fresh start.

Click on the following links to read more on the Florida courts receiving millions in badly needed funding:

Governor approves millions to speed up foreclosure cases - - WPTV.com

Scott approves partial bailout for Florida courts - WTSP.com (Associated Press)

The majority of consumers have at least heard that the Obama administration is taking steps to make significant changes with the structure of both Fannie Mae and Freddie Mac, but few individuals truly understand how the new proposals will impact borrowers. Although a number of different strategies have been initiated, there are several that bear mentioning due to the fact that they specifically will cost prospective buyers more money or even the chance to own a home.

Minimum Down Payment Requirements
Many homeowners appreciate the ability to purchase a home without making a substantial down payment, and it is no secret that many prospective buyers do not have adequate savings to afford a 10-20% lump sum. However, the proposals are suggesting that a 10% down payment would be the minimum amount allowable in order to qualify for any federal support on the mortgage. While it may be possible for a consumer to easily afford their monthly payment, few can provide such a significant amount of money upfront.

Reduction in Federally Supported Mortgages
If the amount of Fannie Mae, Freddie Mac, and FHA loans are reduced as per the proposals, borrowers are going to have to depend more upon their local banks and credit unions. The unfortunate truth is that this means the lenders are going to have a much higher level of risk. Smaller institutions are going to be much less likely to offer fixed term mortgages for a lengthy period of time, and only highly qualified buyers will be approved for a loan. Higher risk also means that the lender must experience more of a reward for lending the money, so expect interest charges and other costs associated with home loans to increase substantially. The federally supported mortgages will also be unable to provide assistance with larger loan amounts, so many homeowners will be forced to deal with jumbo loan requirements that are likely to include large fees and down payments.

Continue reading "Fannie Mae and Freddie Mac Mortgage Proposals Could Cost Borrowers" »

The Federal Trade Commission is cracking down on scam artists that blatantly prey upon distressed homeowners facing foreclosure or in need of a loan modification. Recently, the FTC charged a national group of companies based in Palm Beach County, with marketing illegal loan modification services. The FTC seeks restitution for loan modification victims and wants the firms to end to their illegal practices.

According to published reports,U.S. Mortgage Funding Inc., Debt Remedy Partners Inc., LowerMyDebts.com LLC, David Mahler, Jamen Lachs and John Incandela Jr., also known as Jonathan Incandela Jr., allegedly violated the FTC Act and the FTC's Telemarketing Sales Rule and falsely claimed they had a 100% success rate in obtaining loan modifications that would drastically reduce mortgage payments for distressed homeowners.

It is important for distressed homeowners seeking assistance in mortgage modifications or debt relief to be wary of fraudulent scam artists that represent themselves as legitimate firms. Since Jan. 1, 2010, individuals or businesses offering services to negotiate a loan or mortgage modification must be licensed through the Florida Office of Financial Regulation. Also, new disclosures are required such as large-type print on contracts and a three-day rescission period.

In the recent complaint against the Florida based loan modification companies, they allegedly claimed to have loan approvals and affiliations with mortgage lenders> They also claimed that a homeowner would receive a full refund, if they failed to receive a loan modification.

Our Florida Consumer Debt Relief Attorneys, work with distressed homeowners every day, seeking legal help for mortgage loan modifications, foreclosure defense or bankruptcy. Many have spoken to or even hired fraudulent companies that prey upon distressed homeowners seeking immediate help. Before choosing a mortgage modification or debt relief firm, check the company's track record and history to make sure there are no complaints or charges pending against them.

The FTC and many state Attorney General's are prosecuting fraud on loan modification scam artists. If you feel that you have been exposed to mortgage or loan modification fraud, contact the Florida Attorney General's Office, at (866) 9-NO-SCAM (866-966-7226) or www.myfloridalegal.com

Click on the following link to read more on FTC sues Florida loan firm - Tampa Tribune/ Hernando Today

After serving our country, soldiers and veterans come home to find that lending institutions are fraudulently foreclosing on their homes. Recently, it has come to light that a Morgan Stanley subsidiary, Saxon Mortgage Services Unit, may have fraudulently foreclosed upon nearly two dozen military families from 2006 - 2008. The Department of Justice Department is investigating the allegations.

