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Across the U.S., foreclosures have declined in recent months. Miami homeowners have been prime targets for foreclosure and bankruptcy since the recession took hold in 2007. While most observers are awaiting a real economic recovery, at least, foreclosures are declining.

Fourth quarter 2011 enjoyed a 16 percent foreclosure decline partnered with a 17.9 percent reduction from the same period in 2010. Regulator efforts to discourage banks from eliminating the common practice of proceeding with foreclosure while also working on borrower-requested loan modifications are apparently working.

There are increasing efforts to keep borrowers in their homes by reducing interest rates or monthly payments, instead of proceeding with foreclosure, which typically helps no one. Still, there is an over-supply of available homes, driving prices downward. Fortunately, the South Florida and U.S. market show signs of potentially stabilizing home prices.

Borrower complaints against banks and mortgage lenders regarding inappropriate collection efforts continue. However, settlements with the nations’ largest banks are hopefully helping homeowners save their properties.

Since 2008, the government has tracked 2.4 million loan modifications made by mortgage lenders. Data indicates that almost half (48.3 percent) of those homeowners remain current on their loans. Unfortunately, around 17 percent of the homeowners are in the midst of or have endured foreclosure.

Mortgage lenders remain under detailed scrutiny regarding their treatment of struggling borrowers. State and federal regulators continue to try to eliminate the “illegal shortcuts” many lenders took during the recession to accelerate foreclosures, e.g., robo signing.

Some of the nation’s largest lenders, including Bank of America, JPMorgan Chase, Citigroup Inc., Wells Fargo, and Ally Financial, settled with various state attorneys general and the Justice Department for $25 billion to answer allegations of foreclosure abuse. These funds are to be used to make loan principal reductions and additional initiatives to help homeowners retain their properties. The homeowner population around the U.S. is watching with anticipation of positive results. Are you?

Source: Reuters, “New foreclosures on homes fell in fourth quarter,” Dave Clarke, March 28, 2012