The Truth About Home Loan Modifications And Is It Right For You?

Like going into a car dealership, many times the first question you hear is “what do you want your monthly payment to be?”.  Anyone that understands finance knows such is not the right question when it concerns your wallet.  The real question is “how much do you want to pay for the home?”.   In other words, after all the interest and after making all the monthly payments how much did you finally pay?  That is the real question and what you need to ask your self when considering a loan modification.

 For example, let’s say you are not current on your mortgage because you like many other Americans have fell upon hard economic times and that you owe $300,000 on your mortgage and the property is currently worth $100,000.  Does it make sense to modify you home mortgage with a loan modification? – Probably not.   You are most likely not going to get a principal reduction or an interest reduction.   There are many attorneys or so-called loan modification companies [now not allowed unless operated by an attorney] that claim they will get you principal reductions or interest reductions but the chances of accomplishing this is very slim.  We like to think of it like a lottery ticket – while it could happen, your chances are slim.  Banks are not in the business of giving things away.  We advise our clients with the truth to attempt to save you money.  Now in some cases a loan modification on your home might be the perfect solution.  Everyone’s case is different.  If you are a senior citizen maybe the monthly payment being lowered is all you truly care about and such is understandable.  Or, in some cases if your home is worth more than what you owe where you have equity, a loan modification makes sense.  In the first example above, most should not consider a loan modification. 

Foreclosure Tips

Dear Homeowner/Client:

It’s no secret that the economy has hit every household directly. Incomes are not keeping pace with market costs, mortgage loans continue to accelerate, while property values decrease dramatically. The Federal government did fix the banks’ pending mortgage crisis; however, many people nationwide are up in arms not knowing where to turn for the “homeowners’ bailout.” Daily we get numerous calls and e-mails from clients, asking…”just how do we participate in the mortgage crisis bailout?” Sadly, that was not part of the bailout that was designed to keep the banks stable due to the large number of defaulted mortgage loans.

The only available solution to fixing the mortgage loan problem is attacking each issue and problem one household at a time. There has not yet been created a Congressional plan, and there is no current blanket program, that covers every household. Each problem must be resolved individually, and repaired on a per case basis.

What the Federal Treasury has created as of March 2009, now popularly known as the “Obama Plan,” is a means for responsible homeowners to get some relief on their mortgage loans. Katz & Associates Law Firm has handled several cures under the “Obama Plan” and to date many homeowners are able to see light again. Not every homeowner qualifies. Of the 13-million homes needing loan modification, less than 500,000 have been helped thus far. The reason for the low number in just five months, too many homeowners attempted their own adjustments or sought help from unlicensed and under-qualified loan modification services. Only an attorney can get mortgage rates and terms re-qualified legally and properly. For this purpose alone, banks prefer to deal with the attorneys to lessen the banks’ own liability. Without legal representation, many do-it-yourselfers are immediately denied/turned-down by banks, so not to create banker liability.

Katz & Associates is part of a handful of attorneys in a national program (Default Mortgage Modification, “DMM”) endorsed by the U.S. Treasury’s U.S. Trustee’s Office, and Federal District Court, to work directly with the Nation’s mortgage lender’s top level legal departments and management departments to expedite the slow process of mortgage loan modification. Due to the electronic processing methods utilized in DMM, this has dramatically brought down the costs of legal representation to now make it affordable to all homeowners, to legally aid in curing the individual mortgage problems of many homeowners. Update: In addition to the current popular “Obama Plan” and still widely utilized “Bush 7/2008 Hope for Homeowners”, there are several State programs that are being put into effect ot help homeowners, such as yourself, to keep their homes. The Bar Association Fund (contributed funds from member attorneys) also have some relief and aid programs put into effect that can be tapped into as a valuable resouce to assist many homeowners on a local basis. Legal Aid Society is another valuable resource. Katz & Associates utilizes each and every resource as a benefit to assisting our clients. Contact Katz & Associates for a Free Consultation.

