Should Cities be able to Sue Banks for the Housing Crisis?

housing_crash_foreclosuresDuring the housing crisis of the mid-2000’s, cities across the country filled with foreclosed homes. These abandoned homes became symbols of dreams lost and easy targets for criminals. The housing crisis had a profound impact on our overall economy and in the financial lives of the individuals swept up in its wake. However, there was an unexpected victim in the housing crisis, that’s looking to hold banks accountable and recover losses of its own.

Cities throughout the United States, including Miami, Oakland, Providence and Los Angeles are filing lawsuits against banks claiming that they suffered as well during the housing crisis. These cities contend that lending practices that either denied credit to individuals in certain neighborhoods because of race, or targeted home buyers in minority neighborhoods with high interest loans, led to increased foreclosures. These foreclosures are said to represent loss tax revenues and property values for these cities while increasing the costs of keeping surrounding neighbors safe. The cities are also contending that these practices are in violation of the Fair Housing Act, which “prohibits housing discrimination on the basis of race, color, religion, sex, or national origin.” The act allows individuals to sue lenders if they feel they have been discriminated against or if they feel they have been negatively affected by unintentional discrimination.

Currently, the city of Miami has recently filed lawsuits against a number of banks including Bank of America, Citibank and Wells Fargo. However, the Eleventh Circuit Court has sent the cases back to the lower court, which dismissed the cases. Now, Miami and other cities have filed an amended complaint. The city of Oakland filed a similar suit to which a judge declined to dismiss the suit.

While the argument for the cities being compensated for damages related to the housing crisis lie in the notion that lenders engaged in practices that would ultimately lead to foreclosures, the banks have a different point of view. Banks, like Wells Fargo, feel not only that the Fair Housing Act was not meant to come to the aid of cities, but that high interest loans were meant to provide opportunities for home ownership that would not be present otherwise.

The lawsuits by the cities represent a bold attempt to hold lending institutions accountable for the housing crisis, a feat that’s been difficult to attain to this point. Individuals, especially those who have been adversely affected by the housing crisis, typically do not have the resources to compete with the nation’s largest banks. If it is determined that they are unable to file lawsuits, the job of holding banks accountable falls on the justice department, or individual consumers through the defense of individual foreclosures on their homes.

If you are facing foreclosure, it’s important to know that you have options and that help is available. The Tampa foreclosure attorneys at McIntyre Thanasides Bringgold Elliott Grimaldi & Guito, P.A. can establish a strategy for overcoming this difficult time. Contact them today at 844-511-4800.

Tampa Bankruptcy Attorneys Rich McIntyre and Jeff Hakanson Weigh in on Real Estate

Types of ForeclosureTampa bankruptcy attorneys Richard McIntyre and Jeff Hakanson recently worked on a real estate case involving a Tampa company called RE-170, who had declared bankruptcy to halt the foreclosure of almost 50 homes that it was renting out for thousands of dollars each.

While the company was once called “dishonest and incompetent,” the outcome could now be a new model for real estate investors.

Read the full story in the Tampa Bay Times to learn how all parties came to a resolution based on a legal theory that had never been attempted in the country before.

http://www.tampabay.com/news/business/realestate/once-called-dishonest-and-incompetent-could-tampa-company-be-a-model-for/2279154

How does a foreclosure affect taxes?

How does a foreclosure affect taxes?

shutterstock_313474802No one buys a home to foreclose on it. Foreclosure is one of the most difficult situations that individuals and families face. Homes are a part of us and when your home is foreclosed on, it feels as if that part of you is lost. Aside from the emotional part of foreclosure, there’s serious financial ramifications to be dealt with. And it’s not just credit damage or the loss of an asset. Foreclosing on a home can have tax implications as well.

A foreclosure is considered a debt cancellation. Debt cancellations are considered taxable according to the IRS. This is because it’s a reduction in the amount of money you typically owe. Many consider this a “phantom” income because the individual increased their taxable income without actually gaining additional funds.

So if the financial and emotional stress of a foreclosure is not enough. You may potentially pay m ore taxes as well. However, there are exceptions. According to the IRS, debt cancellation is not taxable if:

  • You file for bankruptcy as debts cancelled in this situation are not taxable
  • You are insolvent. If your total debts are more than the fair market value of your total assets than your canceled debts may not be taxable.
  • Your loan is a non-recourse loan. If the only alternative for the lender is to repossesses the property in the case of default. The debt cancellation may not be taxable.

