What Homeowners Need to Know about the Foreclosure Deal
In February, Florida signed on to the biggest state-federal settlement in American history, a $25 billion settlement with the country’s five leading mortgage loan providers: Ally Financial Inc., Bank of America, Citigroup, JPMorgan Chase, and Wells Fargo. How much assistance can homeowners who are facing foreclosure expect from the settlement?
Perhaps more than any other state involved, Florida has a strong interest in seeing the foreclosure crisis brought to a just, equitable close. Florida has been the site of the most foreclosures in the country. When revelations of rampant abuses in the mortgage industry—including the “robo-signing” scandal, which involved extensive use of fraudulent documentation by mortgage companies—were reported in 2010, the public backlash was particularly intense among Floridians.
However, for the hundreds of thousands of homeowners who have sustained the brunt of the damage inflicted by the mortgage crisis, the settlement does not go far enough. Critics have already lambasted it for being too forgiving of the lenders and not generous enough for the victims of the crisis. The settlement also does not apply to mortgages backed by Fannie Mae or Freddie Mac.
Under the terms of the foreclosure settlement, Florida will receive about $8.4 million, which will be divided up in this manner:
- $7.6 billion of the funding will go to provide loan modifications for borrowers. The lenders involved in the settlement have pledged to provide home loan reductions for about 1 million Florida homes.
- $170 million will go to 750,000 Florida borrowers whose homes were foreclosed on “unfairly or improperly” between 2008 and 2011, which amounts to about $1,800-2,000 per homeowner. They will not get their homes back.
- $309 million will go toward providing refinanced loans to homeowners whose mortgage loans are “underwater,” meaning that they owe more than the home’s current value.
- $350 million will go directly to the state, which will use the funds toward efforts to protect consumers and homeowners from harm.
To learn more about how you stand to benefit from the settlement, contact The Law Office of Charles P. Castellon. We have represented hundreds of clients in foreclosure cases, finding a way forward for people who thought that foreclosure was inevitable. Call our Orlando office today at (407) 851-0201 to schedule an appointment.
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