Contact Katz & Associates by reply email to: in order to have your own mortgage loan situation evaluated for representation for modification.


Katz & Associates, PLLC


Short Sales


Many clients ask about Short Sale. A Short Sale takes place when your mortgage loan lender pre-approves and qualifies the homeowner (Seller) and the property for a discounted sale. The lender is taking a write down from the original loan or outstanding loan balance to a much lower sale price. It is very important for Clients to be aware that a borrower cannot randomly decide to sell their property, unless the rigorous legal approval process is first approved by your lender. Without that approval process, the sale and transfer may not be legal, as in almost all states. We deal directly with the legal department of the lender source and their supervisory management levels, not with the collection departments. If you want to consider Short Sale, please contact us for a free evaluation and free consultation to understand the qualification process clearly.

Another issue in regard to Short Sale is the tax liability. For almost all Sellers under Short Sale, there is no tax liability. Prior to the end of the Bush Administration, July 2008, the taxation of the bank’s loss in the write down was charged to the Seller. Since 2008 the Federal Taxation is now a non-event in almost all cases; however, some states do have different taxation policies. A Short Seller should always verify their particular taxation exposure.

Other important legal details regarding Short Sale may include further exposure to direct liability in the form of Mortgage Insuror exposure. Unless an attorney reviews, for your own behalf, all required releases in regard to the Short Sale, the Seller may be exposed to a future liability and expense that can lead to a future judgment and lien on other assets.

Katz & Associates is well-versed in all areas of real estate, banking and finance, and stop foreclosure. Call or e-mail our law firm for a free consultation if you are considering Short Sale.

Contact Katz & Associates by reply email to: in order to have your own mortgage loan situation evaluated for representation for modification.

Katz & Associates, PLLC

Short Pay – another option to save your home.




There are many attorneys in South Florida helping lots of people today with defense of foreclosures and attempting loan modifications. There are lots of newsworthy articles in the press and on the TV news about the woes in our national economy related to the mortgage crisis and foreclosure. But very few attorneys and very few news stories seem to deliver what homeowners want to learn and need to know – How to cure the problem of being upside down or underwater on your mortgage? If the news anchors would stop looking for sensationalism in the foreclosure crisis and instead give more insight to curing the problem, then just maybe this negative economy can turn itself around again. Another issue is that the banks really have no incentive to help the consumer. So, as attorneys we must take the helm for each client and guide them into safe waters.

When was the last time you heard from an attorney or even a news anchor’s story that an underwater homeowner mired in mortgage debt with a devalued home property could be helped and the mortgage could be re-evaluated under a refinance? No one talks about it, and very few attorneys, even those of late who are doing foreclosure defense and loan medication know anything about it.

Here’s the scenario. You bought your home or refinanced your home in the past ten years based on the artificial inflated real estate values that hit us in South Florida since 2002. Today that home you bought or refinanced is worth maybe 35% to 50% of what the estimated values were in 2002 or since. Every month, like clockwork, you pay your mortgage, even though you know you are paying for something that is worth far less in value. Your neighbor down the street stopped paying his/her mortgage and went into foreclosure because the bank told them if they continue to be a current paying bank customer they do not qualify for a loan modification. STOP!! If you don’t pay your mortgage your credit could be ruined for years. STOP!! If you do not pay your mortgage the bank could sue you and ultimately could foreclose on the property. Of course there are ways of defending such foreclosure lawsuit against you – to be discussed in later blogs. FACT: True, the bank cannot and will not even consider you for modification unless you stop paying your mortgage and only after 90 to 120 days could you then possibly qualify to be considered for modification and then what happens? The bank usually does not properly process your request. You, on the other hand continue to pay your mortgage on time and what can you do to get your mortgage modified? Who will help you? The bank won’t, they want your timely monthly payments, so why would they want to give you any help to lower your mortgage payments? They won’t. WE MAY BE ABLE TO HELP YOU (if you qualify).

