On March 27, 2020, at the beginning of the pandemic, President Trump signed the Coronavirus Aid, Relief and Economic Security Act (CARES ACT), providing a $2 trillion dollar aid package designed to help the economy. This CARES aid package included $300 billion direct payments to families, an additional $600 a week in unemployment benefits for those who lost their job, $349 billion for low interest loans to small businesses and finally homeowners who have federally backed mortgages have the ability to request a forbearance which provides the ability of these mortgage holders to either pay their mortgages at a lower rate or temporarily pause your mortgage payments without penalties. In addition, the CARES Act also issued a moratorium on evictions of tenants. The last two, the forbearance and the eviction moratorium, are set to expire. This will lead to lenders (banks) taking action against delinquent mortgage borrowers.
Based on the current data being reviewed, the numbers of delinquent borrowers are reaching record levels and appear to be increasing weekly. Some of the cities which may be affected the most are Miami, New York, Las Vegas, Houston and Chicago – and, of course, Miami and the surrounding metro areas in South Florida such as Broward, Palm Beach, and Martin Counties will also be heavily impacted by the anticipated looming foreclosure crisis. Based on research conducted by the Center on Budget and Policy Priorities the research entity notes that although employment is picking up, millions of US workers are underpaid or still are searching for work, despite having record number of job openings and that one in 5 tenants with children are currently behind on their rent payments.
These expected waves of foreclosures that will impact homeowners throughout the United States – and in particular South Florida – will most likely be attributed to the results from lifting the forbearance and eviction moratorium restrictions but also maybe signs of a faltering economy which includes inflation.
Recently, under President Biden, our country’s inflation has climbed higher in June than expected, the fastest growth in 13 years and the consumer price index has risen 5.4%. The Whitehouse and certain economists expect the pressures now being seen on our economy to ease, as we slowly improve our economy from the coronavirus shutdowns, however we do not believe so and see an economic crisis on the horizon. With the rise in household goods such as food staples, gas and cars, the unexpected number of job openings not being fulfilled and the wave of foreclosures and evictions we are more worried than ever. Current planned spending by the Biden Administration does not help alleviate our concerns.
If the Biden Administration pushes through their $1.2 Trillion Dollar infrastructure bill and then their $3.5 trillion spending bill through reconciliation expect inflation to continue to grow, with higher consumer prices which will adversely affect your bottom line.
How will foreclosures impact you?
With expected significant levels of foreclosures, and the consumer prices index, which measure a basket of goods and services including energy and food costs, raising at such a pace what does it mean for the average consumer, our clients, and Floridians?
Used Car prices are on the rise, due to the coronavirus lockdowns and the stalled economy, chip makers were unable to keep up with demand and chips needed in new cars have not been delivered, due to a shortage of new cars being introduced to the market, used car prices are higher than ever before.
Airline fares are on the rise, due to higher energy costs and a pent-up demand to travel after the coronavirus lockdowns expect to see these fares continue to rise.
Energy prices, again with more and more people going back to work, summer vacation and pent-up travel demand, energy prices have risen faster than expected, less than a year ago gasoline used to be $1.20 and is now hovering over $3.00. Because Floridians generally travel on the roads and highways more often than other types of major cities with different public transportation, locals will certainly feel the gas price rises in their wallets.
Food prices, including a higher price for meat, is expected to continue to go up as increased demand meets a shortage in the food supply. This impacts the local consumer who shops at the neighborhood Publix or Aldis.
Housing prices are also on the rise, which raises the cost of home purchases and rents. While housing costs are one of the largest expenditures for the family these rising prices is not helping our economy recover. Specifically, in South Florida we are seeing an unprecedented increase in housing costs that do not appear to be slowing down. Of course, when the big banks, such as Bank of America, Chase, TD Bank, BB&T Bank, etc., begin to file foreclosure actions, in-mass, we expect a slight “dip” in the housing market. However, because there is still limited supply and record low mortgage rates, housing costs in Florida will most likely stay at the top of the national market for the long-term foreseeable future.
