Bank Gives Up On Florida Foreclosure: Beginning Of A Trend?
April 11th, 2011
It sounds way too good to be true: a Florida man losing his Jacksonville house to foreclosure receives a letter in the mail from his lender telling him that even though he lost his foreclosure case over two years ago, the bank was literally walking away - and giving him the house[1]. Even more remarkable, the man in question had paid less than $1,000 toward the principal on his $72,000 loan. This surprising outcome appears to be the result of the “perfect storm” of lending issues in Florida right now. Not only are lenders hesitant to initiate foreclosure sales while the robo-signer fiasco is ironed out with attorneys general and the federal government, but David J. Stern Law Firm, the “poster child” for “foreclosure mills” not only is located in Florida, but was the representing attorney for the lender. Given that the law firm is currently refusing to turn over many foreclosure-related documents, judges are showing every inclination to rule in favor of foreclosed homeowners and Florida is swamped with foreclosures in all stages and statuses, the lender may just have given up[2].
Or, points out one foreclosure defense attorney, “one possibility is that they did it by mistake. There are just so many cases out there.” Given that the lender would be facing massive complications with high volumes of foreclosures already, it appears unlikely that it would have been worth pursuing the extremely underwater property anyway, theorizes another attorney, saying that likely pursuing the foreclosure was “simply not worth it.” Wells Fargo, a subsidiary of which held the loan, simply said that “the investor on the loan, the bondholder on the trust, decided to write off the loan balance because of the significant decreased value of the property.” The servicer itself is not talking.
What do you think about this decision to literally give the delinquent borrower the property? Could other lenders learn from this decision?
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[1] http://www.bradenton.com/2011/04/11/3102953_p2/bank-gives-man-foreclosed-house.html
[2] http://www.tampabay.com/news/courts/civil/collapse-of-david-j-stern-law-firm-throws-foreclosure-courts-into-disarray/1156011
April 12th, 2011 at 6:01 AM
I have watched from a far (Colorado) as I hear more and more about the drama that is the Flordia real estate market. Sounds like there are some really good deals to be had there and also a lot of murkey water to navigate. I must shake my head in wonder at some of the things occuring in Flordia.
April 12th, 2011 at 2:57 PM
I’ve already been hit with a 1099 for my 1st foreclosure ($126K shown as income-now I owe Uncle Sam) and am dreading what is going to happen with the other two I have. (Just don’t have it… They’ll be coming after my first-born)
Wouldn’t this be a gift from Heaven? My prayers will have been answered, because I don’t know what else I can do. Was thinking of folding up my tent and just riding off into the sunset.
April 12th, 2011 at 2:59 PM
Not surprising. The banks and attorneys did many crooked things. Shapiro and Fishman attorneys for Bank of American sent me a letter stating that the summary judgement hearing was cancelled. Then they went before the judge anyway and asked for a summary judgment without informing my attorney or myself.
The courts go after Barry Bonds for lying but do nothing with the bankers and lawyers.