As defense counsel to foreclosure issues we are very much aware as a law firm as to where the market is and where it should be. Right now the new Congress is considering revamping the National plan to shore-up the major deficiency that bank management has today that is totally a negative impact on all financial markets, and especially here in South Florida. The negative issues are the a) warehousing of repossessed foreclosed homes called REOs (Real Estate Owned Properties) by major mortgage lenders; b) no incentives for the lender banks because of the misguided TARP bailouts that still exist; c) lack of respect by most mortgage lenders who will not accept the true blame for the inflation in the market caused by the same bankers with prior very bad lending practices who now levy blame on their borrowers.

Most borrowers, and thank goodness for that, are very responsible homeowners and some have been hurt financially with the artificial inflation over the prior 7-years when prices topped $1-million on properties that were only worth $375,000 to begin with. Now, the market has receded and the buzz word is “Short Sale.” So what is a SHORT PAY???

At KATZ & ASSOCIATES LAW FIRM, we firmly believe that the new and upcoming buzz word in 2011 will be the Short Pay. Short Pay basically is a refinance at a realistic value by a new lender to take over the existing lender’s loan position at a discount of the grossed-up mortgage. The same day when you originally Closed on your loan, or refinancing, that loan and mortgage was immediately sold by the lender bank to investors and now the lenders are actually loan servicers in most cases. The investors want the value in “current money,” not “future money.” That economically makes sense to an investor with actuality when we do a “Short Pay”. We create an incentive to discount the loan in order to have it bought out at current value where the investors are paid now, instead of the future when there may be a total loss to the investor.

What is a Short Pay?
A Short-Pay, or also known as a short-refinance, is a transaction, where a current lender agrees to accept less than the full amount owed to them. This process is similar to a short sale but instead of selling the home to a third party, the homeowner keeps their home by refinancing with a new lender with a new loan based on the current market value of the home. The Short Pay allows the homeowner to keep their home and avoids a foreclosure or possible bankruptcy.

Why a Short Pay?
Homeowners that want to keep their homes, but don’t have sufficient equity to refinance their loan through conventional methods, should use the Short Pay option as a tool. The lender considering the Short Pay would have to be willing to accept a short payoff on the existing loan or hold a second mortgage to make up the difference needed to payoff the existing mortgage at the home’s current value, and the homeowner must qualify for the new loan.

Who may be able to use a Short Pay as another method to avoid foreclosure?
Homeowners that are experiencing financial challenges where a default on their loan obligations may be imminent, are “upside down” on their homes (meaning they owe their lenders more than their homes are worth), have not been late on their mortgage payments and otherwise qualify for an FHA loan refinance (maximum loan amount for Broward, Palm Beach and Miami-Dade Counties is $345,000 since the Rules revision of January 1, 2009) based on the current market value of their homes, should contact us immediately to determine if a Short Pay is a viable solution.


Katz & Associates, PLLC

Foreclosure, Foreclosure…Read all about it.


If you read our local newspapers or even if you watch TV you are then bombarded with news report snippets of information about the housing markets, real estate, and foreclosure activity. There was a time when real estate drove the U.S. economy upward, now it drains our lives! The latest “gossip” on the street, as gathered by the media, has confused many people! Some reporters go the extra mile and actually speak directly to local attorneys to get the heartbeat and/or pulse of the market. An example of poor unverified reporting: Recently a local popular TV news anchor reported, “Foreclosures are down dramatically because Florida banks are no longer foreclosing local homes.” That information was wrong, misleading and incomplete with unverified facts.

FACT IS: It was true the five major mortgage-servicing banks called for a 60-day moratorium in November so they could review their case files for re-submission to the courts. It was alleged by several states’ Attorneys General, including here in Florida, that some local foreclosure bank attorneys were rushing to get as many foreclosures filed as possible to spike-up their law firm incomes by submitting incomplete or false complaints in record numbers of foreclosures. True, there was a moratorium called but only to allow the same bank foreclosure attorneys to correct their files so they can re-file the foreclosure cases and file new cases as soon as possible – as of the first of the year. (This correction process is called; an Amended Complaint, or Amended Petition).

