By
Karen McVeigh in Miami
Years after the housing bubble burst, residents in the Sunshine State continue to face the heartbreak of home foreclosure
A foreclosure sign in front of a home in Florida. Photograph: Joe Raedle/Getty Images
At the county court in downtown Miami, a stooped, elderly man smartly dressed in a light suit jacket, stands in front of the judge's bench as he tries to cancel the imminent sale of his house.
"I spoke to the bank, they gave me papers" he said.
"You'll have to file notice and notice on the day is not enough," the judge replies. "I wish there was some way I could help, I'm sorry."
Asked later what will happen, the man shrugs. "I've lost the apartment. Which I gave $85,000 in cash for."
A woman, dressed in a tight-fitting skirt suit and heels, her make-up carefully applied, approaches the bench and talks to the judge in Spanish. Within minutes, her request for an extension has been denied. She turns around and walks briskly out of the courtroom, her eyes filling with tears.
Miami-Dade courthouse's Foreclosure Master Calendar is where homeowners caught in the middle of
Florida's housing crisis go to request emergency motions to cancel the bank's foreclosure sales of their homes. Some have attorneys, some represent themselves. Those with attorneys tend to fare better.
Florida enjoyed a massive housing boom before the crash, and is now one of the worst-hit by the foreclosure crisis. Out of the 4.5 million borrowers with outstanding mortgage loans, more than 2 million are "underwater", meaning they owe more than the value of their homes.
"People have no safety net. They get ill, a spouse dies, they lose their jobs and they have no support. All of these things can lead to foreclosure," said Carolina Lombardi, a senior lawyer with Legal Service of Greater Miami, a quasi-government service which represents low income families for free.
"We are seeing all kinds of people," she told the Guardian. "Middle earners who are now on food stamps. The housing bubble is a great equaliser."
David Chandler Hicks, of Alliance Legal Group, which operates all over the state, has many clients who are 65 or older but who have been forced to come out of retirement because "they are about to go broke."
"It's the good, hard-working folk that have been caught up in this mess, trying to settle down, trying to make a living, trying to buy what they were told was safe," he said. "It's part of the American dream to be a home owner. Now your biggest investment is worth half of what you paid for it. It ends in chaos. There's nobody helping these people. Nobody in federal government, or state government. There's a lot of anger and a lot of frustration."
President Obama set up the Home Affordable Refinance Program two years ago that was supposed to help homeowners with little or no equity refinance, but homeowners facing foreclosure here say it has had little effect.
They say that instead, they are facing a myriad of fraudulent and unfair practices by banks eager to force through foreclosures.
Hicks is angry that the attorney general of Florida is not seeking action in the courts against the banks. In December, the attorney general of Massachusetts, Martha Coakley, announced she was suing five of the largest banks in the mortgage business against "unlawful and deceptive conduct".
Other attorney generals, who began investigating lenders practices following admissions made by so-called robosigners, could follow suit.
"They are the only attorney generals who are sticking up for their citizens," he said.
The Republican candidates touring the state for the primary have referred, often in their attack ads, to families losing their homes here. But there is little faith among those affected that they or any other politician will make a difference.
Support groups for the foreclosed
In downtown West Palm Beach, an hour an a half drive up the coast from Miami, a group of Floridians are gathered outside the Old City Hall. They've brought fold-away chairs and blankets for their dogs, well prepared for the two hour lecture on the complex subject of foreclosure that is about to begin.
"I like to say my name's Lynn and I'm in foreclosure," Lynn Szymoniac tells her audience, to laughter. A mother of three, she tells them how she used up a lot of money for health care because she had cancer. Her elderly mother, who had Alzheimer's and Parkinson's disease, moved in to her home, further compounding her financial burden. Before long, she fell behind on her mortgage and found herself facing foreclosure on her home.
Szymoniac, an expert in white collar fraud and government expert witness, is something of a hero among victims of foreclosure and those fighting it, for her battle to expose a series of crooked practices by lenders and associated companies. Her lecture meanders through various types of fraud, including "robosigning", the practice of mass signings of false affidavits and other legal documents that was exposed in 2010. But, according to Szymoniac and the Florida attorneys who have, like surgeons in a war zone, become super-specialised in their field, it is still causing problems.
According to Szymoniac and fellow crusader Lisa Epstein, who runs foreclosurehamlet.org, a significant proportion of seized homes here are "manufactured foreclosures", brought about as a result of illegal and unexplained fees, misapplication of holding payments or because people have been wrongly informed.
One such charge is "forced place insurance" something which is levied by companies when a homeowner doesn't have their own insurance. Benjamin M Lawsky, the superintendent of the
New York State Department of Financial Services investigating institutions that underwrite and sell force-placed insurance, described it as the "dirty little secret of the mortgage industry."
Because of the hurricanes in Florida, such insurance is prohibitive and can raise the cost of a mortgage by as much as $2,500 to $5,000 a year.
Around 28% of American homes are "underwater" according to RealtyTrac websites. But in Florida, where property prices skyrocketed before taking a massive dive in the crash, 48% are.
In Palm Beach County, the figure is 45%.
Szymoniac said she gets hundreds of calls and emails every week from people who have no where else to turn.
"So much of the economic disasters people fall into have to do with our broken healthcare system" she said. Others are victims of the economic recession, which cut their incomes, and the bursting of the housing bubble.
'Mommy, can we ever go back?'
Monica Zapata, a mother of two from Wellington, Florida, is among Szymoniac's audience. A travel agent whose husband had his own business in electronic components, Zapata lost her home to the bank in 2010 but is suffering still.
"It caused me a lot of stress, anxiety and panic attacks," she told the Guardian. "When we had the papers for foreclosure in April, I was rushed to the emergency room four times. I thought I was having a heart attack, I really thought: this is the big one. I'm not the person I was. My children are affected. My little boy, who is nine, says 'Mommy can we ever go back to my house?' That brings tears."
Zapata went to her bank, GMAC Mortgage, to ask them, unsuccessfully, for help. Then they went to Neighborhood Assistance Corporation of America (NACA), which helps victims of the subprime mortgage scandal, and got help. She said: "To cut a long story short, GMAC told us that the paperwork came too late, we can't save the house. We tried everything possible and they did not want to help us."
For homeowners who fall behind in their mortgage payment, their only hope is that the mortgage company offers a modification programme.
But such programmes are rare.
"There's not a politician out there right now who is willing to help," Hicks, of Alliance Legal Group, said. "I haven't heard any Republican candidate say anything of any note about this state or this crisis. It's far too complex for politicians, to say let's go after them would be political suicide. But the banks are guilty on every front."
Gary Thomas, 50, a father of three from Palm Springs who works in construction and remodelling interiors, took out an adjustable rate mortgage in 2004, but when the rates from Deutsche Bank went up to 9%, he said he asked "nice and politely for a fixed rate so we wouldn't end up bankrupt".
In 2009, he started missing some payments. He was able to get modified loan, but only for 9 months. On Thanksgiving, they gave him a summary judgment, which means they want to go to court for foreclosure. Thomas said that the process has taken its toll.
"Insomnia, pressure on the marriage, intermittent fights and there's the doomsday scenario. The kids have grown up in that home – we've had it for 20 years," he said. "The banks get all this money. They were bailed out. But they are not even close to helping us out."
