Many homeowners remain underwater on their homes. This means that they owe more on their home’s mortgage than the home is worth. For many, selling the home at a loss is simply not an option. For others who have lost their jobs, making high monthly mortgage payments may not be a reality.
Some such Florida homes have been foreclosed upon in the past, while other Florida homeowners have been able to save their homes by defending against a foreclosure action, and even by filing for bankruptcy, which can halt a foreclosure in its tracks.
Some of the foreclosures that took place in prior years were rushed through by mortgage lenders using faulty foreclosure practices. As a result of those practices, several major banks entered into a settlement agreement in which lenders were to pay $25 billion towards helping homeowners who are struggling with their mortgages.
As part of the settlement agreement, the lenders are required to create a payment plan that the homeowners can afford. Finally, at least some Florida homeowners have seen some relief. According to the U.S. Housing and Urban Development Secretary, one in six homeowners who are benefitting from the settlement live in Florida.
In fact, in the first of their kind, more than 1,000 Florida homeowners have had mortgage principal reductions amounting to an average of $114,000 on primary mortgages. In addition, nearly 500 Florida homeowners have had their second mortgages reduced by an average of more than $65,000.
Other forms of assistance that has taken place this year in Florida include:
• Short sale approvals
• Providing moving assistance for those who have lost their homes
Nationwide about 200,000 homeowners are expected to receive benefits from the lender settlement agreement. These accommodations come none too soon for some struggling borrowers in Florida who may now be able to stay in their homes and avoid foreclosure.
Source: The Palm Beach Post, “Average Florida mortgage reduction tops $114,000,” Kimberly Miller, Sept. 10, 2012