We can anticipate that during this lag time when foreclosures dropped an artificially low 21% in November 2010 that starting as early in 2011 first quarter we will be witness to a flood of foreclosure activity.

Please do not fall into the trap-thinking that your bank will stop foreclosing as you have been wrongly misled in newspapers and TV reports. That is not true in any sense of fact. FACT IS: The banks that had scheduled foreclosures in late 2010 will now be forced by the bank’s investors or owners of the credit instruments to quickly commence to foreclose on all delinquent mortgages that are more than 90 to 120 days late in monthly mortgage payments. Now that the court has had time to re-evaluate many cases, we anticipate that the faulty paperwork that was previously submitted by overly aggressive banks’ attorneys will be corrected and the courts will start to accept amended filings on all former cases that were filed before November 2010 and all new filed foreclosure cases will be corrected to current courts standards.

“Fallout from the foreclosure robo-signing controversy forced lenders and servicers to hit the pause button on many foreclosures while they scrambled to revamp their internal procedures and re-file or resubmit questionable paperwork.” Said James Saccacio, the CEO of RealtyTrac (an independent agency, tracking recorded foreclosures nationally).
A new report from Moody’s (the Wall Street bank rating service) said that this past year’s freeze on foreclosures will delay the time it takes to foreclose on a property by about three months. “We expect that foreclosure activity in December, will remain artificially low” (giving people a false sense of mistaken security). “Foreclosure rates will accelerate during the first quarter of 2011 as the lenders and servicers catch-up on these delayed proceedings.” Rick Sharga, Senior Vice President of RealtyTrac, said.

Bank repossessions, the actual final stage and step in the foreclosure process after a home fails to sell at auction rose, to a historic high 100,000 homes in September 2010. Anticipate much more in January and February and March 2011. In Florida, we have one home in every 262 households that are in foreclosure right now.

So what can Katz & Associates Law Firm do for you? We have always enjoyed a very favorable ability to defend foreclosure and obtain workouts for many qualified homeowners. Banks still, are not very cooperative to the consumer. Any individual who has tried on their own to get a loan modification finds out the loan modification adjustment is worse than what the bank had previously contracted and more costly as it adds costs to the back end where the home can never be sold in the foreseeable future! But there are new plans that go into effect in January 2011. New plans include Relief for Responsible Homeowners (“RRH”) who have never been late on a mortgage and now if they are underwater can get favorable refinancing of the debt by third party lenders. For homeowners that do not qualify under RRH favorable treatment programs, there are also programs through aggressive forms of private mediation. However under private mediation when a homeowner takes the initial steps and expense (costs under $750 to a private independent mediator) many times the bank will reimburse and agree to an experienced court or state approved private mediator who will actually create forensic accounting (not to be confused with forensic defense) needed for a bank to reassess the current market value of the home vs. the loan. Previously, these programs failed. Now banks must listen. They do not have the qualified bank staff or ability to provide in-house creative finance. Banks today are focusing on collections, not in unique creativity. That is why mediation on a private basis provides that creativity element the bank does not have time to create. If it makes sense and if the homeowner agrees to it and if the terms and conditions are mutually accepted by the bank, the mortgage can be revised accordingly for relief for the homeowner. In many of the successful private mediations where the homeowner paid for the initial costs to hire a mediator through an attorney, when a good result is obtained, the banks will normally reimburse costs to the homeowner.

Foreclosure is a legal process – one that requires a good guide. Never enter into any negotiation, contract, or purchase agreement or refinancing without advice of an attorney knowledgeable in these issues.

For a free consultation regarding your legal rights, or how you can repair your mortgage situation, or to safeguard against foreclosure and aggression by lenders, please contact Katz & Associates Law Firm at either of our two offices.


