Recently, a single mother lost her job in a central Florida town and was about to lose her house, too. But then she made a seemingly simple request of the bank: Show me the original mortgage paperwork. And just like that, the foreclosure proceedings came to a standstill. This homeowner, and others like her around the country, are managing to stave off foreclosure by employing a strategy that goes to the heart of the whole nationwide mess.
During the real estate frenzy of the past decade, mortgages were sold and resold, bundled into securities and peddled to investors. In many cases, the original note signed by the homeowner was lost, stored away in a distant warehouse or destroyed.
Persuading a judge to compel production of hard-to-find or nonexistent documents can, at the very least, delay foreclosure, buying the homeowner some time and turning up the pressure on the lender to renegotiate the mortgage.
In recent interviews with The Associated Press, lawyers, homeowners and advocates outlined the produce-the-note strategy. Exactly how many homeowners have employed it is unknown. Nor is it clear how successful it has been; some judges are more sympathetic than others. A Tampa lawyer, whose Consumer Warning Network Web site offers the free court documents this woman used to file her request, has played a major role in promoting the produce-the-note strategy.
Conversely, the deputy executive director of the American Securitization Forum, a group that represents banks, law firms and investors, dismissed the strategy as merely a stalling tactic. He said homeowners are “making lawyers jump through procedural hoops to delay what’s likely to be inevitable.” In his opinion, the original note is almost always electronically retained and can eventually be found.
Although Judges MAY be willing to accept electronic documentation; and, lenders are sometimes allowed to produce other paperwork to establish they are the holder of a loan, assembling such documents, to a judge’s satisfaction, takes time, which to homeowners is the point.
A University of Iowa study last year suggested that companies servicing mortgages are often negligent when it comes to producing the documentation to support foreclosure. In the study of more than 1,700 bankruptcy cases stemming from home foreclosures, the original note was missing more than 40 percent of the time, and other pieces of required documentation also were routinely left out.
The first big success of the produce-the-note movement came in 2007 when a federal judge in Cleveland threw out 14 foreclosures by Deutsche Bank National Trust Co. because the bank failed to produce the original notes.
Democratic Rep. Marcy Kaptur of Ohio endorsed the strategy in a fiery speech on the House floor during debate on the federal bank bailout last month. “Don’t leave your home,” she said. “Because you know what? When those companies say they have your mortgage, unless you have a lawyer that can put his or her finger on that mortgage, you don’t have that mortgage, and you are going to find they can’t find the paper up there on Wall Street.”
April Charney, head of foreclosure defense for Jacksonville Area Legal Aid in Florida, said the strategy has been so successful for her that she now travels around the country to train other lawyers in how to use it. She said she has gotten cases delayed for years by demanding that lenders produce paperwork they cannot find.
“This is an army of lawyers getting out there to stop foreclosures so we can get to the serious business of creating solutions,” Charney said. “Nothing good is going to happen as long as we continue to bleed homeowners.”
So, what about that central Floridian single mother's case? Well, she filed her "produce-the-note demand" last fall after the bank acknowledged that her original mortgage document had been lost or destroyed. Since then, there has been no activity on the foreclosure - no letters from the lender, and no court filings.
Labels: Business, Credit Partners, Fixing Credit; Bad Credit; Improving Credit Score, Florida, Florida Panhandle, Foreclosure, Investment, Panama City, Real Estate, Short Sale
Through the years, legislative bodies and professional organizations have tried to make it easier for Buyers and Sellers of residential properties to complete their transactions without the aid of attorneys. But more people these days are going to their closings accompanied by an attorney, or are at least having one review their sales and financing contracts in advance. And we agree!
Seems as though each and every day we hear horror stories of "sales gone bad" and the rising tide of foreclosures doesn't help one bit. It makes a lot more sense to seek a professional legal opinion BEFORE problems arise. It'll probably be the best $100 +/- you'll ever invest!
Suits occur after a sale ... before a sale in consummated ... when a contract is unfulfilled ... for specific performance ... just about anytime. With the aid of expert legal advice and, sometimes, the simplest addition of specific language, many problems are easily averted.
Many local REALTORS don’t like the idea of lawyers being involved in what should be a simple residential sale. With most firms not employing in-house counsel, they don't like shelling out the extra dollars from their commissions. But the laws are changing all the time, getting more complex, not less. And a legal review is a VERY good idea!
Labels: Business, Credit Partners, Deals, Finance, Fixing Credit; Bad Credit; Improving Credit Score, Florida, Florida Panhandle, Foreclosure, Investment, Panama City, Real Estate, Short Sale, Vacation
A move by the Florida Department of Health (DOH) to limit nitrogen seepage through septic systems could force some homeowners to install new and expensive septic systems. However questions remain, and one component worries Realtors: It calls for a septic inspection at the time of a home sale.
The DOH plans to present rule language for the Wekiva Study Area (WSA) to the Technical Review and Advisory Panel (TRAP) on Feb. 19 at the Orlando Airport Marriott. While the rule applies to the Wekiva area, it’s considered a possible blueprint for expansion statewide.
The Florida Legislature appropriated $1 million in 2007 for the DOH to begin a multi-year study on cost-effective nitrogen-reduction systems. However, the DOH has stepped up the timeframe to reduce nitrogen around Central Florida’s Wekiva River area based on an earlier law, the 2004 Wekiva Parkway and Protection Act. The DOH believes it must, by law, create rule language for nitrogen seepage as soon as possible around the Wekiva.
Septic tanks are a key component of the DOH plan. Passive systems currently used would be replaced by performance-based treatment systems that require electricity to operate, and the cost for a new system is projected by DOH to run from $3,000 to $10,000. The DOH plan would allow an exemption for any community being attached to a public sewer by 2012.
The upgraded septic system would apply to all new home construction and any system being modified or repaired. Importantly though, the DOH also wants septic tanks to be inspected for nitrogen levels as part of any home sale, which in many cases will trigger a mandatory replacement. The rule does not state who pays for a mandatory septic tank upgrade, making it part of the property contract negotiations. If necessary, DOH will give the new owner 18 months to complete the change, though a permit must be pulled prior to closing. In addition to adding an expected cost to some transactions, the rule could change the value of homes in the eyes of buyers, making listings on a public sewer line preferable to homes with septic tanks.
In January 2008, the Florida Association of Realtors® Board of Directors voted to support the continued use and installation of properly functioning standard conventional septic systems. It also moved to get the association more involved by appropriating money for a study that specifically looks for ways to reduce nitrogen using current systems, or in some other way that is cost efficient. The Board also voted to oppose any efforts to speed up state mandates for the higher-cost systems.
For more information, visit the DOH Web site at: http://www.myfloridaeh.com
Labels: Business, Florida, Florida Panhandle, Insurance;, Real Estate
