January 20, 2014

One Thing Has Not Changed From Last Year

The News Press reports from Florida. “Q: I own condominium units in both Florida and another state. I have seen in both states where banks seem to be sitting back and not pursuing foreclosures, leaving the properties and associations in limbo. Can you please advise me if there are any federal or state statutes that come into play? A: I am not aware of any federal statutes that would be relevant. As to state laws, I can only speak to Florida law. In Florida, the party that files the lawsuit (here, the bank), generally controls the timeline of the case. This has proven problematic for associations because many banks have been unwilling or unable to push foreclosure cases through the system with any degree of efficiency.”

“Associations are named as defendants in mortgage foreclosure cases because of their power to levy assessments on the titleholder. As defendants, associations have limited tools to move mortgage foreclosure cases towards a conclusion, the chief ones being the case management conference, the pretrial conference and the order to show case. The association attorney’s goal is to drag the bank’s attorney into court and get him or her, and the judge, to pay attention to this case as opposed to the thousands of others on the court’s docket.”

The Ledger. “A new report from RealtyTrac says Orlando and Tampa have some of the highest rates of ‘deeply underwater’ homes with mortgages among major U.S. metro areas. The Lakeland metro area (Polk County) isn’t faring any better, with the sixth-highest rate of deeply underwater homes among Florida metros. In the Lakeland area, a total 57,712, or 38 percent of homes with mortgages, were seriously underwater as of December. Fifty percent of area homes were deeply underwater in September, up from 46 percent of homes in May.”

“‘There’s still a lot of negative equity (in Polk) and we anticipate it will be like that for quite a while. That’s going to be a long-term issue that will have to be worked through,’ said Tyler Case, an economist with Moody’s Analytics who follows the Lakeland area. ‘(Polk) has actually made some good strides when it comes to its foreclosure rate and foreclosure inventory backlog.’”

The Herald Tribune. “Seven years into the foreclosure crisis, the court system designed to resolve these cases remains jammed. There were 11,880 active foreclosure cases in the 12th Circuit, comprising Sarasota, Manatee and DeSoto counties, as of Oct. 31, the latest data available. The region’s estimated foreclosure backlog stands at 40 months, according to the Florida State Courts Administrator. Since July 1, just 1,039 new foreclosure filings have entered the 12th Circuit. But problems persist with some older filings.”

“Of the 3,268 home defaults that were settled during that time, nearly 44 percent were dismissed without a final judgment — meaning those foreclosures will most likely cycle back into the system at some point, and further add to the backlog. The trend has played out across Florida, where 272,470 foreclosures remain pending, and 42 percent of the cases adjudicated since the start of the fiscal year in July were dismissed without a final disposition, records show.”

“In some cases, lenders voluntarily dismiss their foreclosures because they lack the proper evidence to proceed. Those cases will likely circle back to the docket later, as a new filing. Others ask for extensions. ‘An extension? This case is five years old,’ says retired Judge Robert Bennett, hired temporarily to carve away at the backlog. ‘Dismissed!’”

The Sun Sentinel. “South Florida and the state led the nation in foreclosure activity last year, topping the rankings as lenders and judges moved aggressively to reduce the backlog of cases from the housing crash. In Broward County, properties scheduled for auctions jumped by 72 percent (15,384 from 8,953) compared with 2012. In Palm Beach County, properties scheduled for auctions jumped by 55 percent (9,716 from 6,262) compared with 2012. In the county, 21,469 were in some phase of foreclosure in 2013.”

“South Florida foreclosure defense lawyer Tom Ice argues there are more foreclosures still to be filed. He said the new state law requires banks to have all their paperwork in order, which serves as a deterrent to filing cases. He added that banks also are reluctant to start the process because they no longer have control over how quickly the cases will be resolved. Ice and other lawyers said Florida courts are insisting on fast resolutions — sometimes catching homeowners and even banks flat-footed. ‘It’s trial or bust,’ Ice said.’

My Suncoast. “People who do a short sale on their home might face a much bigger tax bill. And the law that expired at the end of last year could have a huge impact on the Suncoast real estate market. Short sales, where banks allow homeowners to sell their property for less than they owe on their mortgage, have played a key role in the housing recovery we’ve had so far. ‘Oh, it’s been tremendously helpful,’ says Sarasota Realtor Lynn Robbins. ‘It’s saved some people hundreds of thousands of dollars.’”

“Last year, Congress finally acted in january, and made the law retroactive to cover anyone who had done a short sale. If lawmakers do nothing this year, the market will see effects. But it will still see at least some short sales, because one thing has not changed from last year, Robbins says. Most people who do them, don’t have a choice. ‘What is one to do? They don’t have the money,’ she says.”

The Guardian. “The Treasury Department launched Hardest-Hit in 2010 by allocating $7.6bn from Tarp to 18 states where the foreclosure crisis had done the most damage. The states were granted a share of the total funds and designed their own foreclosure relief programs. In Florida the idea behind the two core Hardest-Hit programs was to keep homeowners in their homes by intervening with their banks. For homeowners, the process of navigating the network of banks and advisers – and getting mixed signals from each – has been a trying one.”

“Deborah Stockhammer, an unemployed homeowner in Jupiter, Florida, is another who struggled with Hardest-Hit. She went through two rounds of the Hardest Hit Program in 2011 and 2013. Stockhammer says she initially entered the program with $3,000 due in back payments, and came out owing $7,600, still on the path to foreclosure. Stockhammer was served with foreclosure papers on New Year’s Eve.”

“Stockhammer resented that funds went to pay for Ocwen’s lawyers and other costs. (Other Hardest-Hit programs ban banks from using funds for fees, but Florida’s does not). ‘When [Hardest-Hit] gave the money to the mortgage company, they should have stated it solely went to back payments,’ she said. Her main complaint: ‘When I stop and think about the money President Obama gave to these companies, if he gave it to us homeowners we would have paid off our homes by now.’”

Bits Bucket for January 20, 2014

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