Several mortgage and lending companies are being investigated by the Department of Justice. including, Saxon Mortgage Services, a Morgan Stanley unit. The Service members Civil Relief Act is a federal law that governs actions creditors can take against service members on active duty. It expressly prohibits lender from foreclosing on active-duty service members without a court hearing.

At the forefront of these new revelations is the case of the fraudulent foreclosure sale of the home belonging to Sgt. James B. Hurley , a Michigan National Guard member. St. James Hurley came home from serving in the Iraq war and found that his home had been foreclosed upon.

Continue reading "Military Service Member foreclosures under attack by DOJ" »

Every year, lending giant JPMorgan Chase & Co. files an annual securities report. This year's report, which was filed on February 28, included some very eye-opening information. The bank disclosed that it is currently the defendant in more than 10,000 legal proceedings around the United States. The proceedings stem from the huge array of investigations that have been taking place concerning foreclosure practices. Around the fall of 2010, glaring paperwork errors on foreclosures were brought to public attention. In many cases, those errors cost people their homes. Not surprisingly, the discovery prompted a vast range of investigations into foreclosure industry practices.

If JP Morgan ends up paying out on all of the proceedings, the New York-based bank could end up paying fines of up to $4.5 billion. The legal proceedings have been initiated by a number of different entities. The attorney generals of all fifty states have banded together to investigate botched foreclosures. The United States Department of Justice has gotten into the act, too; many bank regulators have been filing suit, as well. Considering the huge number of involved parties, it isn't especially surprising that the nation's second-largest bank is knee-deep in litigation concerning these foreclosures.

JP Morgan is not alone in its battle, though. CitiGroup, Bank of America, Wells Fargo and many other banks and lenders are facing legal proceedings, too. For homeowners who are facing foreclosure, this news highlights the importance of seeking a qualified foreclosure defense attorney. All too often, homeowners feel helpless in the face of such troubles. When a bank begins foreclosure proceedings, many people just let things proceed. The assumption tends to be that the bank knows what it is doing. As the huge number of botched foreclosures and the issue of far-reaching foreclosure fraud comes to light, it is clear that homeowners need to protect themselves.

Continue reading "J.P. Morgan Facing Up to $4.5 Billion in Fines over Botched Foreclosures" »

Since our firm helps people who are facing foreclosures we have a unique perspective on the "foreclosure crisis." We see cases from start to finish. Sometimes folks come to us too late in the process. They want us to try and "unwind" the case. These poor people simply want to know their options, such as modification and/or mediation.

After doing hundreds of investigations, we have discovered the insidious side of home loans and banking. We have uncovered massive foul play when it comes to the foreclosure process.
Many times the original loans are sold and assigned to lending servicing agents. These loans are sold multiple times.

The buying and selling of the loan is not illegal or unethical if the law if followed. Remember, we are talking about the right to take away most people's greatest asset, their shelter, their family safety and their life security.

The law must be followed when a bank forecloses on a family's home. The law requires that any sale of the mortgage and note must be properly "assigned" to the new owner. That "assignment" must then be recorded. If those steps are not followed the homeowner will never know who actually owns the property. This is NOT happening!

Now we have lawsuits being filed by companies who are swearing under oath that they own the mortgage and note. Unfortunately they have no legal proof and many times it is not true. These note holders are suing the homeowner in foreclosure even though they do not have the legal right to foreclose! Sounds crazy. It is. But it is also true.

Many of these note holders are banks. These banks are moving forward with bad documents and trying to avoid the judge throwing their case out by filing assignments far too late in the case. Sometimes the banks wait over a year to file an assignment. Keep in mind, the Judges are being crushed in foreclosure cases. They want them to be over more than anyone. So, some Judges are actually allowing the bank to file "catch up" documents at any time just to end the foreclosure.

Yesterday I was in court trying to set aside two foreclosure judgments which the bank actually got even though they did not own the note or the mortgage when they filed their lawsuits. In other words, they sued and foreclosed on a family home and they did not own any paperwork which supported the allegation that the bank had any right to foreclose!

The documentation we presented was clear on this and the fact that the bank got the judgment using fraud. It did NOT matter. The judge denied the motions! Of course we are appealing, but so few people have the money to hire lawyers to fight banks who are taking their homes to begin with, it is the norm for the homeowner to just give up.

