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Florida sees some mortgage relief

A bill was signed by Gov. Rick Scott that distributes some $200 million in funds earmarked for mortgage relief. He also vowed that banks will be held accountable and families will be protected from foreclosure abuse. However, states, including Florida are complaining that the banks are delaying requests formortgage modifications.

Florida received 8.4 billion dollars as part of a settlement with the five largest mortgage lenders, Ally Financial, Bank of America, Citigroup, JP Morgan Chase and Wells Fargo, as a settlement for abusing foreclosure rules. Most of it is used to create mortgage modifications and write downs. However, the state was also granted $334 million in cash, which was placed in escrow until there was agreement on how to spend it. There was even more delay as lawmakers argued with the Attorney General about whether or not the money needed to pass through the Legislature.

The delays made Florida and Texas the last two states that needed to determine what to do with the cash. An agreement was finally reached. $60 million would immediately go to legal counsel and down payment assistance. Another $73 million would go to the general fund, which would allow it to be spend on things unrelated to housing. The rest of the funds were divided up between various groups including State Apartment Incentive Loan programs, State Housing Initiative Program and $29 million was put aside to help move the backlog of foreclosure cases in the court system

Foreclosures reached record numbers during the recession. If a homeowner is facing foreclosure, a bankruptcy attorney may be able to offer some solutions. It may be possible through a Chapter 13 filing to put a temporary stay on the foreclosure process. This is not a permanent solution, but if the homeowner can afford the payments, it does allow time to reorganize finances.

Source: Miami Herald, "Gov. Scott signs mortgage-relief law", Michael Van Sickler, June 04, 2013

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James H. Monroe, P.A.
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