Fort Lauderdale Bankruptcy Lawyer Blog

Through the Federal Housing Authority (FHA), President Obama recently announced changes to the Home Affordable Refinance Program (H.A.R.P). This is a program that was meant to help Broward County homeowners refinance their existing adjustable rate mortgages to a fixed rate mortgage. Great? Not.

The Home Affordable Refinance Program was set up to help homeowners who cannot qualify for loans from private companies. The government-owned companies Fannie Mae and Freddie Mac agreed to offer loans at lower rates to borrowers with mortgage debts up to 125 percent of the value of their homes. It was just not realistic in today's market where most homes are valued at 125% under their loan balance.

The most significant change to HARP is the elimination of the 125% loan-to-value requirement for refinances. This allows all homeowners to refinance if they meet the other eligibility criteria - no matter how far their home value has fallen

Here are the changes announced by FHA:
• Eliminating certain risk-based fees for borrowers who refinance into shorter-term mortgages and lowering fees for other borrowers;
• Removing the current 125 percent loan-to-value ceiling for fixed-rate mortgages backed by Fannie Mae and Freddie Mac;
• Waiving certain representations and warranties that lenders commit to in making loans owned or guaranteed by Fannie Mae and Freddie Mac;
• Eliminating the need for a new property appraisal where there is a reliable AVM (automated valuation model) estimate provided by the Enterprises; and
• Extending the end date for HARP until Dec. 31, 2013 for loans originally sold to the Enterprises on or before May 31, 2009.

Here is the new HARP criteria:
• The mortgage must be owned or guaranteed by Freddie Mac or Fannie Mae.
• The mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009.
• The mortgage cannot have been refinanced under HARP previously unless it is a Fannie Mae loan that was refinanced under HARP from March-May, 2009.
• The current loan-to-value (LTV) ratio must be greater than 80%.
• The borrower must be current on the mortgage at the time of the refinance, with no late payment in the past six months and no more than one late payment in the past 12 month

That last one is a tough one to meet for most people. If you're behind on your mortgage and want to keep your home, you may have some options in a Chapter 13 bankruptcy. Call today and schedule a free appointment to discuss your case and review your options.

Last week, Federal regulators announced that 4 million borrowers who have faced foreclosure since 2009 are eligible for a review of their foreclosure. Regulators are looking for potential wrongdoing, errors and abuses by financial firms in the process of foreclosure.

Examples of financial injury might include unnecessary or miscalculated fees, a foreclosure that happened while in bankruptcy, or a foreclosure sale that happened while you were waiting for an approval or disapproval of a loan modification.

What is unknown right now is what compensation may be available and what rights do you have to sign away in exchange for that compensation.

This review is at no cost to you! Mortgage servicers are required to pay for the review which will be done by independent outside consultants.

Letters are being mailed out to eligible borrowers which will tell you how to request a review of your case. There is a deadline for requesting a review (April 30, 2012) so don't put off requesting a review if you are eligible to receive one.

To qualify, your mortgage loan would need to meet the initial eligibility criteria:
•Your mortgage loan was serviced by one of the participating mortgage servicers.
•Your mortgage loan was active in the foreclosure process between January 1, 2009 and December 31, 2010.
•The property was your primary residence.

Eligible customers will be mailed a letter by December 31, 2011 that explains the Independent Foreclosure Review process and a Request for Review Form that identifies some examples of situations that may have led to financial injury. The form must be completed and postmarked not later than April 30, 2012.

The Number One question that most people have when inquiring about a Chapter 7 or a Chapter 13 bankruptcy is whether they will lose their home because of the bankruptcy. The short answer is no. You will not lose your home because of a bankruptcy filing. The house you live in is protected by Florida's constitution under Homestead Exemption. You can only lose your home if you are not making the payments on it.

Filing a Chapter 7 bankruptcy will not help you keep your home but it won't hasten the loss of it either. On the contrary, filing a Chapter 7 bankruptcy will slow down the foreclosure process and let you stay in your home a little longer.

Filing a Chapter 13 bankruptcy may help you keep your home because it offers an opportunity to catch up on your arrears (the amount of money you are behind) and a Chapter 13 also offers options in dealing with second mortgages and homeowner associations.

I've spent most of the month posting about two important programs that Florida Housing will soon make available in Broward County: The Unemployed Mortgage Assistance Program (UMAP) and Mortgage Loan Reinstatement Payment (MLRP) Program.

There are many different eligibility requirements that I've already posted about (homeowner requirements and property requirements). But there's one more requirement worth talking about: the mortgage requirements.