The system is terribly weighed down by the foreclosure crisis. The banks are not following the law, which makes matters worse. I assume the trial judges rightfully believe people facing foreclosure will simply go away if they are denied access to justice. These rulings further delay justice and justice delayed is justice denied. This is true most of the time, but not for my clients. We are going to fight down to the bitter end and obtain the justice our clients deserve!

A Palm Beach Couple is breathing a sigh of relief due to a foreclosure reprieve. This was largely due to the courtroom success of foreclosure defense attorney Audra Simovitch, in convincing a judge that the couple was entitled to this because of improper service. The judge in the case agreed preliminarily that they were never properly served with a foreclosure summons.

Audra Simovitch, Esq. stated the following to the Palm Beach Post:
“The banks are cutting every corner possible, There was not proper due process.”

The bank's representative carelessly attached a flier attached to the couple's door without any information such as name, address, or person served. This is not the way that a home is foreclosed upon and the bank should know better.

The March 14th sale date of the couple's home will be delayed until a further trial where the bank must prove that they followed the law and the foreclosure process rules.

Everyday, our Palm Beach Gardens Foreclosure Defense team fights against injustice and for the rights of the foreclosure victims. The banks such as Bank of America, J.P. Morgan Chase, GMAC and several others try and get away with robbery by illegally handling foreclosure claims and sales. The banks are facing billions in litigation fees and fines for their fraudulent practices.

If a person is facing the threat of foreclosure, they should seek the assistance of an experienced foreclosure defense team. There are several options out there for homeowners. Seek help before it is too late. Don't allow the banks to steal your home, stand up and fight.

Click on the following link to read more on the foreclosure reprieve:
Couple wins foreclosure reprieve - Palm Beach Post

Issues regarding the mishandling of mortgages and foreclosures around the United States have been in the news a lot lately. Recently, an even more disturbing trend has been appearing on the radar: home break-ins and ransackings by banks. Thanks to a common clause that is found in many mortgages, banks technically have the right to enter and secure a house that has been abandoned. Unfortunately, it appears that many banks aren't being too careful in determining whether or not a house has actually been abandoned. As a result, people around the country are returning to homes that have been looted for no good reason.

A New Breed of Lawsuit

Understandably, homeowners who have discovered that their homes have been wrongfully entered and/or ransacked by their banks have been filing lawsuits. In some cases, the homeowners have been at some stage of the foreclosure process; however, their homes have not been abandoned in any true sense of the word. In other cases, homeowners who are totally current with their mortgages - and even some who own their homes free and clear - have been grappling with these issues. Many experts believe the spate of bank break-ins is yet another sign that the foreclosure process is woefully out of control.

Locked Out of the House

When a California homeowner went to check on her vacation home in the mountains, she was shocked to find that the locks had been changed. When she was finally able to get into the house, she found that it had been cleaned out. All of her belongings were gone. Although the woman was in the midst of foreclosure proceedings, she filed a suit because the house was not actually abandoned. Bank of America, had jumped the gun; in turn, they had created a mountain of headaches for the woman.

Bank Break-Ins on Random Homes

A Texas man went through an even more troubling issue with Bank of America. The bank changed the locks to his second home; they also shut off its electricity. The irony was that the homeowner, owned the home free and clear. Bank of America no longer held the mortgage. As a result the electricity being turned off, 75 pounds of fish spoiled and caused significant damage. The homeowner is suing Bank of America and joins hundreds of other homeowners who are fighting back against banks unscrupulous tactics.

If you do not know about the foreclosure crisis in South Florida, you must have been living under a rock, or living in the wilderness without any communication to the outside world. Several National Banks and Florida Law Firms have been in the news for committing fraud upon the courts and homeowners by filing false affidavits to establish assignments of the loans.

In the mortgage world, assignments are not uncommon. Mortgages are bought and sold on a daily basis. However, for a final holder of the mortgage, note and security agreement to prevail in a foreclosure action, it must produce accurate and truthful evidence of the assignment of those documents to the current holder. That has now been the rub in a voluminous amount of cases currently in the court houses across the state and the nation.

Many lenders and unscrupulous law firms have employed “Robo-signers” to defraud homeowners. These people spend hours on end every day executing these assignment affidavits without having actual knowledge of the contents of the documents they are signing and therefore are committing perjury. This led several lenders to halt the foreclosure process and courts to halt the sale of distressed properties. Unfortunately, the moratorium has been lifted in many states and the banks have resumed foreclosures.

