Bankruptcy and Foreclosure Attorney Blog

The rising supply of homes for sale – including a “shadow inventory” of homes being sold as a result of homeowners who are in default or foreclosure – may continue to negatively affect U.S. home prices for another three years, according to a Bloomberg report.

Analysts from Moody’s Analytics, Fannie Mae, Morgan Stanley and Barclays agree that shadow inventory is preventing prices from bottoming out. Median home prices have dropped 28 percent since 2006 in the U.S.

Experts say that once prices bottom out, it will take three or four years for prices to consistently rise one to two percent a year – making a full equity recovery for many homeowners more than a decade away.

On Sept. 15, Fannie Mae lowered its 2010 forecast for home sales, and is now projecting a seven percent decline from 2009. A senior analyst from Moody’s estimates that approximately two million homes will be seized by lenders via foreclosure by the end of 2010, and predicts that this additional inventory will result in a price reduction of another five percent.

Fannie Mae reported earlier this month that seven million U.S. homes are vacant or in the foreclosure process. Florida is the second highest state in the nation for foreclosure filings.

Once the largest independent mortgage lenders in the U.S., Ocala-based Taylor Bean & Whitaker Mortgage Corp. has asked a Jacksonville bankruptcy court to allow it to walk away from 37 properties it says are worth little to avoid tax and upkeep expenses.

The mortgage lender, which closed down last year amid a criminal investigation as one of the largest loan suppliers to Freddie Mac, said in its filing that the expenses associated with paying taxes and maintaining the 37 properties, which have been abandoned by their owners, is approximately $91,000 more than what they are worth.

The properties are located in economically depressed major metro areas including Detroit, Milwaukee, Chicago and St. Louis. Taylor Bean says that the total worth of all 37 properties together is less than $100,000.

Former Taylor Bean chairman Lee Farkas has a Nov. 1 trial date on 16 counts of bank, wire and securities fraud, as well as a charge of attempting to defraud the U.S. government of over $500 million in Troubled Asset Relief Program (TARP) funds.

The attorneys for Lee Farkas have had to petition the Jacksonville bankruptcy court to unfreeze his assets in order to pay his legal expenses.

Some homeowner’s associations in Florida are lining up behind lenders to file foreclosures on homes that are behind in their assessment and dues payments, according to a story recently in the Bradenton Herald.

The story noted that one Manatee HOA, frustrated by a number of unsuccessful attempts to persuade a homeowner to pay his past due assessments, reluctantly took the step of foreclosing on his home. And, according to the article, this tactic is coming into use more frequently with the number of homeowners past due on their HOA payments growing every day due to continued high unemployment and the ongoing economic slump.

In Manatee County alone, there were 192 foreclosures filed by HOAs in 2009, compared to only 83 filed in 2008. As of June 30, there were 80 foreclosures filed by HOAs in Manatee County so far for 2010.

Under state law, Florida foreclosures must be handled through the courts, so many HOAs remain skeptical about being able to recoup delinquencies when legal fees might eclipse what they can collect. In addition, in Florida, HOAs take a back seat to lenders in lien priority, so if a bank has already filed a lien on a home, it makes little sense to attempt to collect HOA debts through foreclosure.

A more affordable version of the Home Equity Conversion Mortgage (HECM) has been announced by the Federal Housing Administration in an effort to help struggling seniors access the equity in their homes to pay living and healthcare expenses.

The new HECM Saver has lower upfront closing costs for homeowners who want to borrow a lesser amount than what is available through the standard HECM loan. The option will become available on Oct. 4, 2010.

FHA Commissioner David H. Stevens said that the agency designed the new reverse mortgage loan product because many seniors have found the HECM fees to be too expensive. HECM Saver significantly lowers the upfront Mortgage Insurance Premium that is required for a standard HECM loan.

HECM Saver will carry an upfront premium of 0.01 percent of the property’s value, as opposed to the two percent premium that was required for a standard HECM loan. The monthly Mortgage Insurance Premium will be charged at an annual rate of 1.25 percent of the outstanding loan balance.

The FHA said they could offer the lower fees because the risk is less when homeowners are borrowing less. Those who opt for the HECM Saver will get 10 to 18 percent less than they would receive under a standard HECM loan.

If you are a Florida homeowner who is interested in learning more about how to prevent foreclosure, contact our Jacksonville foreclosure defense law firm.

Bank repossessions were up 25 percent in August from the same month one year ago, according to RealtyTrac, a foreclosure online marketplace. Home repossessions were at the highest level last month since the beginning of the mortgage crisis three years ago.

RealtyTrac said that more than 2.3 million American homes have been repossessed since December of 2007, and estimates another one million homes will be lost to foreclosure this year.

Data shows that lenders repossessed more than 95,000 homes in August, which is a three percent increase from July and a 25 percent increase from August of 2009. August was the ninth consecutive month for year-over-year increases in foreclosure rates.