Mortgage Requirements
In order to be eligible for either of the programs, your mortgage must currently be serviced by a participating lender. In Florida, Bank of America, Wells Fargo, Chase, Wachovia and CitiMortgage participate in the program.

Your first mortgage cannot be more than 180 days past due at the time you apply.

The existing first mortgage must have originated on or before January 2009 and you can't owe more than $400,000 at the time of application.

The maximum combined loan-to-value cannot be more than 200%.

The loan cannot be a seller-financed loan.

Click here for more information on Broward Florida Hardest Hit Program.pdf

In order to qualify for the Florida Hardest-Hit Program when it's available in Broward County next month, your property must also meet certain requirements. This is in addition to the other requirements that I've already posted about.

Property Requirements
First let's talk about what your home can be in order to apply for assistance:
It can be a single family home, condo (must be on the FHA approved list), townhome, mobile home or a duplex/triplex/fourplex that has one of the units owner-occupied.

Exclusions
1. The property cannot be abandoned, vacant or condemned.
2. The homeowner cannot have more than one property other than their primary residence.

Under the Florida Hardest-Hit program that is going to roll out in Broward County next month, you must meet eligibility requirements. I've gone over those requirements in earlier posts and wanted to take a look at what type of situations or events would disqualify you from being considered.

Assets or Cash Reserves
If you have assets or cash reserves (retirement funds or qualified educations plans don't count), that are equal to, or more than, three times the total monthly mortgage payment on your house (including tax and insurance) - you must first use those assets towards your mortgage payment or other existing debt before you'll be eligible for UMAP/MLRP funds.

Financial Hardship Defined
The borrower/co-borrower must have experienced a financial hardship through no fault of their own. The reduction of income due to death, divorce or disability of a borrower or a co-borrower will not qualify as a financial hardship. (I'm not quite sure how they consider the death or disability of someone an event that one can control but that's what the guidelines say!)

Furthermore...
A homeowner cannot have:
1. A seller-financed mortgage;
2. A bankrutpcy that has not been discharged or dismissed; and
3. A conviction within the last 10 years on a mortgage-related felony.

But that's not all...the property has requirements also! I'll write more about that at a later time.

Florida Housing will soon be rolling out two programs to help distressed homeowners in Fort Lauderdale, Florida. This program was piloted in Lee County last year and will soon be available statewide.

There are two programs available: 1) Unemployed Mortgage Assistance Program (UMAP) and 2) Mortgage Loan Reinstatement Payment (MLRP) Program.

Unemployment Mortgage Assistance Program (UMAP)
Under UMAP, loan funds can be used to pay monthly mortgage and escrowed mortgage-related expenses on your Fort Lauderdale or Hollywood home until you can resume payments or up until 18 months - whichever comes first. This program is for first mortgage payments only.

Broward county homeowners who are unemployed, underemployed or have had a reduction of income because of death, divorce or disability are eligible. To be considered for these funds, you must meet eligibility requirements in three areas: 1) household eligibility; property eligibility; and, 3) mortgage eligibility. You must meet all criteria within each category to qualify. However, simply meeting all the eligibility criteria does not guarantee approval for assistance under either program. The mortgage company can still deny your eligibility.

Homeowner Requirements
1. Must be a Florida resident
2. Must be a legal U.S. Resident or a legal alien
3. Must ocupy the home as your primary residence
4. Must be unemployed or underemployed
5. Total household income must be below 140% of the area median income (AMI) this includes all income for persons living in the home who are 18 years and older)
6. Must have monthly housing debt that is more than 31% of the homeowners gross monthly income (monthly housing debt includes: mortgage principal, interest, taxes, insurance and homeowner association dues)

Click here for more information on Broward Florida Hardest Hit Program.pdf

Florida Housing will soon be rolling out two programs to help distressed homeowners in Fort Lauderdale, Florida. This program was piloted in Lee County last year and will soon be available statewide.

There are two programs available: 1) Unemployed Mortgage Assistance Program (UMAP) and 2) Mortgage Loan Reinstatement Payment (MLRP) Program.

Mortgage Loan Reinstatement Payment Program (MLRP)
Under MLRP, loan funds can be used to bring the past-due first mortgage current on your Fort Lauderdale or Hollywood home current. Up to four months of mortgage payments can be paid under this program.

Broward county homeowners who are unemployed, underemployed or have had a reduction of income because of death, divorce or disability are eligible.

To be considered for these funds, you must meet eligibility requirements in three areas: 1) household eligibility; property eligibility; and, 3) mortgage eligibility. You must meet all criteria within each category to qualify. However, simply meeting all the eligibility criteria does not guarantee approval for assistance under either program. The mortgage company can still deny your eligibility.