Katz & Associates, PLLC

The Truth about Foreclosure without the false security

Welcome to Katz & Associates, PL – Law Firm



The Truth about foreclosure without the false security.  Many people have a false sense of security when they think

believing that because the bank does not call, or the bank no longer stuffs demand letters in the mailbox weekly, that somehow the foreclosure processes has stopped.


WRONG: The Attorney General’s imposed order that all home loan lender banks present stronger cases for filing in each jurisdiction [making folks believe all foreclosures have stopped] will soon expire! The banks have had 90-days to re-organize their cases and get new legal counsel in some cases so they can come back even stronger in their demands, and actually speed-up the entire foreclosure process.


What does this mean for you? Banks will be able to get judgments on those cases that were not filed with responses and legally defended prior to the moratorium of November 19, 2010. At Katz & Associates Law Firm, we have already had three cases in the past two weeks of parties that came to us at the same time the sheriff was knocking on their doors to evict them. One was saved, one was not because he waited too long to get legal counsel. When the sheriff comes knocking to evict it is too late! When you get the notice of intent for foreclosure from a lender, that is exactly when you need to hire legal counsel, so at Katz & Associates we can determine your viable defenses and fight for your proper legal rights to keep your home. Of course everyone’s case is different but IN ALL CASES, the earlier you seek help the better chances you have of success.



Foreclosure Service

Abide by these very simple 5 basic rules of action >

1- If you are not paying your monthly mortgage when it is due and if you have gone more than 120-days, you can expect legal service of a court summons by your lender.2- If you are served, you will receive two (2) copies. One copy you must keep for your own records; the second copy you must send/bring to Katz & Associates Law Firm so we can review the case for you and determine what defenses you may have in your case to save your home.3- When we get a case early enough we can generally find defenses where the bank may have faulted in its preparation of the home loan closing documents and or contracts in order to force the bank to withdraw its action or better yet to get the lender to resolve the issue with you directly, that is called MEDIATION.

4- In some cases filed since February 2010 (one year ago) and up through 2011, we may be able to qualify you for a mediation hearing and obtain a court order to modify the loan with your lender. At mediation we attend with you and the bank has its attorney and we all sit before an impartial attorney authorized to mediate for the court. Mediation is done in an attorney’s office, not at the court. The mediator is not a judge and he or she will recommend to the court or advise the court the outcome of the negotiations at mediation when a settlement may be achieved. Everyone’s case is different; however, we have come out of mediation with some reasonable deals for clients who received large portions of the monthly mortgage payments reduced; the delinquency totally removed; the late fees totally removed; and/or all other assessments removed. Just recently in January 2011, we had a major bank agree to totally refinance the entire mortgage on a very expensive million dollar home! That is very rare, but we fight for those kind of opportunities for our clients and very proud and happy when it happens. We also had an entire case dismissed against another client because the bank had faulty documents.


5- IN FORECLOSURE DEFENSE: Provide your attorney with all things that can be used to make your defenses easier, such as paid receipts for property taxes and Homestead Exemptions, paid insurance payments, home owner association dues payments, taxes, pay stubs and checking account records. Any and all documents associated with your loan – such as the mortgage and note with need to be handed to your attorney. If you have already been served with foreclosure papers you will need to have that with you as well. All these important issues are essential to keeping a home in your ownership. You worked hard to get where you are – be proactive to protect your hard work.




Do not have that false sense of security, because shortly “there will be over 1,200,000 foreclosures as estimated as of January 10, 2011 by the FHA in 2011.” Don’t be one of those homeowners getting a knock on the front door because you waited too long to defend your property. Remember, the right of home ownership is an American value we all hold very near and dear! You need help to defend your right of home ownership. Even though you may be allowed to defend yourself in court, when you go against large banks and their attorneys, you are not fighting the fight with proper ammunition. You need an attorney in the court room fighting for your rights!


Katz & Associates, PLLC