Banks have increased repossession activity in an effort to shrink their bad loan backlog, but are reluctant to saturate the market with repossessed properties for fear of further decreasing median home prices. It is estimated that fewer than one-third of bank repossessions are currently on the market.

Lenders are also delaying the initiation of foreclosure proceedings against delinquent borrowers, which is allowing homeowners to stay in their homes longer. Initial defaults fell in August by 30 percent over August 2009, and have declined on an annual basis for the past seven months.

The Mortgage Bankers Association reports that refinancing and home mortgage applications both declined for the third straight week for the week ending September 17, an indication that home sales are stalling even more following the expiration of the federal homebuyer tax credit.

Even with interest rates at near-record lows, refinancing applications were down one percent for the third straight week, and home purchases fell 3.3 percent for the week. According to the MBA, the combined four-week moving average fell 2.3 percent. Currently, over 81 percent of mortgage application activity is for refinancing.

Credit continued high unemployment and weak economic conditions for keeping homeowners in their current home, and discouraging others from a purchase. Experts say that without more hiring, a housing market recovery is unlikely, since people need income to qualify for mortgages.

Florida’s unemployment rate rose to 11.7 percent in August from 11.5 percent one month earlier and 10.7 percent in August 2009. Florida currently has the fifth highest unemployment rate in the country, after Nevada (14.4 percent), Michigan (13.1 percent), California (12.4 percent) and Rhode Island (11.8 percent). Some areas of the state fare worse than others – Duval County unemployment was at 12.7 percent in August, up .02 percent from July and 1.2 percent from August 2009.

If you are a Florida homeowner who is interested in learning more about how to prevent foreclosure, contact our Jacksonville foreclosure defense law firm.

If bankruptcy was a physical illness, we would be able to feel its symptoms and know that something was wrong. However, many people come to bankruptcy in a state of surprise – or denial – about how they got there, even if it was through no fault of their own.

In the past year, more than 1.5 million Americans have filed bankruptcy – more than 20 percent from one year ago. And more than ten times that number – around 15 million – are currently unemployed in a bleak jobs market.

So are there “symptoms” that put you at greater risk for bankruptcy? There are:

Heavy credit card debt – carrying a lot of credit card debt, especially on cards that have high interest rates, can put you in a financial hole quickly and keep you there for years. Discharging this debt through bankruptcy is one option if you will be unable to pay off this debt.

High medical bills – a health crisis can quickly put you deeply in debt. In fact, medical bills are the #1 reason people file bankruptcy.

Student loan debt – the cost of attending college has outpaced many Americans’ ability to pay for it.

Aspirational spending – this is just spending more than you can afford so you appear more prosperous – aka, “keeping up with the Joneses.”

Payday loans – taking out advances on your paycheck by using payday loans is a sure sign you are in major financial trouble. It has been estimated that fees on a one-week loan can make the interest rate as high as 911 percent. Which should have you calling 9-1-1 for help!

A Pew Research Center survey of nearly 3,000 Americans entitled, One Recession, Two Americas shows that 55 percent of adults say the “Great Recession” has made noticeable changes in the way them live – and a majority of those say the changes have been major.

The Pew study classified Americans as fitting into two distinct groups over the past four years: the Lost Ground group (55 percent) and the Holding Their Own group (45 percent). Of those in the Lost Ground group:

• 44 percent say they have experienced major changes in the way they live
• 35 percent have had trouble paying their mortgage or rent
• 42 percent have had to borrow money from family or friends
• 48 percent experienced difficulty finding and paying for medical care
• 48 percent said their family income decreased
• 60 percent tapped into savings and retirement funds
• 64 percent said that their financial situation today is worse than five years ago

The Pew survey found that unemployment is clearly related to which group an individual fell into, with a highly disproportionate number of those in the Lost Ground category
experiencing a job loss, pay cut, cut in hours or unpaid time off. In terms of demographics, the Lost Ground group had a higher number of young people, minorities and those with a high school education or less than those in the Held Their Ground group.

If you have lost so much ground that you are considering filing bankruptcy, contact a Jacksonville bankruptcy attorney.

National credit reporting firm Experian has ranked Jacksonville 112th out of 142 U.S. metropolitan areas for average credit scores. An Experian study said that the average credit score for Jacksonville is 727, down from 730 in 2009 and 736 in 2007.

The credit scoring system used by Experian and the other two major credit reporting agencies is called VantageScore, which is based on a consumer’s history of paying bills on time, the amount of credit they utilize and the outstanding balance on loans. Those with lower credit scores find it more difficult to obtain loans and are considered to be at a higher risk by lenders.

Jacksonville currently falls into the high-risk category, according to the Experian report, which makes it more difficult for Jacksonville residents to obtain loans and for those who do, they are more likely to be stuck with paying higher interest rates on those loans.

