While other states received only estimates of how much they would receive, Florida is guaranteed at least $4 billion to be issued in the form of refinances, loan modifications and principal reductions for Florida homeowners facing foreclosure. Additionally, the state will receive small cash awards to be distributed to some individuals who lost homes due to foreclosure. Although Florida's attorney general defended the settlement in early January, she refrained from signing the agreement until late in the deliberations. She explained, "We remained engaged in settlement discussions, but we were willing to do what it took to make sure Florida was treated fairly."
]]> In what is being called the largest joint federal and state settlement in the history of the United States, officials from 49 states met with representatives from some of the country's largest lenders in order to address accusations that banks around the country improperly and illegal processing thousands of foreclosures. The final settlement stipulates that the five mortgage services involved in the scandal will pay $5 billion to federal and state governments and provide $20 billion in mortgage relief for homeowners.The settlement still has its critics, with one attorney arguing that it still fails to appropriately hold lenders accountable for "document fraud issues". He also believes the banks should have been required to make more cash payouts. The attorney says that while the settlement will help many homeowners, he feels that it is only a partial solution for the national foreclosure crisis.
Source: Palm Beach Post, "Florida wins rare promise in landmark $8.4 billion foreclosure settlement," Kimberly Miller, Feb. 10, 2012
Occupy groups in Fort Lauderdale and elsewhere across the state have reportedly successfully intervened for homeowners facing foreclosure, including a couple who had their home foreclosed and were scheduled to be evicted after becoming delinquent on $27,000 in loan payments on their second mortgage. After dozens of supporters appeared at the home to support its owners, the couple's lender announced that it would "consider all viable options to help them avoid eviction." The couple's attorney credits the Occupy group's activism for helping to convince the bank to reconsider the couple's situation.
]]> One participant in the rallies, a 52-year-old woodworker, explained that the case represents a wide scale problem affecting hundreds of Florida homeowners. "This was a family trying to do the right thing, and they were being denied," he said.Another member of the movement explained the group's actions: "The only thing that works is public outrage and media exposure of bad practices by banks." The woman, a nurse, joined the movement after she narrowly avoided wrongful foreclosure on her house that she alleges was caused by illegal foreclosure practices by her lender.
The couple whose home was saved says that while they are glad that the threat of foreclosure has been avoided, they fear that they could still lose their home to foreclosure. She says that she and her husband may have been evicted if not for the help of Occupy Fort Lauderdale.
Source: Orlando Sun-Sentinel, "In South Florida, Occupy movement targets housing crisis," Mike Clary, Feb. 4, 2012
]]>In some cases, people also do not even realize that they are in dire financial straits, and continue on with their spending and saving behaviors for quite some time, until they are deep in debt.
]]> For example, if every single month you find yourself overdrawing on your checking account, this could mean one of two things: Either you are spending more than you earn, or you are just spending too much money. This could be tied to being unemployed, or just not making enough for your necessary bills.Another tell-tale sign of financial danger up ahead, is if you are picking and choosing which bills to pay because you cannot pay both at the same time. Of course, with the current strained economy this may occasionally happen. But, if this is happening month after month, you may need financial help.
Lastly, do you have an emergency fund? If the answer is no -- or the fund is very small -- you can be in real danger if a life emergency or sudden health issue arises. Typically, the advice is to have an emergency fund of at least six months of income, but some experts say a whole years worth of savings is even better.
In the end, if you are reading this and realize that you fall into some of these categories, and are going deeper and deeper into debt; know that you are not alone. In fact, according to the American Bankruptcy Institute, from September 2010 through September 2011, there were 1.47 million bankruptcies filed in the U.S.
Because of this, if you are in a tough financial situation, don't just handle this alone. Instead, contact a bankruptcy attorney to see what debt relief options may be available.
Source: Yahoo Finance!, "5 Red Flags That Show You're in Financial Trouble," Brian O'Connell, Jan. 18, 2012
]]>For instance, frontrunner Mitt Romney informed an editorial board that he believes the problem of rampant foreclosures found in Florida and other states should be left to "run its course and hit the bottom." While the Obama administration's efforts to protect homeowners facing foreclosure have been less successful than hoped, the GOP candidates may be forced to directly address the problem themselves.