Some of the reasons for these rising costs are certainly associated with the reopening of our economy from the coronavirus pandemic, however we also have supply chain issues, labor shortages, wage, and benefit hikes to attract new employees has also been driving up these costs, which will be passed on to the consumer in higher costs of goods.
Although the Federal Reserve and Whitehouse believes these trends are temporary, the data suggests otherwise, especially if the Biden Administration follows through on their spending plans through reconciliation which will create higher taxes, more debit, higher wages, more regulatory hurdles and higher prices, it will also affect the supply chain and the job market. And, the expiration of the foreclosure forbearances and foreclosure moratoriums will also certainly impact Florida’s residents.
It is expected that Florida homeowners will be hit the hardest
Again, with the consumer price index climbing, some homeowners are behind on their mortgage payments and as this country starts to reopen from and the Foreclosure and eviction moratoriums end, expect homeowners behind on their mortgage payments to start putting their homes on the market. With more and more homes going up for sale, it will drive the price of the already artificially inflated homes currently on the market lower, thus with a larger inventory of homes for sale and lower costs it will be a buyers’ market, when this happens home prices will suffer, and foreclosures will expand. In addition, people who may have recently purchased homes will be faced with banks who will become more aggressive when it comes to collecting mortgage payments and not providing courtesies when it comes to mortgage delinquencies.
Do you need a Foreclosure Attorney?
If you find yourself in the unfortunate circumstances of facing a foreclosure, hiring a real estate litigation lawyer may be a good idea. A Florida foreclosure attorney can help you fight the impending banks attempts to take your home, especially if you have a valid defense and want to keep your residence. In fact, bank foreclosures will hit every property owner from single family homeowners, to condo owners, and people who own rental properties. It is critical that you do everything to protect your largest asset and, at a minimum speak with a qualified expert to discuss what rights you have against the banks should they file against you.
Common Defenses used in a Home Foreclosures
The service provider failed to follow proper foreclosure procedures: Because the foreclosure process typically ends up with a homeowner losing their home, the legal system takes this process extremely seriously. If the service provider, or the current lender does not follow state law or complies with the terms of the mortgage you may be able to stop a foreclosure. Usually they must meet certain loss mitigation requirements, follow federal servicing law, send proper breach letters to the owners, and follow state foreclosure procedures. When you have man foreclosures occurring at once, mistakes are bound to happen, which is why hiring a foreclosure attorney is important. In 2008 though 2010 we here in Florida saw that this was one of the most common defenses home owner’s were able to use to fend off the banks foreclosure process.
Active Military: If you are an active service member, you may have special protections against foreclosures as well as specific rights under the Service members Civil Relief Act which could be complex.
Questions surrounding the lender: The foreclosure party can not prove they own the loan and do they have the legal right to foreclosure. Mortgages are often bought and sold to various parties throughout the life of the mortgage making ownership confusing, although this defense is difficult to win, it is a strategy that can be used to in the foreclosure proceedings to stall the process for a period of time, however haring a Florida Foreclosure attorney is essential in these circumstance.
The Servicer made serious errors: They may have misapplied payments, charged unreasonable fees, or any other number of errors during the servicing of your mortgage, an experienced foreclosure attorney will help determine if there were servicing errors and if those errors would help fight the foreclosure process.
In fact, in some of these cases our lawyers were able to keep people in their homes for extended periods of time and also were able to assist our clients in renegotiating their mortgage loans and, in some cases, helping our clients keep their houses all together.
While each case the mortgage lender may bring is different an experienced foreclosure attorney will be able to help a homeowner determine what is the best strategy to stave off the foreclosure process. Call the Florida based legal experts at Shiner Law Group to help determine your next steps in protecting your home. In some cases, depending on the circumstances, we may also refer your case to another firm we work closely with to better ensure your case is resolved. Either way, we will work diligently and aggressively to always try and best protect our clients. Contact us today – in Palm Beach County 561-777-7700; in Martin or St. Lucie County 772-777-7700; or in Broward County at 954-999-9900 to talk to one of our experienced Florida real estate attorneys today.