Archive for May, 2011

Number of Underwater Mortgages in U.S. Jumps to 28 Percent

Monday, May 16th, 2011

 Posted in Financial News, Foreclosure, Mortgage Rates, Underwater Mortgages May 9, 2011

A new report from Zillow Inc. revealed on Sunday that the number of U.S. homeowners with underwater mortgages has increased to 28 percent. The increase occurred in the first quarter of 2011 as a result of the housing market experiencing massive drops in property values.

Home Prices Dropped 8.2 Percent

The report found that home prices dropped 8.2 percent over the past 12 months, marking a low not seen since 2008. In fact, it was reported last week that home prices had double dipped.

Last quarter, underwater mortgages were at 27 percent, but after home prices dropped 3 percent in the first quarter, more homeowners found their homes had fallen underwater, meaning they owed more on their mortgages than their homes were worth.

Values Expected to Drop Into 2012

Zillow predicts more homes will likely fall underwater as a result of continually decreasing home prices his year. The company said prices will probably fall 9 percent. In fact, prices are not expected to find their bottom until sometime in 2012.

One reason for the drop in home values is foreclosures, which are expected to continue for the remainder of the year. Also, unemployment and uncertainty in the economy is discouraging many prospective home buyers.

Some Cities Have Shockingly High Number of Underwater Mortgages

While the U.S. underwater mortgage percentage is high, some cities are in even worse circumstances. The following cities have the highest percentage of underwater mortgages in the country:

  • Las Vegas: 85 percent
  • Reno: 73 percent
  • Phoenix: 68 percent
  • Modesto: 60 percent
  • Tampa: 60 percent

However, despite all of the bad news, property values have increased slightly in three areas: Fort Myers, Florida gained 2.4 percent, Champaign-Urbana, Illinois rose 0.8 percent and Honolulu saw an increase of 0.3 percent.

Carolyn Secor is a Clearwater bankruptcy attorney and Clearwater foreclosure attorney serving Palm Harbor, New Port Richey, Oldsmar, Tarpon Springs, Seminole, St. Petersburg and the Tampa Bay area.

Jury Awards a GI $20 Million in Suit Over Mortgage

Tuesday, May 3rd, 2011

Article from Columbia Ledger Enquires/US Foreclosures Institute

March 22, 2011

A federal jury awarded a Fort Benning Soldier more than $20 million on Monday in a case against Coldwell Banker Mortgage — an amount the plaintiff’s attorney called necessary to get the company’s attention.

Jurors in the case of David Brash v. PHH Mortgage Corp., doing business as Coldwell Banker, deliberated for about six hours before ruling in Brash’s favor. During the six-day trial, jurors heard that Coldwell Banker improperly reported Brash, 29, to credit bureaus which led to a “serious delinquency” on his credit report, that it refused to answer his questions or correct his account and damaged him emotionally, physically and financially, his attorneys and court documents say.

“The jury was aggravated as to how he was treated,” said Charlie Gower, an attorney who represents Brash. “I think the jury was just very mad because they were attacking David Brash the Soldier and basically calling him a liar.”

According to Brash’s December 2009 complaint, the U.S. Army sergeant bought a North Columbus home in November 2007 and got his mortgage through Coldwell Banker. Brash set up automatic monthly payments because he was on active duty, and no problems occurred for almost 18 months.

That’s when Brash started getting numerous phone calls and letters about missing or making late payments. Brash tried several times through phone calls and letters to explain himself, and he was told a number of times that Coldwell Banker would correct the error, his suit states.

Jurors heard recordings of calls Brash made, recorded by PHH Mortgage, in which Brash would be on hold for 30 or 40 minutes at a time with overseas customer service representatives, said Gower and Teresa Thomas Abell, another attorney representing Brash

“The longest time was 55 minutes — listening to music or nothing,” Gower said.

In May 2009, Brash got a letter threatening to report his supposed delinquency to credit bureaus. Abell said her client was adamant that he not be reported, and the suit states Brash spoke with one representative for more than an hour about Coldwell Banker’s error.

The problems continued, and Brash hired Gower, who wrote a formal request to PHH Mortgage’s president asking for written confirmation that Brash’s account was current. Brash never received a response, Gower said, though adjustments were made to Brash’s account.

Brash kept getting notices alleging he failed to make his payments, and he hired Gower again who sent another written request. Gower said that the Real Estate Settlement Procedures Act restricts a mortgage company from reporting a customer during the 60-business day period when they must respond to such a written request.

In November 2009, Brash was reported as being “serious delinquent” to credit reporting agencies.

Gower says in a release that PHH Mortgage accused Brash at trial of improperly filling out forms. An attorney for the mortgage company couldn’t be reached late Monday afternoon.

Jurors awarded Brash $1 million in compensatory damages plus $575 for out-of-pocket expenses. They awarded Brash $350,000 for attorney fees. The $20 million award was in punitive damages, Gower said.”The evidence showed that PHH Mortgage serviced approximately 1 million mortgages valued at $163 billion,” Gower states in his release. “The jury verdict on punitive damages was necessary to get PHH Mortgage’s attention.”

Carolyn Secor is a Clearwater bankruptcy attorney and Clearwater foreclosure attorney serving Palm Harbor, New Port Richey, Oldsmar, Tarpon Springs, Seminole, St. Petersburg and the Tampa Bay area.

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