]]> Research firm RealtyTrac ranked Florida as one of the worst states for foreclosures in 2011, with almost 182,000 homes across the state being served foreclosure notices during the course of the year. In 2007, the average foreclosure in Florida took about 224 days to complete, but that figure has now swelled to 806 days. An official with RealtyTrac called Florida "the epicenter of dysfunction in the foreclosure industry in the past year." He said he blames the issue largely on the high number of foreclosures in the state. "You ended up with some sloppy paperwork, some questionable practices," he explained.Experts say candidates like Romney could appear out-of-touch to Florida voters. He joked to a Florida crowd that he too was unemployed, but has repeatedly been attacked for his high income and low tax rate. If he wants to win support in Florida, experts say Romney must better come to terms with the foreclosure problem and other related issues faced by millions of Florida residents.
Source: National Journal, "Florida's Housing Mess Puts GOP Hopefuls on Uncomfortable Turf," Catherine Hollander, Jan. 23, 2012
]]>Florida's most active cities in terms of Florida in terms of foreclosure rates were North Port at 1 in 151, Riverview at 150, Land O Lakes at 1 in 104 and Lehigh Acres at 1 in 96. Counties in the Gulf Coast also experienced high foreclosure rates in the state during December. Manatee County saw a foreclosure rate of 1 in 266 homes while Charlotte led the region with 1 out of every 212 home being served foreclosure notices.
]]> Meanwhile, Collier County saw the lowest foreclosure rate in the state at 1 in 528 homes entering foreclosure, putting it nearly on par with the national rate. Most of its 358 total foreclosure notices were issued to properties in Naples.The national foreclosure rate hit their lowest yearly level since 2007, but experts do not expect this downward trend to continue. RealtyTrac's CEO said that falling foreclosure rates are not necessarily signs of an improving economy or housing market. He explained, "Foreclosures were in full delay mode in 2011, resulting in a dramatic drop in foreclosure activity for the year." He added that the low figures may also be indicative of "dysfunctional" foreclosures processes that cannot efficiently handle delinquent mortgages.
Source: Gulf Coast Business Review, "Florida foreclosures outpace U.S.," Jan. 12, 2012
]]>One bankruptcy attorney explained that foreclosure and under-employment both significantly contribute to the few number of liquidation bankruptcy filings. A number of homeowners at risk for foreclosure have been able to delay bankruptcy while foreclosures move slowly due to the "robo-signing" scandal and other related issues. Many homeowners facing foreclosure typically look to bankruptcy as a temporary solution, as a filing can delay a foreclosure or lawsuit for six months or even longer.
]]> Another bankruptcy lawyer said that many Florida residents also put off bankruptcy because they are trying to find a job or are worried about credit checks. He explained, "They feel if they file for bankruptcy, they're not going to be able to get another job." Some have speculated that a 2005 federal law has contributed to the drop, as it introduced additional paperwork requirements that make filing for bankruptcy more expensive. Experts say that bankruptcy is now often seen as emergency option for Florida residents, filing for protection only when they suffer wage garnishment or car repossession.Source: Sun-Sentinel, "Bankruptcy filings fell in 2011," Marcia Heroux Pounds, Jan. 3, 2012
]]>The analysis finds that the Miami Fort Lauderdale Pompano area has the nation's highest proportion of homeowners facing foreclosure in the entire nation. As of the report's publication, the area saw a foreclosure rate of 18.5 percent; up from June 2010s rate of 17.8 percent. However, Miami Fort Lauderdale Pompano's rate of serious delinquency has fallen since June 2010 from 25.6 percent to 23.5 percent.
]]> Experts are currently unsure what could cause the area's foreclosure rate to increase while its serious delinquency rate has fallen. One hypothesis is that a higher number of Florida homeowners were able to make delinquent mortgage payments in 2011 than in 2010. If this is true, it could signal an ensuing economic recovery for Florida, which has suffered more fallout from the foreclosure crisis than any other state. Figures from Miami-Dade County support this hypothesis, as the county has gone from 64,001 foreclosures in 2009, to 34,000 foreclosures in 2010, and finally to 14,646 foreclosures between January and November of 2011.Whether homeowners are simply trying to weigh out their options shortly after falling on financial problems or have already been served with a foreclosure notice, there are legal professionals available to answer any questions.
Source: The Atlantic Cities, "Map of the Day: Florida's Ongoing Mortgage Problem," Nate Berg, Dec. 30, 2011
]]>Since it was initiated soon after the recession began in 2008, only 3.6 percent of the 78,076 total Florida foreclosure cases that were eligible for mediation resulted in settlement. Those that did qualify resulted in deed-in-lieu foreclosures, loan modifications or short sales.
