Category Archives: Econ & Money: Mortgage Mess

Miami Herald Still Can’t Cover the Housing Mess Properly

The Miami Herald has often been accused of shilling for local real estate interests (they used to buy a lot of ads). Excellent evidence for this accusation, or at least for one-sided local boosterism, can be found on today's front-page, top right, headline, which says in big extra-dark letters: Home sales up as prices stabilize.

The much smaller sub-head begins the clawback to reality: “In December, South Florida home sales continued to rise but prices still went down — although at a slower rate.”

Even so, explain to me how you get that headline about “prices stabilize” from this text:

(Paragraph 4) … Median prices fell just 5 percent in Miami-Dade and 2 percent in Broward in the year-to-year comparison. …

(Paragraph 6) … Realtors say more buyers are perusing property, and some believe prices have stopped their freefall …

(Paragraphs 10-11) Still, median home prices continued to fall, dropping 10 percent in Miami-Dade and 17 percent in Broward compared to November. The figures include only those homes sold by real estate agents.

Condominium sales skyrocketed in December, compared to the same month of 2008 — up 68 percent in Miami-Dade to 766 and 59 percent in Broward to 949. At the same time, median prices fell: down 16 percent in Miami-Dade and down 17 percent in Broward.

(Paragraph 12) …. Nationwide, the picture is different. .. prices rose from December 2008

So in fact the real story is that our prices are still falling more than the rest of the country's. Yet the headline reads “prices stabilize”.

I don't blame the reporter, Ina Paiva Cordle, for the headline, because we all know that editors not reporters do headlines. But I do blame the reporter for who gets quoted in this article:

  • Frank Kowalski, president of Metro Dade Realty in Miami
  • Marla Martin, spokeswoman for Florida Realtors
  • National Association of Realtors Chief Economist Lawrence Yun
  • David Dabby, president of the Dabby Group in Coral Gables.
  • Jan Herard, broker associate for Coldwell Banker Residential Real Estate in Broward

Is there anyone on that list who doesn't have a financial interest in spinning positive news on home sales and prices? Well, the one person who isn't a realtor or doesn't work for one seems to be David Dabby. So what is this Dabby Group? The Herald doesn't tell us, so as readers we can't find out. Unless we fire up that browser and discover that the Dabby Group does real estate appraisals — something that also benefits from increase in transactional volume, if not necessarily as directly from increases in prices.

Can't the Herald find one independent voice to interview on this subject? There must be one in Miami somewhere. If not, folks, let me be the first to tell you that long distance is very cheap if you use Skype.

Posted in Econ & Money: Mortgage Mess, Miami, The Media | Leave a comment

Who Was it Who Said ‘Political power grows out of the barrel of a gun’?

Apparently, at Goldman, Sachs they're not just feeling the heat, they're packing it too:

“I just wrote my first reference for a gun permit,” said a friend, who told me of swearing to the good character of a Goldman Sachs Group Inc. banker who applied to the local police for a permit to buy a pistol. The banker had told this friend of mine that senior Goldman people have loaded up on firearms and are now equipped to defend themselves if there is a populist uprising against the bank.

I called Goldman Sachs spokesman Lucas van Praag to ask whether it’s true that Goldman partners feel they need handguns to protect themselves from the angry proletariat. He didn’t call me back. The New York Police Department has told me that “as a preliminary matter” it believes some of the bankers I inquired about do have pistol permits. The NYPD also said it will be a while before it can name names.

(Alice Schroeder at

Yes, the title is ironic.

Posted in Econ & Money: Mortgage Mess | Leave a comment

Herald Covers UM Foreclosure Fellows

Nice article in today's Herald about the UM law foreclosure fellows program, New lawyers help fight foreclosures.

I got quoted as saying,

“When the foreclosure happens, the number of important legal defenses that may be available are not always obvious to people without legal training,” said Michael Froomkin, a University of Miami law professor who heads the Foreclosure Defense Fellowship.

“Some of these options will buy you time, and some of these will do a lot more … even those that buy you time are a way of getting a lender's attention and stimulating a negotiation,” he said.

For a good discussion of what one of those defenses looks like — and some of the pitfalls to which it can be subject — see today's analysis at Calculated Risks, Putting the MERS Controversies in Perspective.

Posted in Econ & Money: Mortgage Mess, U.Miami | Leave a comment

More Great Publicity for the Miami Law Foreclosure Fellowships

You know you are having a good day when 'Above the Law' (ATL) writes something positive about you — and that was my experience this afternoon with University of Miami Law School Puts Some Money into Public Service.