Homeowner Requirements
1. Must be a Florida resident
2. Must be a legal U.S. Resident or a legal alien
3. Must ocupy the home as your primary residence
4. Must be unemployed or underemployed
5. Total household income must be below 140% of the area median income (AMI) this includes all income for persons living in the home who are 18 years and older)
6. Must have monthly housing debt that is more than 31% of the homeowners gross monthly income (monthly housing debt includes: mortgage principal, interest, taxes, insurance and homeowner association dues)

Click here for more information on Broward Florida Hardest Hit Program.pdf

Lee County quietly began a pilot program in October, 2010 to help homeowners with temporary hardships catch up their mortgage payments. FUnded by the U.S. Treasury Department, the program provided up to 18 months of mortgage assistance or help in bringing delinquent accounts up to date.

In Lee County, 963 homeowners applied for the assistance. Of those applicants, 480 were rejected for various reasons (owned more than one property; were more than 181 days late on payments; or owed more than 400K on their loan). However, 64 homeowners were approved, 108 are still in the pipeline for assistance and 371 are still being reviewed.

Next month, the program goes statewide and homeowners in Dade, Broward and Palm Beach counties will be able to apply for the assistance. Applications will be limited so it's best to keep tabs on this program and apply as soon as you're able.

I'll have more on this program as facts become available

I read with amusement the filed response by Deutsche Bank regarding "Execution of Signed Affidavit" in a foreclosure case (Deutsche's Response to Bogus Affidavit.pdf). It showcases the strategy that banks are going to use in whitewashing the rampant fraud that has taken place in the mortgage industry. Your first clue that there is a problem is the title of the case. The case caption (title) reads: Deutsche Bank National Trust Company, as Trustee for Long Beach Mortgage Loan Trust 2006 -4 v. India Channels. Although the bank suing for foreclosure is Deutsche, the bank filing a response is Chase! The filing states:

"Chase/Washington Mutual Bank, FA has engaged independent outside counsel to review its affidavit preparation and signature process to confirm that it satisfies documentary and
evidentiary standards. Chase/Washington Mutual Bank, FA requests that the court not
enter judgements in pending matters until it completes this review. It is anticipated that this review should be completed in a few weeks."

From all reported accounts, we're talking about hundreds of thousands of affidavits and they're going to review them all for accuracy in a few weeks? Riiiiight. First we had Robo-signors and now they will appropriately be reviewed for accuracy by "Robo-Reviewers."

The Florida Attorney General is on the executive committee of a nation wide task force of AG's looking into this problem. The problem is huge. Everyone should be outraged if criminal charges are not brought for this ongoing and intentional fraud upon homeowners everywhere by the banking industry and law firms they employed. What about you? Are you sure that whoever you're paying your mortgage to has a right to collect the money? This affidavit issue is just the tip of a huge iceberg.

The documents would not have to be backdated, forged, etc if they had been properly endorsed to begin with...but it appears that they weren't. I'll be writing more on this issue - stay tuned!

A little known foreclosure alternative program by Fannie Mae became available on August 1, 2010. The Home Affordable Foreclosure Alternatices ("HAFA") program provides options to homeowners so they can avoid foreclosure. It also provides incentives to lenders for them to either approve short sales or accept a deed-in-lieu of foreclosure.

Under the program, homeowners will receive $3,000 to help them relocate to another residence. This money is received at the closing if it's a short sale or within 5 days of the lender accepting the deed-in-lieu of foreclosure. Part of the agreement is that the homeowner must vacate the property and leave it in acceptable condition.

To be eligible for HAFA, owners must not qualify for a HAMP loan modification ("Home Affordable Modification Program") or they were approved for a HAMP modification but missed two consecutive payments under HAMP.

There are other alternatives to saving your home also. In a Chapter 13 bankruptcy, you can force the bank to accept any arrearages through the court's payment plan. You can also eliminate a second mortgage through a Fort Lauderdale Chapter 13 bankruptcy filing if you owe less on your first mortgage than what your home is presently worth. Talk to a Broward County bankrutpcy attorney for more information on this option.

Continue reading "Broward County Foreclosure Alternatives: Fannie Mae Announces HAFA Program" »

Since the beginning of the housing crisis, Florida has consistenly held one of the nation's highest foreclosure rates. In response, the Florida Supreme Court Administrative Order requiring mediation for mortgage foreclosures on homestead properties, Fannie Mae recently issued a new servicing guideline regarding pre-foreclosure mediation for mortgage loans in Florida.

