Florida’s real estate market will probably remain bogged down for quite some time. A number of initiatives have been taken at the state and federal level, but each of these initiatives has its strengths and weaknesses.

The Home Affordable Modification program, designed to help homeowners restructure their mortgage loans, has produced 33,000 permanent loan modifications since 2007 in southern Florida. During that same time period, there have been over 200,000 foreclosures.

In part, such initiatives have not been embraced by banks that have given out the loans. What lenders have been doing instead have been providing “relocation assistance” to homeowners that sell their homes at reduced price. However, banks are not stepping forward to encourage struggling homeowners to remain in their homes. Often such individuals can find no relief whatsoever without the advice and assistance of someone that understands loan modifications and other debt relief options.

It’s generally difficult to get a home about to be foreclosed onto the market. Unfortunately, this situation is unlikely to change until we get beyond today’s economic downturn. The downturn in the housing market has affected condominium associations as well as homeowners. Most condominium associations are in the same situation as mortgage companies in that such organizations are unable to obtain financing.

Such circumstances will have a devastating effect not only on the homeowner but on the community as well. When homeowners have too much debt, they cannot afford their house payments. When individuals have no recourse to decrease or rid themselves of their debt, they will also be unable to shop and local stores and invest more money into the community.

Source: The Miami Herald, “Loan modification effort hasn’t helped much industry leaders say,” by Toluse Olorunnipa, Oct 26, 2011