Jacksonville’s low rating is due in large part to the large number of homeowners who are underwater on their mortgages or in foreclosure, and the area’s high rate of unemployment. The report found that Jacksonville residents have a high number of late payments in comparison with other U.S. metro areas.

If you are struggling with debt and want to learn about your options for debt relief, contact a Jacksonville bankruptcy attorney.

Panelists at the Dow Jones Private Equity Analyst Conference in New York said that now is a good time to restructure a company in bankruptcy, according to a Wall Street Journal story.

Analysts said that there is more capital available today and it is easier for companies to obtain debtor-in-possession financing – the most senior loan -- today than it was just two years ago. One investment banker noted that Blockbuster’s recent Chapter 11 bankruptcy filing enabled it to get a $125 million debtor-in-possession loan and that companies today have access to “billions and billions of capital.”

Representatives of private equity firms also reported that they have found it easier to raise money for distressed properties, and that there is a lot of competition for deals. One restructuring company executive said that real estate companies would be a “hot area” in the coming years since many have debt from 2006 that comes due in the next two years.

The American Bankruptcy Institute reported that business bankruptcy filings decreased by four percent in the first six months of 2010, compared with the same period in 2009. Chapter 11 bankruptcy filings were down by 17 percent, and Chapter 7 liquidations were virtually flat from the previous year.

The authors of a new Princeton University study said that the U.S. foreclosure crisis has racial dimensions, and that racial discrimination played in key role in the large number of minority homeowners who defaulted on their mortgage loans.

According to the study, African-Americans were more likely to be given sub-prime loans than whites, even when financial backgrounds were similar. From 1993 to 2000, the study found that the number of minority sub-prime loans increased from two percent to 18 percent, and that residential segregation created a pool of minority borrowers that lenders targeted with more risky sub-prime loans.

The Princeton study, published in the October issue of the American Sociological Review, was authored by two Woodrow Wilson School of Public & International Affairs scholars. Their findings showed that racial segregation in housing is a powerful predictor of foreclosure rates. Minority neighborhoods are usually underserved by leading financial institutions, making them more vulnerable to predatory lending practices.

The authors compared borrower financial data and residential location for white and minority homeowners in 100 U. S. metropolitan areas for the study. They concluded that the government needs to take action to remove discrimination from lending practices by amending the Civil Rights Act and sanctioning those lenders that discriminate.

A reaffirmation agreement is a legally binding agreement between a debtor and a secured creditor that says the debtor will be financially responsible for the debt now and in the future. It is usually executed to protect a home or a car. However, is it a good idea? Usually not.

Many people who file Chapter 7 bankruptcy want to eliminate their unsecured debt but keep their home or vehicle. They may think a reaffirmation agreement will enable them to do so. However, they are giving up the protection that bankruptcy provides when it is not usually necessary to do so, especially in this economy.

Secured lenders do not want your property, they want your payments. So they will in most cases agree to voluntary repayment without having to sign a reaffirmation agreement. If you do sign a reaffirmation agreement, you are obligating yourself to be financially liable for the property – if you are late on payments, you can still lose your property and be financially liable. If the lender repossesses the property and sells it, they can still sue you for any outstanding balance.

A Florida bankruptcy lawyer can help you understand the pros and cons of a reaffirmation agreement as it pertains to your Chapter 7 bankruptcy filing.

Real estate data and analytics firm Radar Logic analysts say that delaying foreclosures could “simply push the economic reckoning further into the future, and any relief in the short term will be offset by pain in the middle- or long-term, with no net benefit to housing markets or the national economy."

The current foreclosure moratorium by some of the nation’s largest lenders have economists scrambling to determine what kind of impact action may have on the housing market. Radar Logic says that although halting foreclosures for a time may give borrowers an opportunity to catch up on their delinquent payments, analysts believe it is unlikely that they will do so.

Radar Logic said that their data indicated the fewer homes taken back by a lender in the foreclosure process could temporarily reduce what it calls “motivated sales”, which can lead to a price increase. The company said that currently, motivated sales represent the largest pool of real estate transactions in the top 25 U.S. metro areas that the firm tracks.

Radar Logic noted that the foreclosure halt could lead to positive impacts as well. If borrowers were able to restructure loans or get caught up on payments, this would limit the pool of lower priced homes for sale, which would in turn stabilize home prices at a higher level.

All of Florida’s major metropolitan areas, including Jacksonville, were listed in the Forbes Top Ten Cities with the Highest Foreclosure rates. Jacksonville made it on the foreclosure list as the result of its seven percent foreclosure rate and 13 percent rate of mortgages that are 90 days or more past due.

