During the recession, a number of national banks were found to have conducted wrongful practices that led to more complications for already struggling homeowners. Some of the struggles for Florida homeowners related to obtaining a loan modification and enduring home foreclosures that were not properly verified. Years later, as the market starts to rebound, the banks are being made to pay damages for the wrongdoing and the mistakes that were made.
The national settlement is for a total of $25 billion. Over $9.2 billion of that was earmarked for Florida homeowners. For 32,000 Florida homeowners, breaks came in the form of short sales. Some 50,000 other Florida homeowners had their second mortgages wiped clean. Many others were able to get their principal mortgage payments reduced.
The lenders who had to pay were found responsible for a number of infractions. One cited was the practice of robo-signing foreclosure documents. This resulted in foreclosures being processed without the actual documents being verified. The banks must now live up to certain standards of service as part of the settlement agreement.
When Florida homeowners struggle financially, they may look into a number of options to keep their home. Some of those options for homeowners can include bankruptcy, a loan modification and/or a short sale. There may be some confusion about some of those alternatives and what may work best depending on the specific needs and situation of the homeowner. It is important for homeowners to explore and research all of their options when they are having financial difficulties in order to responsibly confront financial obligations that have become unmanageable.
Source: heraldtribune.com, Banks finished providing relief required by settlement, John Hielscher, March 19, 2014