Van Nuys Artist Sees Work Soar in Value After LAPD Visit

by Les Christie / December 26, 2012

“Since the housing bubble burst in Florida five years ago, more than 400,000 borrowers have had their homes foreclosed on by their lenders. But for some, it’s payback time. Hundreds of homeowners and condo associations are foreclosing on banks that have failed to pay dues and other expenses on the properties they’ve repossessed. When banks foreclose on a home they become responsible for paying fees to the homeowners association — both any unpaid fees going back as far as 12 months and all expenses going forward. In many cases, however, banks are failing to pay, leaving these associations short on cash, according to Miami-based attorney Ben Solomon. But now, homeowners groups are putting liens on the properties until banks pay up and foreclosing on them if they don’t. So far, Solomon’s firm has filed more than 1,100 liens against banks on behalf of homeowners and has pursued 131 foreclosures. In more than 90% of the cases, he said, the banks settle by paying the bills.

The banks’ failure to pay dues has consequences. Other homeowners have to make up the difference, or the homeowners associations may lack the money they need for things like routine maintenance, security, water and garbage collection. Don Gonzales owns a townhouse in a condo community on a golf course in Homestead, Fla., where Solomon recently filed suit to foreclose on JPMorgan Chase (JPM, Fortune 500) to recover $20,000 it owed on more than two years of dues and common charges. “I own two properties and it really ticks me off when the banks don’t pay their fair share,” he said. “Everybody else has to make it up.” Because of the shortfall, the condo association had to cut down on security and postpone maintenance. “We haven’t had our blacktop resurfaced for years: It looks terrible,” he said. “We have palm trees where we used to have the coconuts taken off. It’s a safety issue, but we can’t do that now.” Related: There’s a home price recovery but it’s really, really slow Chase would not comment on this specific case but did confirm that it is responsible for paying all dues or fees on properties it owns after foreclosure.

The Southbridge Homeowners Association in Pembroke Pines, Fla., is owed about $1 million by several owners, many of them banks that took possession after foreclosures, according to Marc Lebron, the association’s treasurer. To make up for delinquent payers, Southbridge has had to hike maintenance fees to $260 from $145. But it’s also trying to get what’s due. The association filed for foreclosure against Deutsche Bank (DB) last spring after the bank failed to pay fees for more than two and a half years on a home it owned since September 2009. Deutsche and other banks claim that they are just trustees of the property and that the mortgage company servicing the account is responsible for paying the fees. That could be the case if the mortgage servicer held the property’s title after the foreclosure, said Michael Gelfand, an attorney who has instructed the Florida Bar Association on the rights of homeowners associations and banks in these cases. The title holder is responsible for the fees, he said. Typically, however, after banks foreclose on a property they are almost always the official holder of the mortgage, said Solomon.

As in a vast majority of the cases Solomon has filed so far, Deutsche Bank settled. After the foreclosure paperwork was filed, the bank agreed to pay the back dues of $25,513. Only in very rare cases do homeowners associations end up pushing the foreclosure all the way through to the auction sale of the properties. This has happened only once for Solomon. In early November, Keys Gate Community Association in Homestead, Fla., brought a foreclosure on a property owned by mortgage servicer, NovaStar, which owed $22,890 in back dues and fees. In mid-November, the association foreclosed on NovaStar and the home was sold at auction to a third party for $62,000, fully paying off the debts to the association. Novastar did not respond to a request for comment.”

Tables turned: Bank pays up in mistaken foreclosure case
by Steven Beardsley / June 3, 2011

“Warren and Maureen Nyerges know how difficult it can be to get Bank of America’s attention. When the lending giant mistakenly attempted to foreclose on the couple’s cash-purchased Golden Gate Estates home in 2010, they spent weeks on the phone and in court before the case was dismissed. A judge ordered the bank to pay $2,500 in attorney fees for the couple’s troubles. Yet after five months and even more phone calls, neither the bank nor its local counsel had paid. Friday morning, the couple opted for a different tactic. Media in tow, their attorney arrived outside a Davis Boulevard branch of the bank with deputies, a moving company and the court’s permission to seize branch assets. “I’m either leaving the building with a whole bunch of furniture, or a check or cash or something,” the attorney, Todd Allen, vowed.