Other cities on the Forbes Top Ten foreclosure list of metro areas of 100,000 homes or more included:

• Miami, FL – 18 percent foreclosure rate and 27 percent rate for mortgages 90 days past due
• Las Vegas, NV – Nine percent foreclosure rate, 20 percent rate for mortgages 90 days past due
• Newark, NJ -- Six percent foreclosure rate, 10 percent rate for mortgages 90 days past due
• Chicago, IL -- Five percent foreclosure rate, 10 percent rate for mortgages 90 days past due
• Riverside, CA -- Five percent foreclosure rate, 16 percent rate for mortgages 90 days past due
• Camden, NJ -- Five percent foreclosure rate, nine percent rate for mortgages 90 days past due
• Nassau-Suffolk, NY -- Four percent foreclosure rate, 10 percent rate for mortgages 90 days past due
• Phoenix, AZ -- Four percent foreclosure rate, 13 percent rate for mortgages 90 days past due
• Detroit, MI -- Four percent foreclosure rate, 14 percent rate for mortgages 90 days past due

Palm Beach County Judge Jack S. Cox has ruled that Florida Attorney General Bill McCollum lacks standing to file a subpoena against one of the law firms targeted in the state’s “foreclosure mill” investigation, which effectively blocks the investigation of that firm’s foreclosure practices.

McCollum has alleged that Boca Raton law firm Shapiro & Fishman was one of four Florida law firms that may have used fraudulent documents to speed the processing of foreclosure cases on behalf of lenders.

McCollum had subpoenaed documents, emails and contracts from the firm’s last five years of transactions on behalf of lenders. In his ruling, Cox found that the Attorney General lacked standing under the Florida constitution and separation of powers doctrine to regulate attorneys, which he said only the Florida Bar or the state Supreme Court can do.

Legal experts said that Cox’s ruling could halt the state’s foreclosure mill investigation entirely, although McCollum’s office said it was still exploring its options for proceeding or appealing the judge’s ruling.

Florida leads the country in foreclosure filings, with over 400,000 to date in 2010. The four law firms that are currently being investigated are involved in approximately 80 percent of those cases, according to media reports.

As millions of Americans still struggle to make ends meet, a Woman’s Day article is offering some practical advice from financial experts in dealing with three major financial crises: unemployment, having an underwater mortgage and loss of retirement savings.

Unemployment: If you have lost your job, financial experts agree that your first step should be to stop as much spending as possible. Forget about paying off debt and make the minimum payments only. Apply for unemployment benefits as quickly as possible. If you have to, use credit cards for groceries and gas, but nothing nonessential. Do not raid your retirement accounts. Take any job offer that comes along.

Underwater mortgage: If you can still make your payments, stay where you are. If you have to move, you can probably get a bargain in this market on another house – if you can’t sell yours yet and you are not terribly underwater, considering waiting to sell until the economy gets better, even if you have to tap into your savings to make up the difference. Think hard about renting – it is not always a good option. If you are considering walking away, speak first to a foreclosure defense attorney to learn about all your options.

Loss of retirement savings: If you haven’t made a move yet, leave your accounts alone. Do not stop contributing to a 401 (k) and do not cash out. If you dumped all your stocks, buy back in now while prices are still low. Get help from an estate planning attorney or financial planner on the best move for your age and risk tolerance level.

To get information on bankruptcy as an option for debt relief, contact our Jacksonville bankruptcy law firm.

Jan Hatzius, the chief U.S. economist for Goldman Sachs Group, has two economic outlooks for the nation over the next six to nine months: “fairly bad” to “very bad”.

In the fairly bad scenario, Hatzius says that the unemployment rate will continue to rise at a moderate pace to about ten percent, and economic growth will be at a 1.5 to 2 percent snail’s pace. In the very bad scenario, the U.S. economy would return to a full recession.

Hatzius said that he believes the Federal Reserve will probably make some kind of move to hasten growth in early November at its next meeting. This may include increased Treasury purchases to keep borrowing costs low.

While he noted that the “fairly bad” outlook is the one he believes is more likely to occur, Hatzius did say that he thinks the odds of a renewed recession have risen from 15 to 20 percent at the beginning of this year to 25 to 30 percent today.

Fed Chairman Ben Bernanke said earlier this month that he believes the Fed has an obligation to help the economy as long as unemployment hovers around the 10 percent mark.

If you have suffered a job loss and have a large amount of debt that you are no longer able to handle, contact our Jacksonville bankruptcy law firm.

Undoubtedly to the surprise of no one who watches Bravo TV’s The Real Housewives of Washington, D.C., the company run by Tareq and Michaele Salahi – America’s Polo Cup Inc. – has filed for Chapter 7 bankruptcy protection.

If you’re not a Housewives fan, you’ll probably remember the Salahis as the couple that famously crashed a White House State Dinner last November. One of the results of that scandal was a probe into America’s Polo Cup, a business the Salahis say raises money for charitable organizations, by the Virginia Department of Agriculture and Consumer Services.