This crisis has opened the door for aggrieved borrowers to attack these fraudulent foreclosures and force the banks into a modification of their loans. Our Palm Beach Gardens law firm along with several other firms across the state has been aggressively defending mortgage foreclosures. Our firm has helped hundreds of families keep their home. Our professional staff has many years of experience in the lending industry. They assist homeowners in mortgage modifications even through the foreclosure process. Our staff of attorneys are well versed in defending foreclosure actions and work closely with our mortgage modification personnel to achieve the best possible result for our clients.

If you are currently under water on your home loan or facing foreclosure, do not give up. You have rights. At LaBovick Law Group we are experienced, aggressive and will use our legal expertise and resources to help protect your most precious asset – your home.

Don’t let the banks take advantage of you during these rough economic times. Stand Up and Fight.

Florida Foreclosure Defense Attorney Scott Haft was interviewed in the Palm Beach Post regarding South Florida man gets his property back after judge reverses Chase foreclosure.

Mr. Haft discussed how his South Florida client had his foreclosure reversed today ay based on a motion arguing the bank was wrong to take the property back at auction while at the same time negotiating a loan modification on the home. Attorney Haft filed a motion to vacate the foreclosure judgment based on fraud, misrepresentation and misconduct by JP Morgan Chase, which had promised a trial loan modification

The Palm Beach Post article discusses how Miami-Dade Judge Marc Schumacher granted the motion. It was agreed to by Chase's attorneys, which is also unusual. A summary judgment is a quickie foreclosure hearing, usually granted when the facts of the case are irrefutable.

Click on the following link to read the article South Florida man gets his property back after judge reverses Chase foreclosure

Today I was in Miami-Dade County for a hearing on a homeowner’s Motion to Vacate Summary Judgment based on Fraud, Misconduct and Misrepresentation during the course of the foreclosure case. In English, this means that my client lost his home when the Chase Bank misrepresented the facts and took his home without due process.

Since February 2010, JP Morgan Chase promised to provide a mortgage modification to my client. They promised to stop the foreclosure proceedings and allow him to stay in the home. My client acted in good faith the entire time, trying to save his home from Foreclosure using the trial modification system as we set up in every modification case. Then, without ever telling my client they were moving forward, Chase went ahead and behind his back got a Summary Judgment. This gave Chase the right to sell my client’s home at Judicial Auction.

When my client was sent a copy of the Summary Judgment, he called the Bank to ask why they were not giving him the promised trial mortgage modification. The Bank assured my client they were giving him a modification and would suspend the sale so that the Trial Modification could go through. That is not what happened. What Chase actually did was sell the house at a judicial sale behind my client’s back. When my client informed us of the way Chase had treated him we felt this was an atrocity. We immediately filed a Motion to Vacate the Summary Judgment based on Fraud, Misconduct and Misrepresentation. Today we had the hearing on my motion. The Judge Ordered the Summary Judgment be vacated (overturned). My client gets to keep his house!

I can’t imagine how many times this has occurred. I believe only one person in twelve gets an attorney. The rest are at the mercy of unscrupulous banks and their attorneys. Homeowners should hire an attorney to represent them in a mortgage modification or foreclosure defense matter. Why do the banks get a Federal bailout and get to use taxpayer’s dollars to foreclose on citizen tax payer’s homes. Homeowners need to Fight Back!

ANYONE WHO HAS HAD THEIR HOME SOLD AT A JUDICIAL AUCTION WITHIN THE LAST YEAR SHOULD TALK TO AN ATTORNEY IMMEDIATELY! DON’T LET THE BANK HAVE YOUR FAMILY HOME!

In two letters recently released by, Attorney General Richard Cordray criticized a number of banks and loan-servicing companies, including Wells Fargo & Co.; Ally Financial Inc.'s GMAC Mortgage; Bank of America Corp.; and J.P. Morgan Chase & Co. Mr. Cordray accused the banks of trying to paper over fraud committed in foreclosures with temporary fixes that don't address underlying problems in the banks' practices.

In light of the fiasco an option for banks would be to allow borrowers to modify loans and make settlements. This would be a win-win for everyone instead of forging ahead with paperwork that could be bogus or flawed. This is a huge issue for the courts in light of a 50-state probe, which includes top law-enforcement officers from all 50 states in response to allegations of robo-signing and massive errors.