It’s also important to consider that if you have a home equity line of credit or a second mortgage and you have a foreclosure that it is also considered taxable by the IRS.
Foreclosure is traumatic from a financial and emotional standpoint. The help of a knowledgeable and experienced Tampa foreclosure attorney can make all the difference in the world. Contact McIntyre Thanasides Bringgold Elliott Grimaldi & Guito, P.A today at 844-511-4800 for help with this process.

Tonya Pitts, Real Estate Attorney, Featured Guest on WSRQ Talk Radio

Our very own, Tonya W. Pitts, Esq. , of McIntyre Thanasides is going to be a featured guest on the Real Estate Unplugged with Kay Winefordner. They will be discussing debt collection and other real estate matters. Real Estate Unplugged is a feature show on WSRQ Talk radio. Tune in Saturday April 16th, at 2:00 pm to listen live.

Tampa Attorney Tonya Wilils Pitts
WSRQ

The 3 Types of Foreclosure

The Types of Foreclosure

Types of Foreclosure

When people hear the word “foreclosure” they may not realize that there are multiple types. Each type of foreclosure has its own set of procedures and tends to favor one side (lender or borrower) over the other. The three types of foreclosure are judicial, non-judicial and strict foreclosure. In this article, we will describe each one.

Judicial: The form of foreclosure that most people are familiar with, judicial foreclosure is the process in which a court orders the sale of a property in order to satisfy a mortgage. The lender files a lawsuit against the homeowner and a formal notification is made. The homeowner is given a set amount of time to pay their debt. If they do not pay it, the property is sold at an auction and the proceeds from the sale are used to pay off the mortgage and any lien holders. This process is long and doesn’t provide a particular advantage for either party. Judicial foreclosures costs the lender and prevents them from gaining revenue while the process takes place. For homeowners, being sued and having an official notice appear on your property can be demoralizing. Foreclosures, in general, also damages your credit tremendously. A great alternative to a judicial foreclose is a deed in lieu. With a deed in lieu, the homeowner formally returns the property to the lender. If the lender accepts the property, no legal action takes place and your credit record is not damaged.

Non-Judicial: If your mortgage has a power of sale clause or if you are in a state in which a deed of trust is used instead of a mortgage, the lender has to right to foreclose on property without the approval of a court. As with judicial foreclosure, a formal notification is made, but the window of time before a property is sold may be shorter. This process presents an advantage to lender because it takes less time and money to foreclose on a property. The borrower has less time to resolve their debt and potentially keep their home.

Strict Foreclosure: Strict foreclosures are less common than judicial and non-judicial foreclosures. In a strict foreclosure, the lender seeks a court order to seize property from a homeowner. Once approved, the homeowner is given a set period of time to resolve the debt. If they are unable to do so, the property returns to the lender who is free to do with it as they choose. While it’s not much of an advantage for the homeowner, at least they have a designated time to pay their debt before losing their home.

Foreclosure is an emotional and financially difficult process to endure. The smartest choice you can make is finding a foreclosure lawyer that understands the process and can help you make sound choices for your future. The foreclosure attorneys at McIntyre Thanasides Bringgold Elliott Grimaldi & Guito, P.A. provide a wealth of experience and an ability to look at your individual situation, provide sound analysis and determine a proper solution. Contact them today at 844-511-4800.

Rules for Foreclosure Amended by Florida Supreme Court

The Florida Supreme Court recently amended several of the Florida Rules of Civil Procedure relating to mortgage foreclosures. The amended and new rules with forms are in response to recent legislation regarding mortgage foreclosure actions. Chapter 2013-173, Laws of Florida, created a new section 702.015. This statutory provision sets forth new pleading requirements for mortgage foreclosure complaints and is intended to “expedite the foreclosure process by ensuring initial disclosure of plaintiff’s status and the facts supporting that status, thereby ensuring the availability of documents necessary to prosecution of the case.” Following this statutory change, Rule 1.110(b) has been modified to remove certain language specific to mortgage foreclosures, and Rule 1.115 has been created to address specific pleading requirements for mortgage foreclosures. The changes became effective December 11, 2014.

