Foreclosure Defense Florida

Soulution to The Foreclosure Crisis- Real Negotiations and Modifications by Lenders

There is no denying that the foreclosure mess from across the country is a crisis. In Florida alone, the Supreme Court estimates that more than 500,000 homeowners will be faced with foreclosure in 2010. The scope and magnitude of the problem is staggering. According to Corelogic, an independent analyst of the mortgage and real estate market:

  • Nearly 1/3 of all mortgages are currently underwater
  • More  than  $3  Trillion  Worth  of  Property  at  Risk  of  Default
  • More  than  15.2  million  U.S.  mortgages,  or  32.2  percent  of  all  mortgaged  properties,  were  in  negative  equity position  as  of  June  30,  2009.
  • Negative  equity  and  near  negative  equity  mortgage combined  account  for  nearly  38  percent  of  all  residential  properties  with  a  mortgage  nationwide.
  • The  aggregate  property  value  for  loans  in  a  negative  equity  position  was  $3.4  trillion,  which  represents  the  total property  value  at  risk  of  default.
  • In Florida,  the  aggregate  value  of  homes  that  are  in  negative  equity  was $432  billion and Miami alone is $152  billion.
  • The  top  five  states’  negative  equity  share  was  47  percent,  compared  to  25  percent  for  the  remaining  states.  In numerical  terms California  (2.9  million)  and  Florida  (2.3  million)  had  the  largest  number  of  negative  equity mortgages,  accounting  for  5.2  million  or  35  percent  of  all  negative  equity  loans.

See summary of full report here.

Banks and Lenders Are Only Making The Crisis Worse; Here’s How You Make It Better

It is undeniable that we are in a massive economic crisis.   Despite government reports of 10% unemployment, as I have reported previously, the true number is somewhere approaching 30%.   Despite some slight improvement in sales, real estate remains mired in a quagmire of high inventory and few sales.   It is particularly frustrating that against this backdrop, the banks and lenders have thus far been almost entirely unable to work with borrowers and negotiate practical solutions to the problem.   What kind of solutions?

  1. Accept Reasonable Short Sale Offers….In a Reasonable Amount of Time.
  2. Waive The Pursuit of Deficiency Judgments Against Borrowers. (Doing So Will Speed Through a Great Many of Foreclosures.)
  3. Modify Mortgages So Homeowners That Want To Stay in Homes Can. (Foreclosing Will Only Bring More Inventory and Less Revenue.)
  4. Reduce Principal for Underwater Mortgages. (This Will Result in a Quantified and Known Loss, But Those Loans Have a Better Chance of Performing.)

The Final Point, principal reductions has been the hardest pill for the lenders to swallow, but there is growing consensus that this is required in order to move towards a recovery.   An article in today’s Wall Street Journal reports that institutional investors are teaming up with community groups to encourage or force lenders to take the steps I’ve detailed above.   (Full article here)   At some point in time, something’s gotta give.   Given the magnitude of the problem, it will take a major shakeup for something good to occur, but economic and practical realities may force the issue.   The economic reality..the current foreclosure problem is costing more money in the long run.   The practical reality…the current system isn’t working.

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