Over the past several months, a number of foreclosure mitigation scams have resulted in a significant setback on the dockets of several South Florida banks seeking to reclaim encumbered residential and commercial properties. Moreover, failure to follow proper legal protocol has afforded many borrowers the opportunity to restart efforts to reclaim control of their property – a maneuver many only dreamed of upon receiving that first foreclosure notice.
In June, 2015, a central Florida foreclosure law firm abruptly shut its doors, leaving its banking-clients scrambling to make it to hearings and continue the process against thousands of borrowers. In many cases, Florida courts dismissed the actions for failure to prosecute, as borrowers were the only litigants to show up to the hearing.
In another case decided in May, 2015, the federal Consumer Financial Protection Bureau ensured a “foreclosure mitigation” firm repaid over $11 million in illegal upfront fees paid by consumers eagerly seeking relief. Many of these borrowers were also offered a second chance to refinance or otherwise get back on track with their loans.
If you are facing foreclosure or believe it may be imminent, keep the following five “red flags” in mind, and be sure to contact a Ft. Lauderdale real estate lawyer right away:
Red Flag #5: Excessive Fees – If you are seeking credit counseling or foreclosure mitigation, be sure to work only with reputable and experienced entities. A legitimate foreclosure mitigation organization will not charge any upfront fees, and the Department of Housing and Urban Development can provide a list of reputable resources.
Red Flag #4: Lack of Communication – Many more irreputable mitigation and counseling firms will sell consumers with a rescue plan guaranteed to get them out of debt and back into their homes. Then, after borrowers advance an exorbitant fee (see #5 above), the counselors are nowhere to be found. As soon as you start to sense this disconnect, contact a real estate lawyer immediately.
Red Flag #3: Missing Paperwork – Under the Florida Fair Foreclosure Act, lenders and banks are required to produce the promissory note describing the liability awaiting the borrower in the event of default. Many times, lenders have difficulty meeting this basic requirement, as notes are sold and transferred to new banks almost yearly. If the bank cannot locate the note, it either must file an affidavit showing a clear chain of endorsements and assignments, or it must expend its own resources to locate the note from the proper financial institution.
Red Flag #2: Fast-tracking – As a borrower in Florida, there is a certain timeline lenders must follow before officially foreclosing on a property – and failure to follow that timeline could lead to a dismissal of the action or eventual liability in a wrongful disclosure lawsuit. Initially, the lender must wait at least 120 days from the last payment to begin the foreclosure process, as well as pursue the action through the state court system (known as a judicial foreclosure). If you are receiving notices after just one missed payment that a foreclosure is imminent, be sure to contact a real estate attorney as soon as possible.
Red Flag #1: No Notice – Borrowers are entitled to specific and timely notice about every aspect of the foreclosure procedure. Beginning with a notice of default, the lender must regularly update the borrower as to the amount that must be paid to bring the loan current. From there, the borrower must receive notice of all hearings and the date/time of the foreclosure auction. If proper notice protocol is not followed, the foreclosure could be stayed or dismissed.
Let One of Our Ft. Lauderdale Real Estate Attorneys Help
If you are facing a possible foreclosure of your home or business, don’t delay – call the Law Office of Michael L. Feinstein right away: (954) 767-9662.