The Chapter 7 bankruptcy filing listed $329,850 in debt – including over $300,000 owed to a catering service -- and $67,000 in assets.

According to a 2009 Washington Post story, the Salahis are the only principals listed for America’s Polo Cup, which has held an annual fundraising event each year since 2007 to raise money for the Journey for the Cure, a nonprofit foundation that also lists the Salahis as its sole directors. Virginia regulators have said that the foundation never registered to raise money in the state, and had not filed any financial statements until requested to do so late last year. The financial information provided was for 2007 only, and consisted of “a few typed lines” that listed $18,000 in contributions and $15,000 in donations.

The Salahis have said America’s Polo Cup is sanctioned by the “National Polo League;” however, the United States Polo Association – America’s governing body for the sport -- says no such organization exists.

The U.S. Labor Department reports that the U.S. economy lost 95,000 jobs in September, a sharp drop that was far worse than economists had predicted and an ominous indicator that the fragile economic recovery has stalled.

The government reported that the majority of the job losses were in the government sector, and included Census worker jobs and local government layoffs. Total government jobs fell by 159,000, and the private sector added only 64,000 new jobs during September. Economists say that private sector jobs must be added at the rate of 150,000 per month for the unemployment rate to remain flat.

The Labor Department reported that the national unemployment rate remains at 9.6 percent. This rate measures the percentage of American workers actively looking for jobs. Another unemployment measure – which includes people who have given up looking for work and those who have accepted part-time jobs because they cannot find full time employment – rose last month from 16.7 percent to 17.1 percent.

Of the 159,000 government jobs lost, temporary Census employees accounted for 77,000 losses local government layoffs totaled 76,000, and 7,000 state government jobs were eliminated in September. The report said that most of the state and local government job losses were in education – a total of 72,700.

If you are unemployed and want to learn about your options for debt relief, contact a Jacksonville bankruptcy attorney.

According to the American Bankruptcy Institute, consumer bankruptcy filings in the U.S. are up 11 percent for the first nine months of the year, as compared with the same period one year ago. From January through September, U.S. consumer bankruptcy filings totaled 1,165,172, as compared with 1,046,449 for the same nine-month period in 2009.

The ABI noted that consumer bankruptcy filings for the first three quarters of this year are the highest since 2005, when the bankruptcy laws were changed to try to make it more difficult for Americans to discharge their debt through bankruptcy.

The ABI said that it now expects 2010 consumer bankruptcy filings to total almost 1.6 million.

For the month of September, U.S. consumer bankruptcy filings rose 4.4 percent compared with September of 2009. The September 2010 consumer bankruptcy filing of 130,329 was also 3.3 percent higher than the previous month. Chapter 13 bankruptcy filings were approximately 30 percent of all filings, which was a slight increase from August as well.

ABI executive director Samuel J. Gerdano said that consumer debt and continued financial stress were the main contributors to the increase in U.S. consumer bankruptcy filings in 2010.

According to real estate analysis firm RealtyTrac, short sales – where lenders accept less than what is owed on a property -- accounted for one-fifth of all Florida home sales in the second quarter of 2010, an indication that lenders may be more willing to work with distressed homeowners.

Nationally, short sales were less than half that of Florida’s rate, at 9.5 percent. During the second quarter, 34 percent of all Florida home sales were foreclosures, which includes short sales and sales of bank-owned homes.

RealtyTrac also reported that foreclosure activity in the U.S. was up by four percent in August compared with the previous month, but down by five percent compared with foreclosure activity in August 2009. Last month, one in every 381 U.S. homes received a foreclosure filing.

In August, Florida foreclosures decreased on a year-over-year basis for the fifth straight month, but Florida continues to be the second highest-ranking state for foreclosures in the country behind Nevada. During August, one in 155 Florida homes received a foreclosure filing, which is 2.5 times the national average.

Florida accounts for almost 17 percent of the national foreclosure total, with almost 57,000 properties receiving a foreclosure filing in August – a 10 percent increase from July 2010 but a nine percent decrease from August 2009.

A new bill has been introduced in the U.S. House of Representatives by Rep. Dennis Cardoza (D-CA) that would allow homeowners with mortgages either held or backed by Fannie Mae or Freddie Mac to refinance with historically low locked-in rates.

Up to 30 million American homeowners may be eligible for the program if the bill passes. They would be able to refinance without penalty regardless of credit history, income level or loan-to-value ratio, according to Cardoza. The legislation would make it possible to refinance a government-backed loan with a new 30-year, fixed-rate mortgage at the prevailing market rate, which is currently around 4.3 percent.

The Cardoza plan would not provide for writedowns of principal balances for homeowners who are underwater on their mortgages, but it would allow them to refinance to obtain a lower monthly payment. Cardoza said he introduced the bill to help stop foreclosures.