It was a scene that turned the foreclosure crisis on its head, if briefly. Collier County sheriff’s deputies entered the bank shortly after 9 a.m., located the bank manager and presented him with a court writ and a familiar choice: Pay the money or prepare to lose possessions. The Daily News first reported on the Nyergeses in 2010, after Bank of America filed a foreclosure complaint against the pair. The lawsuit came as a surprise. Not only had the couple never defaulted, they had no mortgage to default on, having paid cash for the 2009 purchase of a single-story, 2,700-square-foot home owned by the bank. For nearly two months, Warren Nyerges, 46, a former sheriff’s deputy in Ohio, fought the lawsuit on the phones and in a Collier County courtroom. He worked with a local branch to clear up the misunderstanding, and he filed a motion to dismiss the case and a motion for fees. Bank of America voluntarily dropped the suit in April, and a judge granted the motion for fees in December. Some five months and repeated phone calls later, neither Bank of America nor its local counsel, the David J. Stern law firm, had paid the judgment or responded to Nyerges. “I talked to branch managers, I called anyone who would listen to me,” Nyerges said during a Thursday interview. “And I wrote a certified letter to the president (of the bank). No response, nothing.”

Notably, the Stern firm faced a crisis of its own around the same the time, as the state Attorney General’s Office opened an inquiry into the office’s foreclosure practices. The firm has since worked to withdraw from its cases across the state, including the Nyerges case. In January, the couple hired Allen, a foreclosure defense attorney. When Allen’s attempts to have the judgment paid also failed to produce a response, the attorney sent letters to Bank of America’s general counsel, warning he would pursue a levy. With no response, Allen obtained a writ of execution from the court — permission to seize assets to satisfy a judgment — and he forwarded it to the Sheriff’s Office. Warren Nyerges paid a $10,000 bond, and the agency hired a moving company. A Sheriff’s Office spokeswoman said the agency typically gives a debtor an hour to pay, after which deputies will begin taking possessions. Friday, the bank manager called supervisors to check paperwork and clear permission to cut a check, Allen said. An impatient Allen remained outside with Mauren Nyerges, who watched with friends from a distance. Her husband was out of town. Shortly after 10 a.m., the movers drove away from the parking lot. Allen entered the bank, was told that a check had been cut to deputies and watched as officers exited the bank soon after.

He wasn’t immediately told the amount of the check, but an agency spokeswoman later said it was for $5,772.88. Of the total, $685 is slated for Sheriff’s Office fees, including the movers. The purpose of the amount remaining after the judgment, some $2,587.88, was not immediately clear. A Bank of America spokeswoman apologized to the couple in a statement emailed after the event, and she seemed to indicate the problem lay with the Stern firm, which formally withdrew from the case last week. “We apologize to Mr. Nyegres that there was a delay in receiving the funds,” Christina Beyer wrote. “The original request went to an outside attorney who is no longer in business.” Allen said that after leaving the bank on Friday, he was contacted by the bank’s new counsel, Florida Default Law Group. The case isn’t over, Allen indicated. He said he’ll seek for the bank to cover his own attorney fees. “If Bank of America doesn’t pay it, we’ll be back doing this again,” he said.”

Produce the Note: Foreclosure Delay Tactic Can Encourage Lenders to Negotiate

“Homeowners facing foreclosure are receiving a simple piece of advice to help stall foreclosure: make the other side “produce the note.” As it turns out, many lenders seeking to foreclose seem to have lost track of the original promissory notes for the mortgages in question. Though by no means a long term solution, forcing the lender to produce the note can delay foreclosure proceedings and give the lender increased incentive to negotiate. While securitized bundles of toxic mortgages have been blamed for much of our current economic malaise, there is one bright spot they offer to some homeowners facing foreclosure. When their original lender sold off their mortgage, and it got packaged, sliced and diced into securities sold all over the world, many times the original promissory note got lost in the shuffle. Along with others, the Consumer Warning Network is actively pushing the “produce the note” strategy as an effective means of delaying foreclosure and creating additional incentive for lenders to renegotiate payment terms.

As described in Consumer Warning Network’s How-To, the strategy works as follows:

  1. After you receive notice of a foreclosure suit from a lender who claims to own your mortgage, you file a request, with the court, for production of the original promissory note.
  2. If the lender does not respond in 30 days, you file a motion to compel production of the note. This is a request that the judge order the other side to produce the note.
  3. Most often there will then be a hearing where the judge will decide whether to force them to produce the note or not. Should you win, the lender can’t foreclose until they produce the note (which could prove very difficult for them). Should you lose, you would still have had the extra time in the home and perhaps the opportunity to negotiate with the lender.

Consumer Warning Network’s How-To includes free forms for requesting production of the promissory note, and also for filing a motion to compel. The group warns against scams offering “produce the note” forms for a fee.

Consumer Warning Network cites an increased tendency in judges to hold lenders to the letter of the law in the surging number of foreclosure cases, including the New York Times report of an Ohio federal judge who threw out 14 cases in 2007 when investors trying to foreclose could not prove ownership. April Charney, head of foreclosure defense for the Jacksonville, Florida Area Legal Aid also uses and strongly advocates the “produce the note” strategy. As reported in the Florida Union Times, she says that for some of her clients, it has put foreclosure on hold for years.”

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