]]> Banks and attorneys disagree regarding why the program failed to live up to its goals. An executive with the Florida Bankers Association called the mediation a "well-intended program that just didn't pan out." He added, "We don't want to foreclose. That's not good for anyone." Meanwhile, attorneys say lenders were largely unwilling to cooperate with mediation. One lawyer argued that while the program was destined to fail some percentage of borrowers, it resulted in lenders "not acting in good faith negotiations."Officials and judges say that a combination of those factors likely led to the programs demise, as well as other problems. For instance, mediators frequently had trouble contact default borrowers and the bank representatives who appeared at mediation sessions often were not authorized to negotiate the matters that arose during negotiations. Regardless of the program's fate, the director of the Conflict Resolution Collaborative at the University of South Florida said it allowed those involved to begin discussing the problem of foreclosure. He explained that, "the program had a great value to the community in so many ways."
Source: Brandeton Herald, "Foreclosure mediation program falters," Josh Salman, Dec. 21, 2011
]]>Bankruptcy can be especially useful for homeowners that do not qualify for the Home Affordable Refinance Program, also known as HARP. This program allows borrowers with loans held by Freddie Mac or Fannie Mae to refinance their homes at lower rates, but borrowers who have not remained current on payments in the past six months are not eligible for enrollment. Additionally, Fannie Mae and Freddie Mac only hold about 50 percent of all mortgages.
]]> Bankruptcy can be a powerful tool for individuals that cannot take advantage of HARP, but experts urge interested parties to consult a qualified attorney before taking action. A legal professional can help homeowners insure that they file for the correct type of bankruptcy, and avoid any dangers due to state exemptions or other stipulations specific to Florida.Chapter 7 bankruptcy can be helpful for borrowers at risk for foreclosure, as it allows them to liquidate their assets in order to pay back a portion of their debt. This can be an effective way of delaying foreclosure action for several months, resulting in more time to seek permanent solutions. However, Chapter 7 filings are not effective when the lender holds a lien on the borrower's home, as the lender may repossess the collateral.
Alternately, Chapter 13 is a viable option for many homeowners behind on their mortgage. Chapter 13 is a reorganization of a debtor's finances. With this option debtors provide a repayment plan to creditors that occurs for as long as five years. One suggested option with a Chapter 13 bankruptcy is that a homeowner can propose to pay an additional amount each month to be applied to the arrearage.
Going through financial troubles is stressful. Thankfully, there are several options available to help individuals and families going through tough times to regain their financial dignity.
Source: NuWire Investor, "Declare Bankruptcy, Avoid Foreclosure," Phillip Van Doorn, Dec. 9, 2011
]]>While the high rates may be a negative sign for homeowners facing foreclosure, some good news was released in a report by CoreLogic. The report found that the state's 90-day delinquency rates were down in September. Still the report was negative overall, finding that actual foreclosure activity did not appear to change in a significant way. Additionally, Miami-Dade County's delinquency rate was still three times higher than the rest of the nation at 25.18 percent. The national delinquency rate is about 7.17 percent.
]]> While Broward County and Palm Beach County saw fairly low respective 90-day delinquency rates of 14.41 percent and 12.91 percent, South Florida as a whole still saw significantly higher delinquency rates compared to Florida overall. The state had a total delinquency rate of 17.38 percent.The CoreLogic report contained additional good news, revealing that Florida is far removed from the states with the highest housing depreciation. Florida ranked 20th in housing depreciation. It experienced a 3.5 percent drop for the 12-month period surveyed, which ended in October, if distressed sales are considered. Without factoring in such sales, Florida's housing depreciation decreased by about 1.1 percent.
Source: South Florida Business Journal, "South Florida foreclosure rate three times higher than U.S.," Dec. 8, 2011
]]>At the center of the case is a process called "robo-signing" that many banks and lenders used to quickly complete foreclose on distressed properties. However, the process was found to be unfair for homeowners facing foreclosure, leading to government intervention and punishment for some offenders. The deceased witness worked as a public notary at a firm based in Fort Lauderdale that allegedly engaged in robo-signing. The witness had said she validated signatures of people who were not there and estimates that she improperly notarized more than 30,000 foreclosure documents.
]]> When the company's robo-signing was revealed, the woman was arrested for her role in the illegal practice. She pled guilty to one count of notarizing the signature of someone who was not in her presence, facing a $2,000 fine and up to a year of prison time. She agreed to testify against two other employees before her death.The two other individuals have not been arrested, but a recent indictment accuses them of instructing employees to engage in illegal notarization practices and submitting those documents to a recorder's officer in order to more quickly initiate foreclosures. While the suspects have not been arrested, they could face more than 100 misdemeanor notarization charges and more than 200 additional felony charges.
