Attorney Roy Oppenheim on HuffPost Live: Pre-Foreclosures Exposed

Mike: This is Huff Post Live. I’m Mike Sacks, and the real estate website zillow.com recently shook up the market by making homes in the process of foreclosure easily searchable for everyday buyers. The move may be smart business, but how does it impact the people who may be losing their homes? Joining me to discuss this, we have Will Sirotak who lost his home due to foreclosure, we have Jed Smith an economist for the National Association of Realtors, Roy Oppenheim an attorney focusing on Florida foreclosure defense, and Stephanie Walker a foreclosure victim and the author of “Love in the Time of Foreclosure”.

Roy, on that point of privacy, how do you respond to that? This idea that perhaps that someone underwater could feel humiliated by being outed unintentionally without their consent to all their neighbors and their family.

Roy: Just to give it some context, I’m a foreclosure defense attorney. I represent hundreds and hundreds of families since ’07, who are in foreclosure. So, first of all, let’s understand that this information is public information, it’s of the public record, and it’s not privacy, it’s not secret. I look at it being in foreclosure today is kinda like being in a divorce. I mean, in the old days maybe there was some scorn associated with being divorced, but today there’s no moral outrage to someone who decides to get a divorce, and there’s no moral outrage with someone who’s gonna go into foreclosure.

The reason they’re in foreclosure as Will said before is because of a systemic pattern of corruption that occurred on Wall Street, and since the banks, for the most part, are the ones who are responsible, a lot of people find it perfectly okay to be in foreclosure, and ultimately engage the bank in some sort of loss mitigation process. So, I really don’t have much of a problem with Zillow, particularly because Zillow is not including the people’s name. They’re just giving the property address.

I think we probably want to hear from Jed because Jed’s probably gonna be the one who’s gonna say that he doesn’t like it only because it’s the realtors who’re gonna be hurt. The realtors are kind of like the travel agents here, you know. The last time I booked a flight, I didn’t use a travel agent, you know. My kids don’t even know who what travel agents are anymore, and to a large extent, Zillow may be in the process of neutralizing the role of travel agents. Excuse me, of realtors when it comes to short sales, because if this information is published, then in fact…

I mean, look at the presidential election. The election is not talked about this crisis. It’s not talking about people in foreclosure because the bottom line is this is gonna have to get resolved ultimately through the free markets. It’s not gonna get resolved through government, and because of that what Zillow’s doing is just trying to remove the friction that we may have between a likely buyer and seller in the context of this stressed real estate. So, I have to say that this is an interesting experiment. It’s part of the American experiment, and I can’t say that there’s any privacy issues that are associated with Zillow’s decision here.

Stephanie: There’s no way that I would’ve been completely open to somebody knocking on my door, or calling me up. I would think it would have to be knocking on my door. I don’t know how they’d get my phone number, but knocking on my door, and saying, “I see you’ve missed your payments. I would love to buy your house.” And then, I would not deal…I would not have dealt with them without my realtor. It’s like, this is to me a legitimacy issue. I was really fearful of people preying upon us, and I would definitely say paranoid.

I blogged about it on my blog, “Love in the Time of Foreclosure”, but I never listed our address. My whole idea was I advocate sharing a situation with people for people who are in this situation. I feel like it is a really good idea to let your friends and family know what you’re dealing with. What I don’t like is that suddenly now you’re out there. I just feel like there’s this level of vulnerability that already exists, and it is so hard to know what that feels like unless you’re actually going through it yourself.

And, I give our realtors great credit for trying to understand what we were going through, and helping us so much through the process, and navigating the whole short sale road before anybody really knew what it was, and before the banks were really accustomed to it. Now, it’s kind of a regular thing that’s happening. So, if that can be a plus side for this, I think that’s fantastic. I mean, that would be great. I just definitely see it from a different point of view, which is more emotional.

Mike: Yeah. And, were you receiving a bunch of calls when you were going through the process? Were you getting all sorts of predatory things happening to you?

Stephanie: Yeah, and in the mail. I mean, I know it was a big concern, like, are people gonna be looking in our windows now? Because, yes, it’s public record. It’s always been public record. Zillow isn’t making information public that hasn’t been public. It’s just way, way, way, way more accessible. You used to have to go to a courthouse, and dig through the documents, or sign up a for a service where you paid a fee and got those listings. Now, I can jut look on my Smartphone, on my Zillow app, and on a map see all these little dots, and homes that are, you know, behind payments, and be a snoopy neighbor if I want to be.