Cardoza’s plan is a revamp of an earlier bill he introduced in January of 2009. He said that historically low mortgage interest rates now make the plan more viable. The plan calls for Fannie Mae and Freddie Mac to issue new mortgage-backed securities to fund the refinancing program, using the proceeds to pay off existing mortgages.

However, the bill is expected to face an uphill battle in Congress, and no action is expected on it until after the November elections.

If you are a Florida homeowner who is interested in learning more about how to avoid foreclosure, contact a Jacksonville foreclosure defense lawyer.

JPMorgan Chase said that it is putting a temporary halt to open foreclosure cases while it verifies that foreclosure documents filed in court were reviewed properly.

Earlier this month, GMAC Mortgage stopped its foreclosure proceedings when it was revealed that employees signed foreclosure affidavits without reviewing the loan files. Chase said that it has discovered a similar situation in one of its loan offices, but believes the affidavits filed in foreclosure cases it is involved in are accurate and not affected by whether or not the signer knew loan file details. Chase has engaged outside counsel to review the preparation of its affidavits to ensure they are satisfying court requirements.

A Chase spokesman said the review is expected to take several weeks, and that the company has asked that no judgments be entered in pending court cases. Chase is the third largest home loan servicer in the nation, with over $1.3 trillion in mortgages.

Florida’s court system has been deluged with a record number of foreclosures over the past few years, and Florida foreclosure defense attorneys say that the courts have generally accepted problematic documents, especially in those cases involving homeowners who have no legal representation or who fail to show up in court to argue their case.

Data provided by foreclosure online marketplace RealtyTrac shows that Jacksonville foreclosure filings rose by almost 20 percent in August from the previous month, but were down over 17 percent from the same time last year.

Foreclosure filings for the Jacksonville metro area – which includes Duval, Baker, Clay, St. Johns and Nassau counties – totaled 3,201 in August. That means that nearly one in every 185 homes in the Jacksonville metro area was in some stage of the foreclosure process, ranking Jacksonville 25th in the nation for foreclosures.

Overall, Florida foreclosure activity was down in August, but the state still ranks second only to Nevada for foreclosures with 17 percent of the national total – a 10 percent increase over July, but down nine percent from one year ago. Approximately one in every 155 Florida homes received a foreclosure notice last month, which is 2.5 times the national average.

Nationally, foreclosure filings in August were up four percent from July 2010 but down five percent from August 2009. Currently, one in every 381 American homes is in some stage of the foreclosure process. Five states – California, Florida, Michigan, Illinois and Arizona -- now account for over half of the national total of foreclosures.

If you are a Florida homeowner who is interested in learning more about how to avoid foreclosure, contact our Jacksonville foreclosure defense law firm.

Florida Congressman Alan Grayson has asked the Florida Supreme Court to halt all foreclosures involving three “foreclosure mill” law firms currently under investigation for document fraud by the Florida Attorney General’s office until that investigation is complete.

In a Sept. 20 letter to Florida Supreme Court Justice Charles Canady, Grayson wrote, “Taking someone’s home should not be done lightly. And it should certainly be done in accordance with the law.” The letter also made reference to a Jacksonville foreclosure case that was dismissed with prejudice for document fraud. In that case, Chase had attempted to foreclose on a Jacksonville home when the mortgage note was actually owned by Fannie Mae.

The “foreclosure mills” currently under investigation account for approximately 80 percent of all foreclosure proceedings in Florida. Grayson’s staff has reportedly spoken with a number of Florida foreclosure defense attorneys and foreclosure specialists, prompting the Congressman to write, “If the reports I am hearing are true, the illegal foreclosures taking place represent the largest seizure of private property ever attempted by banks and government entities. This is lawlessness.”

A week after receiving the letter, the Florida Supreme Court said it could not halt foreclosures in Florida because it has no authority under the state’s constitution or court rules to intervene in pending cases on the basis of fraud or wrongdoing. The Court referred Grayson to The Florida Bar, which handles attorney misconduct complaints.

The federal Financial Crisis Inquiry Commission, formed by Congress last year to investigate the financial crisis, said in a hearing in Miami that Florida led the nation in mortgage fraud, which is responsible for trillions of dollars in bad loans and a major contributor to the financial collapse of the housing market.

The Commission met in Miami to conduct a hearing on predatory mortgage practices, and concluded that the financial impact of mortgage fraud was more serious than most experts had estimated. In addition, because of Florida’s statue of limitations, fraudulent loans issued more than three years ago are no longer subject to prosecution.

A panel of local and national experts spent five hours testifying before the Commission. They said that inadequate regulation and unregulated financial incentives contributed to the loss of more than $1 trillion between 2005 and 2007. One risk mitigation expert said that as many as 70 percent of mortgages now in foreclosure were the result of some element of fraud.