Source: OC Weekly, "Key Witness in Massive Mortgage Foreclosure 'Robo-Signing' Fraud Case Turns Up Dead," Matt Coker, Dec. 1, 2011
]]>The report also suggested that Florida's regulations requiring judges to approve foreclosures contribute to its high inventory of delinquent properties, although this can be a blessing for homeowners facing foreclosure in the immediate future. An executive for a Florida-based holdings group said his company has recently received more than 500 new foreclosures from a major bank, suggesting that lenders are beginning efforts to sell larger numbers of foreclosed homes.
]]> Another report from the Center for Responsible Lending suggests that it may take much longer for the country to recover from the downturn prompted by the housing crisis, predicting that the crisis will continue for over five more years. The study pointed to a relatively high rate of homeowners being foreclosed on just a short time after taking out a home loan. The study claimed that a total of 8.3 percent of American households have not yet suffered foreclosure, but are at serious risk for losing their houses.Source: Palm Beach Post, "Longer recovery forecast for Florida," Kimberly Miller, Nov. 17, 2011
]]>Fort Lauderdale ranked fifth on Realtor.com's report, with data from October showing that inventory in the region increased by nearly 38 percent. The area was previously in poor shape, experiencing a steady decline in prices since the initial downturn in 2006, decreasing by about 46 percent up until 2011. According to the report, however, prices in Fort Lauderdale have now begun to rise. This is a positive sign for homeowners who were previously unable to sell their properties.
]]> Other than Fort Lauderdale, Miami ranked first on the list with one of the lowest foreclosure rates in the country. It was followed by Orlando in second, Fort Myers-Cape Coral in third, Sarasota-Bradenton in sixth and Lakeland-Winterhaven in seventh. The annual Top Ten Turnaround Town Report ranks metropolitan areas by compiling foreclosure and housing market data and applying a formula to this data. The formula is based on a number of factors, including unemployment rates, inventory changes and online searches.Sources: Examiner, "Six Florida Markets make it to Realtor.com's Top 10 Early Turnaround Town Report," Steve Gara, Nov. 17, 2011
]]>Underwater borrowers are generally those that purchased homes shortly before the housing collapse and cannot afford to make mortgage payments. Such individuals would likely not even be able to avoid losing money selling their homes until at least 2021. As such, homeowners with underwater mortgages are typically at high risk for foreclosure.
]]> One Fort Lauderdale mortgage broker said he expected the revamped refinancing program would help tens of thousands of South Florida residents who have thus far been unable to obtain government aid with their underwater mortgages. The changes will eliminate a rule that blocked homeowners whose mortgages are greater than 125 percent of their homes' values from enrolling in the program.Additionally, the program would introduce lower fees for refinancing and make the process less risky for lenders, making them more likely to delay foreclosure. Some have blamed the failure of the original program on the reluctance of lenders to participate in the program, with the government hoping the new rules will change that.
The Home Affordable Refinance Program was first implemented in 2009, but less than 1 million homeowners were eligible for aid, despite the White House's claim that it would benefit 5 million. The government expects the modifications to the program will allow at least 2 million borrowers to qualify for refinancing.
Source: Sun Sentinel, "Changes aimed to help more homeowners refinance mortgages," Paul Owens, Nov. 15, 2011
]]>For instance, if you cannot afford your mortgage payments, you could consider renting your home. If you can find a willing tenant, you may be able to afford an apartment while still making mortgage payments. If you can do this long enough, you may eventually be able to afford moving back into your home and resume making payments as usual. Of course, managing your property will incur additional expenses, so be sure to make sure renting is a financially sound decision before doing so.
]]> In some cases, you can avoid foreclosure by filing for bankruptcy. This can be especially useful if a majority of your assets are tied up in retirement funds, as you are generally allowed to keep these even when declaring bankruptcy.You should also check with an attorney to see whether you can negotiate a deed-in-lieu with your mortgage lender. This grants you interest in your property to the lender, who in return forgives your unpaid mortgage balance and delays foreclosure.
It is important to note that none of these solutions are appropriate for every situation, making it important for homeowners struggling with mortgage payments to contact an attorney if their homes are at risk for foreclosure.
Source: WXYZ, "What to do if you're underwater on your mortgage," Ed Greenberger, Oct. 20, 2011
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