The new Rule 1.115 calls for more specific details to the complaint regarding the factual basis of which the plaintiff, or claimant, is entitled to with respect to enforcing the note. The claimant also must file a certification with the filing of the claim for relief for foreclosure to show the claimant is in possession of the original promissory note. If the claimant is seeking to enforce a lost, destroyed, or stolen instrument, the claimant is required to execute under penalty of perjury an affidavit setting forth a detailed chain of endorsements, transfers, or assignments of the note and providing the appropriate facts to show that the claimant is entitled to enforce such document.

In addition to speaking to your attorney, it is advised you read the amended and new rules and forms in their entirety.

Below are several highlights of the amendments:

  • Rule 1.110(b) – the verification language was removed from this rule and incorporated in new Rule 1.115
  • Rule 1.115 –a new rule created that provides initial pleading requirements in mortgage foreclosure cases (covers claims for relief, delegated claim for relief, possession of original promissory note, and lost, destroyed or stolen instrument)
  • Forms 1.944(a) and (b) – complaint forms that were revised in order to detail the plaintiffs’ standing. One new addition includes an “Affidavit of Compliance.”
  • Form 1.944(c) and (d) – the “Motion for Order to Show Cause” and “Order to Show Cause” forms were incorporated for compliance with section 702.10(1), Fla. Stat. (2013)
  • Form 1.996(a) – the “Final Judgment of Foreclosure” form was revised to add titles, update the statutory reference regarding time for right of redemption, and includes a new paragraph on attorneys’ fees
  • Form 1.996(b) – a new form entitled “Final Judgment of Foreclosure for Reestablishment of Lost Note” which is intended for use when a lost promissory note is re-established by a foreclosure judgment

These additions and revisions make significant changes to the rules and forms affecting foreclosures, and you will most certainly want to review them carefully if you are involved with foreclosure lawsuits. It is essential to work with a qualified foreclosure attorney throughout the process. Contact us today for a consultation and to review how the amendments can impact your current foreclosure situation.

Zombie Foreclosures Continue to Haunt Florida

One in five homes in the foreclosure process are zombies, according to RealtyTrac which says that Florida leads the list with roughly 55,000 homes that are abandoned by their owners and in a state of legal limbo.  Despite economic recovery in much of the nation, the foreclosure issue is not going away any time soon.  What do zombies mean if you are looking to list your property?  Most likely if there is one on your street, you will not be able to sell your home.  If you do, you’ll get much less than you were hoping for due to the proximity of the zombie foreclosure.  Zombie foreclosures not only lower property values of surrounding homes, but they also lead to lost property tax revenue – a double whammy for anyone considering listing a real estate property.

RealtyTrac’s most recent data on zombie foreclosures also reported that about 21 percent of the 141,406 total foreclosures reported in Q2 were of the zombie variety.  What makes a foreclosure a zombie?  This type of foreclosure occurs when a lender goes through all the steps of a foreclosure, but fails to complete the last step of registering the deed to move title from the borrower to the lender.  The owner then deserts the property leaving it abandoned which leads to an unkempt eyesore, making the surrounding properties less appealing.

One of the reasons that Florida is on the top of this list is because it is a judicial foreclosure state.  That means that in order to foreclose on a property a bank must go through the court process which takes a long time.   While new laws set out to protect borrowers and prevent servicers from reacting to foreclosures at the same rate they typically would, there are other ways service providers can provide assistance to borrowers while working directly with their business partners to prevent such a high vacancy rate.

Working with a qualified lawyer is the first step you should take if you are facing a foreclosure or currently involved in one.  A well informed homeowner can be counseled by a foreclosure attorney who can provide guidance in terms of what options are available to you and communicate with involved parties to find the best resolution and reduce the time period of the foreclosure sale right of redemption.  In some cases, this time period can be shortened from six months to as little as 30 days.

Servicers may also work directly with a lawyer who will contact the borrower.  For example, when a company has made an attempt to serve the borrower papers and finds the property to be vacant, they are often times legally required to search for the borrower.   This process will not eliminate zombie foreclosures, but does help expedite the foreclosure or proceed to workout.  By enlisting the help of an attorney from the start, you can be proactive and address the issue before vacancies increase and prevent zombie foreclosures from spreading.

If you find you are the victim of a zombie foreclosure, there may be a number of remedies available to you. Contact the Tampa foreclosure attorneys at McIntyre Thanasides Bringgold Elliott Grimaldi & Guito, P.A. today.