In addition to not making me look bad — indeed, making me look nice — I especially liked the conclusion of the piece,

The recession has created a huge need for legal services. And it has created a glut of laid off or unemployed lawyers. But matching the attorneys to the work is difficult because it is tough to pay off law school debts by helping low income families fight off foreclosure proceedings. Miami’s programs aren’t going to fix that fundamental disconnect between the cost of law school and the need for legal services.

But the school has taken a nice step in the right direction. The fellowship stipend might not be much, but it is infinitely more valuable than lip service.

ATL is best known for ribbing or even bashing lawyers and law schools…and the commentators in its threads are ferocious on a good day, and worse otherwise. (Indeed, the first comment on the article reads, in full, “Suck it.”)

The law school also got a good write-up in the ABA Journal's Miami Law Grads Get $10K Foreclosure Fellowships to Fill Legal Services Gap.

Update: Even nicer write up at South Florida Lawyers. Thanks guys.

Posted in Econ & Money: Mortgage Mess | 2 Comments

UM Foreclosure Fellowships in TIME Magazine

TIME Magazine has a great story by Tim Padgett on UM's Foreclosure Fellowships, Another Housing Crisis: A Shortage of Foreclosure Lawyers.

Nice quotes from Yolanda Paschal, one of our great Fellows, from Carolina Lombardi, a senior attorney at Legal Services of Greater Miami Inc., and a few words from me. I'm glad that our program is getting some recognition. As the article says, the foreclosure defense problem is enormous, the legal resources available are puny compared to the need, and we at the law school are trying to do something about it.

Whether and how we can repeat this year's effort, however, still depends on what sort of funding we can raise for it. Fund raising is very very tough in the current economic climate. Our current plan is to shift away from giving fellowships to graduates and instead ramp up on a student-staffed housing-related clinic that might even be housed downtown. In a perfect world, I'd like to do both the clinic and the graduate Fellowships, but the funding is not yet in hand to make that possible.

Incidentally, the legal defense for borrowers that I mentioned in the the TIME article — that parties foreclosing sometimes don't actually know who owns the note — is featured in a column in today's NYT, Gretchen Morgenson's If Lenders Say 'The Dog Ate Your Mortgage'. In other cases there are different meritorious defenses, but it takes a trained person to identify them. And then no doubt there are the cases where people really will lose their homes no matter what you do; the point is to figure out which case is which rather than just give up. And that takes a lawyer.

Posted in Econ & Money: Mortgage Mess | Leave a comment

UM Hosts Great Foreclosure Defense Training

We had a real happening of a foreclosure defense seminar yesterday. Here's how the law school wrote it up, but it was even better than it sounds:

Fighting the Foreclosure Crisis: Foreclosure Defense Specialist April Charney, JD '80, Shares Expert Advice in Workshop

Over 150 lawyers attended a foreclosure workshop, hosted by the University of Miami School of Law on October 2nd, which featured April Charney, JD '80, a consumer lawyer and nationally recognized foreclosure defense expert. Charney addressed such topics as federal and state law that govern mortgage origination, common law/state law causes of action and affirmative defenses, drafting discovery and motion practice, and ethical considerations in foreclosure practice.

Charney’s daylong “Defending Foreclosures” classes have gained widespread popularity with lawyers throughout the country. She has taught in Ohio, California, Minnesota, South Carolina, Missouri and throughout Florida. Charney requires that all attendees perform 20 hours of pro bono legal work in their communities.

“The workshop has been tremendously informative and has made me realize how complicated this area is,” said Yolanda Paschal, JD ’09, one of the Foreclosure Defense Fellows who will be working with the Legal Services of Greater Miami starting on Monday, October 5th. “I anticipate that this fellowship will be challenging and I look forward to that.”

The Foreclosure Defense Fellowship, recently created by the School of Law, will enable newly minted lawyers to give free help to local residents caught in the foreclosure crisis. The School of Law is one of the first schools in the nation to create a program of this kind. Recent UM graduates will acquire real-world experience and address a serious need in the community at the same time.

Excited to be back at her alma mater, Charney took a moment from the workshop to commend the School of Law for establishing the new Foreclosure Defense Fellowship Program and Professor A. Michael Froomkin for his leadership with the project. “The foreclosure crisis in Florida is troubling,” said Charney, “but at least this program will do good work to help homeowners keep their homes.”

“April Charney delivered a tour de force performance on foreclosure defense, backed up by a CD with over 1,000 pages of sample complaints, depositions, and litigation checklists,” said Froomkin. “I wish all my students could attend lectures like this to learn about the law on the ground as it is playing out in the context of a financial crisis.”

It was an event. Great as it was, April Charney wasn't entirely happy: She groused that some of the attendees were from what she calls “the dark side” — foreclosure specialists coming to find out what defense counsel will be doing to them.

Posted in Econ & Money: Mortgage Mess | Leave a comment