The Mortgage Asset Research Institute has ranked Florida as #1 in the nation for mortgage fraud every year since 2006.

The Commission is scheduled to provide its comprehensive financial crisis report to President Obama by December 15. The report is being developed to help lawmakers have a better understanding of the regulatory and market forces that led to the mortgage fraud crisis.

If you are a Florida homeowner facing foreclosure and feel you may be a victim of mortgage fraud, contact a Jacksonville foreclosure defense attorney.

A federal judge has reopened the bankruptcy case of George gubernatorial candidate Nathan Deal’s daughter and her husband following a government attorney’s assertion that Deal should have been listed as a co-debtor in the case.

Deal, the Republican candidate for governor of Georgia and a former Georgia congressman, provided a guarantee on a $2.3 million loan that his daughter and son-in-law – Carrie and Clint Wilder – took out for their sporting goods retail business, Wilder Outdoors. When that business failed, they filed bankruptcy.

In the court filing for the Wilder bankruptcy case, Deal was not mentioned as a partner or a guarantor of the business loan. The attorney who acted as trustee in the Wilders’ Chapter 7 liquidation said that Deal should have been listed in the filed as the guarantor for the loan, potentially making him liable for additional debts of the company.

Deal has said that he was merely an investor in Wilder Outdoors, but several bankruptcy attorneys commenting for an Associated Press article said that they believe Deal should have been listed as a co-debtor.

The case was ordered reopened after it was discovered that Clint Wilder had a November 2001 bankruptcy, making him ineligible to have new debt discharged through bankruptcy. The eight-year time limit between bankruptcy filings had not elapsed when the new bankruptcy case was filed in July 2009.

A South Florida GMAC Mortgage foreclosure specialist admitted in a sworn deposition that he did not verify the foreclosure documents he signed – nearly 10,000 each month – which has led GMAC to suspend sales of foreclosed homes and evictions temporarily as it reviews its procedures for note ownership verification.

In Florida and other states that have judicial foreclosure laws, lenders must provide documentation verifying that they own the mortgage note on the property being foreclosed upon. Jeffrey Stephan, foreclosure specialist with GMAC Mortgage, admitted that he signed Florida foreclosure affidavits without personally verifying that GMAC did own the mortgage note. He said he did not know what was in each file other than the homeowner’s name, that he had not inspected the contents as he should have, and that the notary who was supposed to witness his signatures was not there when he signed the affidavits.

Florida foreclosure defense attorneys say that the Florida judicial foreclosure process is being short-circuited by lenders’ flawed verification processes. Earlier this year, Pinellas County Judge Anthony Rondolino vacated a summary judgment he had granted in January in favor of GMAC Mortgage after a foreclosure defense lawyer challenged the documentation.

GMAC Mortgage said that its review of its procedures may take a few weeks or until the end of the year, and that the delay will not affect newly defaulted loans. The company did not know how many homeowners might be affected.

President Barack Obama said he will not sign the Interstate of Notarizations Act because it can make it more difficult for homeowners to challenge their foreclosures.

The White House announced that the president was sending the bill back to the House of Representatives for more discussion about how the legislation would affect the foreclosure crisis because of concerns about both the intended and unintended consequences the bill may have on consumer protections.

The bill, which the White House said would have shielded bank and mortgage processors from liability if foreclosure documents were improperly prepared, originally passed the House in April and passed the Senate with no public debate in early October. It would require state courts to accept all out-of-state notarizations as valid, including those stamped by computer – a practice that some say has been used to expedite foreclosure orders improperly.

Three major lenders have recently announced a moratorium on foreclosures due to improperly prepared documentation. Florida’s Attorney General is currently investigating four “foreclosure mill” law firms for impropriety, and a number of states’ attorneys general have filed suit to halt all foreclosures in their states until the documentation mess is straightened out.

In addition, the U.S. Justice Department announced that it was opening an investigation into whether the nation’s leading mortgage lenders improperly evicted borrowers from their homes.

Omni Hotels & Resorts was the successful bidder in the Chapter 11 auction of the Amelia Island Plantation just north of Jacksonville, and the hotel and resort operator says it plans to expand the facility.

According to a Wall Street Journal story, Omni said it would add 125 hotel rooms and another 15,000 square feet of meeting space. Omni has 45 hotels in North America, and is owned by TRT Holdings, a company owned by Texas billionaire Robert Rowling.

The 1,350-acre Amelia Island Plantation includes the Amelia Inn report, four golf courses, spa, beach club and villas. It was purchased in 1978 by investor Richard Cooper and was still under the management of his son, Richard, when the economic recession caused it to run into financial difficulties. Amelia Island Plantation filed for Chapter 11 bankruptcy protection last November.