It is a but suspect for Bank of America to remain silent on the subject, given that that in 2008 they agreed to an $8.4 billion loan modification program after its Countrywide Financial unit was probed for predatory lending practices. Thus took place only two years ago.

Wells Fargo on the other hand is resubmitting submitting affidavits for 55,000 pending foreclosures,since some of the paperwork might be flawed. One Wells Fargo employee admitted to signing hundreds of foreclosure documents a day without checking for accuracy. When questioned in a Florida deposition, she exclaimed that it was not part of her job description to check for accuracy. This should make homeowners and the bank feel really confident about the validity of the documents signed.

Click on the following link to read more from the WSJ on Big Banks Told Not to 'Fix' a Fraud .

According to the Government Accountability Office, nearly 400,000 households have avoided foreclosure with government programs, as of July 2010. Approximately $248 million of the $50 billion in TARP funds was used to help millions of homeowners with mortgage payment reductions.

In the month of June, the number of permanent modifications increased nearly 15%, bring the monthly total to over 50,000. The Making Home Affordable Program (HAMP) is assisting homeowners and providing hope. The trial modification programs are also beginning to work in the homeowner’s favor. Lenders offered nearly 45% of canceled trial modification participants an alternative modification. Less than 2% of the homeowners in trial modifications went to foreclosure sale.

When seeking loan modification assistance, homeowners need documentation such as pay stubs – last 30 days, Bank Statements – 6 months, Hardship Letter, 2 years of Tax Returns, and proof of residency. Lenders often make it difficult for homeowners in this process, therefore, the use of a loss mitigation professional can be helpful in finding an appropriate workout solution, such loan modification, deed in lieu, or extension of time. Homeowners should seek the assistance of qualified professionals to protect against being a victim of fraud.

The recent numbers from Realty Trac, a research firm based in Irvine, California, show that 75 percent of the top metro areas around the country increased foreclosure activity in the first half of 2010. Florida, California, Nevada, and Arizona accounted for all of the top 20 metro foreclosure areas with a population of 200,000 or more. The state of Florida ranked number one in the country with having the most top 20 metro areas on the list. South Florida accounted for nearly 6 percent of the foreclosures filed nationally with 94,466 foreclosures filed in the first half of the year. South Florida eclipsed larger markets such as Los Angeles, Chicago and New York, and outpaced foreclosure hotbeds Phoenix, Las Vegas and Detroit.

The Obama Administration approved state plans for use of $1.5 Billion in “Hardest Hit Fund” foreclosure prevention funding. Florida, California, Arizona, Nevada and Michigan were the first states to receive the first round funding under programs to support local initiatives to assist struggling homeowners in a mortgage crisis. The state of Florida will receive $418 million in funds to offer mortgage payment assistance to the unemployed and under-employed. The state will also offer principal reduction or second lien extinguishment, if necessary to achieve a mortgage modification for the homeowner.

Late last year, the Florida Supreme Court ordered courts to implement residential mortgage foreclosure mediation programs to help deal with the state’s foreclosure crisis and help homeowners stay in their homes while also keeping caseloads at bay. As of July 12, 2010, Palm Beach County homeowners facing new foreclosure actions on their homestead residences are referred to mediation. The Palm beach County Residential Foreclosure Mediation Program is a free optional program for borrowers; however, lenders are responsible for costs of mediation. A mediation is a great tool for borrowers to negotiate with the lender face to face. A Foreclosure Defense Attorney representing the homeowner is a wise investment, since lenders do not always play fair at the negotiations table.

As the United States slowly recovers from the mortgage crisis and ensuing economic downturn, the fact remains that thousands of homeowners all across America are still facing the threat of foreclosure. Given the current state of the economy, the possibility of missing just one mortgage payment can sometimes be the tipping point that pushes a homeowner closer to the brink of foreclosure. Despite a seemingly dismal outlook, mortgage modification and foreclosure defense are just two of the tools available to help struggling homeowners protect themselves against foreclosure.

A foreclosure occurs when a lender sues a borrower for not making payments toward the property. The lender’s goal in filing this lawsuit is to recover, through the sale of the property, the money it lent to the borrower. Once a lender files a foreclosure lawsuit, an official will deliver a summons to the homeowner’s residence notifying them of the suit. However, a foreclosure not only has the potential to wreak havoc on a homeowner, it can also lead to community degradation and other negative societal impacts.

