At the beginning of 2012, 49 states agreed to a settlement with five leading mortgage lenders to correct the pervasive industry abuses regarding improper foreclosure procedures. Florida was awarded $8.4 billion in funding, most of which will go to provide much-needed relief to hundreds of thousands of homeowners.
However, the settlement may amount to “too little, too late” for Florida’s beleaguered homeowners. Florida has the most foreclosures of any state; about 12% of mortgaged Florida homes are undergoing foreclosure. More than 1.9 million homes in the state are underwater by an average of $65,000. An $8.4 billion settlement, however wisely distributed, will not patch up the problem.
The foreclosure scandal was not the inevitable outcome of the subprime crisis. Mortgage lenders could have saved themselves considerable trouble—and spared thousands of people a lot of misery—by working with borrowers to renegotiate their loans, making it possible for them to make their payments. Instead, many lenders opted to expedite the foreclosure process through unethical—and illegal—shortcuts. These methods included:
- Signing off on foreclosure documents, including sworn affidavits, without reviewing them to verify any of the information.
- Bringing foreclosure proceedings without the documentation required to prove that the lender even owns the property.
- Forging executives’ signatures on documents.
The “robo-signing” scandal broke in 2010, calling into question the legitimacy of every pending foreclosure in the country. In response to the allegations, many leading lenders suspended all foreclosure actions. In October 2010, Ohio’s attorney general sued Ally Financial Inc. for mortgage fraud. That month, all 50 states began a joint investigation of the mortgage industry.
When the largest lenders settled with the states, many homeowners greeted the news with skepticism. Many noted that the credit granted by the settlement would be insufficient to cover many underwater homes, and that it would not stabilize the housing market. Most of all, indignation at the industry’s behavior remains—a suspicion that no amount of money will dispel.
When you need the aid of an experienced foreclosure attorney, call The Law Office of Charles P. Castellon in Orlando. We can not only help you avoid foreclosure; we can also help you find a solution to keep your home and keep your life on track. To schedule an appointment to discuss your foreclosure defense case, call (407) 851-0201.
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