Omni’s $67.1 million bid was better than offers made by Starwood Capital and Noble Investment Group, the other bidders. U.S. Bankruptcy Judge Paul Glenn in Jacksonville is scheduled to rule on the acceptance of the Omni offer, which will be an approximate 70 percent recovery for creditors.

Contact our Jacksonville, Florida bankruptcy law firm for more information about the Florida Chapter 11 bankruptcy process.

According to the Mortgage Bankers Association, the number of seriously delinquent loans – including those in foreclosure – fell by the largest amount since the housing crisis began in 2006.

For the second quarter of 2010, seriously delinquent loans – those more than 90 days in arrears – fell to 9.1 percent, a .4 percent drop from the previous quarter.

Analysts credited the improvement to the now-expired federal tax credit on new home purchases and an increase in the number of mortgage modifications that lenders were able to extend to troubled borrowers, helping them avoid foreclosure.

However, analysts said that the number of newly delinquent homeowners increased somewhat during the second quarter, which could reverse recent improvements if the trend continues. The percentage of loans one payment behind was at 3.5 percent at the end of the second quarter, up from 3.3 percent at the end of 2009. According to the MBA, new delinquencies are tied to first-time claims for unemployment, which also rose in the second quarter.

Florida had the highest rate of loans in foreclosure at 14 percent, followed by Nevada with just over 10 percent, New Jersey with 6.3 percent and Illinois with six percent.

If you are a Florida homeowner who wants to avoid foreclosure, contact our Jacksonville Florida foreclosure defense law firm.

JPMorgan Chase has announced that it has offered over 900,000 mortgage modifications to delinquent borrowers since the beginning of 2009, and that 23 percent of those modifications resulted in a permanent change to the borrower’s mortgage.

Chase said that it offered over 263,000 modifications through the Home Affordable Modification Program (HAMP), of which 73,000 were approved and 58,500 of those approved resulted in a permanent modification to the homeowner’s mortgage.

The bank said that its own mortgage modification programs were offered to almost 347,000 homeowners, of which more than one-third were approved for a permanent modification. Chase also offered more than 304,000 modifications through Fannie Mae and Freddie Mac, but only 20 percent were approved through these programs and just 15 percent received a permanent modification.

Chase says that it has added more than 8,000 loan counselors over the past 18 months, and has counseled over 140,000 delinquent borrowers. It has 11 Homeownership Centers throughout Florida that are focused exclusively on helping homeowners avoid foreclosure. For a complete list, go here.

If you are a Florida homeowner who wants to avoid foreclosure, contact our Jacksonville Florida foreclosure defense law firm.

The State Foreclosure Prevention Working Group (SFPWG), consisting of Attorneys General representatives from 12 states (including Florida), three bank regulators and the Conference of State Bank Supervisors, has released a report that shows the number of foreclosures since October 2007 has outpaced mortgage modifications by three to one.

The study examined delinquency and loss mitigation data from the largest subprime mortgage services in the nation, which showed that servicers completed 2.3 million foreclosures since October of 2007 and 760,000 mortgage loan modifications.

The study also showed that nearly 60 percent of homeowners who are more than two months’ behind on their mortgage payments have still not participated in any loss mitigation activity like loan modifications.

However, the study also said that the predicted wave of re-defaulters has not materialized, and that those borrowers who have received a mortgage modification are less likely than expected to default again.

For those receiving mortgage modifications during 2009, the data showed that 40-50 percent are less likely to be seriously delinquent with their payments six months after the modification. More recent modifications are performing better than earlier modifications, and those modifications that reduced the capital balance of the loan significantly have one of the lowest rates of default.

If you are underwater on your mortgage and want to avoid foreclosure, contact our Jacksonville Florida foreclosure defense law firm.

While sales of existing condos were up in July by 11 percent, prices for those units dropped 20 percent and results for single family homes were even worse: both sales and prices dropped by 14 percent and seven percent respectively, according to the National Association of Realtors.

In Jacksonville, July home sales were down five percent and prices down nine percent, from $156,800 in July 2009 to $143,400 in July 2010. By contrast, condo sales in Jacksonville rose 20 percent while the median sales price plummeted by almost 40 percent, from $119,500 in July 2009 to $73,100 in July 2010.

Experts say that the expiration of the homebuyer tax credit caused a double dip in Florida’s already perilous housing market, and that the market’s eventual recovery is dependent on improvement in the state’s labor market. As more jobs become available, home sales should increase and foreclosures should decrease.

According to a real estate tracking firm – CondoVultures – there have been over 100,000 properties in south Florida that have been repossessed since the foreclosure crisis began three years ago.

In addition, the Deepwater Horizon Gulf Oil Spill is estimated to have had some negative impact on Florida’s housing market, which will not be truly known for months or even years, some coastal real estate experts say.

If you are a Florida homeowner who wants to avoid foreclosure, contact our Jacksonville Florida foreclosure defense law firm.