According to the Joint Center for Housing Studies, each foreclosed home can reduce nearby property values by 1 percent or more. Additionally, foreclosures can also lead to:

•    The foreclosed home and property falling into disrepair
•    A decrease in buyer perception of the area
•    Unpaid HOA fees, normally leading to an increase in the existing members’ payments
•    A refusal by prospective homeowners to live in a neighborhood that includes foreclosed and neglected properties

While these examples are ominous, it is important to note that a successful mortgage modification can help prevent such negative impacts in addition to possibly allowing a homeowner to keep his or her home. Click on the links below for more information.

Lenders’ Cost of Foreclosure Policy Paper – Mortgage Bankers Association

Foreclosure Sales Affect Home Values - Nearby Homes Feel Effect – About.com

Link to Joint Center for Housing Studies – Harvard University

A recent report released by real estate research firm Zillow states that 44.3 percent of South Florida homes were underwater during the first part of 2010. Zillow’s first quarter analysis report also determined that home values in Palm Beach, Broward and Miami-Dade counties continued to decrease from 2009.

In a recent article on the Real Time Blog, Palm Beach Post Real Estate writer, Kim Miller, reports that it could take up to five years for home values to begin climbing,according to Zillow. In addition, the real estate research firm expects national home values to hit bottom not in the second quarter of 2010, but the third, presumably extending the housing crisis nearly all the way through 2010. Zillow is also predicting that negative equity and foreclosures will compound to keep home value appreciation in the U.S. near zero possibly until 2015.

According to foreclosure data, services and online marketplace RealtyTrac, Florida homeowners continue to face some of the highest foreclosure rates in the country. The following is a current breakdown of the foreclosure situation in South Florida:

Palm Beach County: 18,755 Foreclosures
8,401 Homes for Sale

Broward County: 42,467 Foreclosures
3,960 Homes for Sale

Miami-Dade County: 40,184 Foreclosures
8,094 Homes for Sale

Homes still sinking, 44.3 percent in South Florida underwater – Palm Beach Post

Link to RealtyTrac’s map of Florida Foreclosures & Home Sales

Link to Zillow’s Web site

In response to the housing crisis gripping the nation, the Obama administration implemented the Home Affordable Modification Program (HAMP) to stem the growing number of foreclosures in the United States. HAMP is a part of the government’s comprehensive Making Home Affordable initiative to help homeowners who are struggling to make their mortgage payments, or homeowners who are facing foreclosure.

In a recent article on the topic, Reuters indicated that over 230,000 of the approximately 1.4 million HAMP mortgage modifications had been made permanent by the end of March. According to U.S. Treasury spokesperson Meg Reilly, "More than 1.1 million borrowers were receiving a median savings of $500 each month.” The Obama administration hopes to help between 3 to 4 million homeowners receive permanent modifications through HAMP by 2012.

The primary objective of HAMP is to help borrowers avoid foreclosure by modifying troubled loans in order to achieve a more affordable payment. Under the terms of HAMP, however, homeowners must meet certain conditions in order to be eligible for a modification.

To be eligible for a HAMP modification, the following conditions must apply:

•    Your are the owner-occupant of a one- to four-unit home;
•    You have an unpaid principle balance equal to or less than:
      •   1 Unit: $729,750             •   3 Units: $1,129,250
      •   2 Units: $934,200           •   4 Units: $1,403,400;
•    You are having difficulty making your mortgage payments;
•    You got your current mortgage before January 1, 2009; and
•    You have a mortgage payment (including taxes, insurance, fees, etc.) that is more than 31% of your current gross (pre-tax) monthly income.

It is important to note, however, that a homeowner does NOT need to be behind on his or her mortgage payments to participate in the Home Affordable Modification Program. If you are a responsible borrower who is struggling to remain current on your payments, or if you are at risk of default due to a financial hardship or recent payment hike, you may be eligible for a HAMP modification. Please use the resources below to learn more about HAMP and the mortgage modification process.

Home Affordable Modification Program – U.S. Government

US mortgage modification program helps 230,000 permanently – Reuters

Home Affordable Modification Program Guidelines – U.S. Department of the Treasury