And that’s, I guess more of that…it’s maybe naive of me because that’s the way the world is going with our assess to information. I think more than anything, I just want homeowners who are behind on their payments to just have this information to know that their information is on Zillow. So, that they can share with their family, and friends, and neighbors before they find out through randomly looking at Zillow, or something like that. I think that it just needs to be made known, and made aware.

Mike: Go ahead, Roy.

Roy: And, not to be a spoilsport, and by the way, I have a license to sell real estate also. Almost everyone does in the state of Florida. All you have to do is be is a high school graduate, and you don’t even have to graduate from high school. You can have an equivalency. So, you know, my concern for my Mike is he says there’s all this data out there, some of it’s good, some of it’s bad. The realtors, and as again I said, I am a licensed real estate salesperson, have controlled this information, and what Zillow has done for better or worse it’s opened that information.

In terms of privacy as Stephanie’s mentioned, I mean, you get tons of letters when you’re in foreclosure. You get tons of letters from my colleagues who want to represent my clients because that’s how they think their gonna find clients is by sending them solicitations. You’re in foreclosure. I can help. You get 10 of those. Then you get a bunch of letters from folks who are gonna try and “be angels”, and they’re gonna rip you off, and they’re gonna be scamsters, and you’re gonna get that.

So, I mean, Zillow is just legitimizing this information so that people who are on either side of the fence, in fact, have a sense of creating a real marketplace that will eliminate some of the friction that we have so that we can get back to where we once were. I mean, the fact that this information doesn’t flow as freely as it does is a problem with the entire real estate information flow, and market structure that we’ve had. And, the realtors will try and hang on to it…

Will: Can I say something?

Roy: …as long as they possibly can. And, Zillow in an interesting way is both working with the realtors in the same sense that they allow realtors to advertise, but they’ve provided tons of information that historically was completely unavailable unless you had a realtor.

Mike: Yeah, go ahead, Will.

Will: Yeah, Roy, I think what we’re dealing with…again, there’s a larger problem. We’re legitimizing the systematic deletion of the middle-class here. Again, it’s a larger moral issue, and we’re spending tax dollars in having these banks taking over these homes, and selling them to developers, and we’re stratifying our class.

Mike: What’s the rate of predation for these types of listings, whether online or elsewhere, that’s more freely available? What’s the rate of people that Will’s talking about coming in, and buying 100 houses, flipping them, making themselves richer at the expense of those who are currently living in a house getting a raw deal on the sale price? Is this a rampant thing? Is this an epidemic in the housing market?

Roy: I don’t see it as an epidemic. What I do see is that you do have some investors out there that have systematized the process, but we also have clients on the flip side besides our foreclosure defense ones. We have middle-class clients, we have policemen, firemen, maybe a young doctor who wants to buy one of these foreclosures, and they have the good sense to hire an attorney to then assist them in that process. Just like if someone’s in foreclosure, they shouldn’t be first hiring a realtor. They should be first hiring an attorney.

So, they can get advice not just on how to sell a home, but on how to save the home. And so, they can first figure our how to save the home, how to modify it if the short sale is appropriate, if they should be going bankrupt. I mean there’s so many different possibilities and permutations in every particular situation. One of the permutations, of course, is that you may want to do a short sale, but that’s just one factor of many, many other factors.

So, we don’t see it as pervasive, but I do think from a middle-class perspective, Will, that on occasion you would get a middle-class person who normally couldn’t afford to live in a particular neighborhood sees the other person’s misfortune as unfortunate as it may be including your misfortune. But someone else may be able to benefit, and they don’t have to be someone who’s in the upper-class. They could be someone who’s trying to break into the middle-class.

Mike: I really appreciate talking to all of you about this. It’s been a really good conversation. It’s helped bring some nuance to a story that came to our attention just recently, and I really want to thank each of you. So, Will, Jed, Roy, Stephanie, I hope to talk to you all again soon. This has been good, so thanks a lot. This is Huff Post Live. The conversation will continue.