Under the new Fannie Mae guidelines, foreclosure attorneys for the bank must hold a mediation session before filing foreclosure on a property.

The new policy will apply to all mortgages held in Fannie Mae's portfolio. This will include loans that are part of a mortgage-backed securities (MBS) pool that have the special servicing option, or a shared-risk MBS pool for which Fannie Mae markets the acquired property.

Real estate values have been steadily dropping over the past 4 to 5 years. This economic crisis has resulted in many homes being worth less than what is owed on the mortgages. For some homeowners, this can be an opportunity to eliminate a second mortgage through a Fort Lauderdale Chapter 13 bankruptcy filing. One of the most common questions I am asked as a South Broward bankruptcy attorney is: "How do I get rid of my second mortgage?"

In order to eliminate a second mortgage through a Chapter 13 bankruptcy, you must owe more on your first mortgage than what your house is worth. That is not a difficult feat to accomplish in today's depressed real estate market. If you owe more on your first mortgage than what your house is worth, then you can ask the bankruptcy court to make a judicial determination that your second mortgage is not secured by your home since there is no equity "securing" the second mortgage.

Once that determination is made, then your second mortgage becomes an unsecured debt and moves over to the pile of unsecured creditors hoping to get some money from your monthly payments to the court. When you are done making your plan payments, any unsecured debts that didn't get paid in full are discharged (wiped out) by the court.

Although I've tried to explain the process in a simple matter, it is not something that you should try on your own.

Continue reading "My Hollywood Florida Home Is Under Water! How Can A Chapter 13 Bankruptcy Eliminate My Second Mortgage?" »

FHA has announced that it will begin offering FHA-insured mortgages to qualified non-FHA borrowers that are underwater on their mortgages. This new refinance program will begin on September 7, 2010 and is targeted to help homeowners who are current on their mortgage payments and whose lenders agree to write off at least 10 percent of the unpaid principal balance.

As we all know, lenders have been very reluctant to write off principal on existing loans. The logic behind that has always eluded me since most homeowners that I speak to would be more than willing to continue making payments even if the final balance is still reasonably more than the house is worth. The key word there is "reasonably." It would make sense for lenders to secure a new income producing mortgage for more than what they could get at a subsequent foreclosure sale and the homeowner would be happy staying in their home and making a payment they can afford! But logic rarely rules the day anymore when it comes to banks.

FHA has just sent lenders a mortgage letter explaining the details of the new "negative equity" program.

To be eligible for a new loan, the following criteria applies:

Continue reading "Hollywood, FL Mortgage Principal Reduction: FHA Announces Principal Reduction Program" »

As a Fort Lauderdale bankruptcy attorney, I often meet with homeowners who are facing a scheduled foreclosure sale. During their free consultation, the main question they have is "how will a bankruptcy stop the sale of my home?" There are a couple of options available under the bankruptcy laws on how to stop a foreclosure sale.

First, either a Chapter 7 or a Chapter 13 bankruptcy filing will invoke an "automatic stay" and stop a foreclosure sale from happening as long as you file the bankruptcy case with enough time to submit a Suggestion of Bankruptcy notice to the Clerk of Court that is conducting the sale. Although you could technically show up the morning of the sale and do this, that's never a good idea. You should try and file your case at least 2-3 days before the sale to allow time to notify the Clerk's office of the bankruptcy filing. Ideally, you should file your bankruptcy case at least a week before but if all you have is a few days, it will suffice.

A Chapter 7 bankruptcy filing will stop the sale for you and eliminate all your debts, but it probably won't do much towards saving your home. After the case is over and the automatic stay is lifted, the foreclosure proceeding will start up again and a new sale date will be scheduled.

In a Chapter 13, aside from stopping the sale, you also have a couple of options that might help you stay in your home long term. In a Chapter 13, you can submit a repayment plan to the court that includes your mortgage arrearages (all the money that you're behind in your mortgage) and your current mortgage payment. The banks are forced to take your payments over three to five years and allow you to catch up with your mortgage. If you complete your plan, at the end of the repayment period, you are current with your mortgage and your payment goes back to what it was before you fell behind.

In Broward County, the Chapter 13 trustee, Robin Weiner, is working diligently towards offering a loan modification program within Chapter 13. Due largely to her efforts in bringing the lenders and debtor attorneys together to agree on guidelines that are acceptable to everyone, homeowners will soon be able to apply for HAMP modifications through mediation during the Chapter 13 process. Certain restrictions apply for this program but it's a great opportunity for Chapter 13 filers to speak directly with their lenders and see if they can get their mortgage modified. More on this later.