The number of foreclosures in Florida has waned over the past year. Though many view this as a positive sign of economic recovery, the reality however, is that the reduction in the number of foreclosures is probably due to a backlog with banks due in part to the recent robo-signing scandal. Once banks establish new foreclosure procedures it is likely that they will once again pick-up.
The Federal Reserve Bank in Atlanta reports that currently, around 25 percent of the mortgages in Florida are either in foreclosure or working their way toward it, with homeowners delinquent in payments.
There are a variety of reasons that homeowners are not making mortgage payments. While some choose to stop payments on a loan that is for more that the house is worth, for a majority, it is because they cannot afford it. Homeowners in this situation may be unemployed, facing huge medical bills or dealing with an adjustable rate mortgage that has ballooned.
Often people unable to make mortgage payments believe foreclosure is their only option. This is not always the case however. One Florida couple that was experiencing financial difficulty was able to find a way to avoid foreclosure.
After the inheriting a house from a relative, the husband and wife feared they would lose it. They were unable to work and their financial status did not allow them to pay health insurance premiums. The thought of losing the house was particularly troubling to them since they had promised the relative who gave it to them that they would take care of it. Though they owed money to the IRS, a mortgage company and doctors, an attorney was able to develop a plan that would allow them to keep the house.
The attorney for the couple suggested they seek a loan modification and file for bankruptcy. Under certain circumstances steps such as these make it possible for homeowners to keep their house. Among other things, homeowners must have enough money coming in to make a reduced mortgage payment.
Though not an option in every case, homeowners facing foreclosure may want to contact an attorney to determine if filing for bankruptcy and seeking a loan modification is a possibility for them.
Source: Florida Today, “After slowing, more foreclosure filings on way,” Patrick Peterson, Nov. 4, 2011