How The National Mortgage Settlement Can Help Foreclosures In Miami

A national study revealed that foreclosures in Miami top the foreclosure rate. This may have been linked in the 2010 foreclosure abuse brought about by robo-signing, sloppy recordkeeping, cutting corners and possible fraud resulting in the loss of thousands of homes and investment properties. An investigation into the issue eventually led into a sharp slowdown of foreclosure filing in 2011.

Foreclosures in Miami

Photo Courtesy of Steve Rhodes via Flickr

Just February of this year, 49 state attorneys general and the federal government announced a joint state-federal settlement with the banks Ally/GMAC, Bank of America, Citi, JPMorgan Chase, Wells Fargo. The settlement is set to provide as much as $25 billion relief to borrowers, with Miami expecting to receive $8 billion. The settlement states the banks are still accountable for other claims not covered by the settlement.

How Foreclosures in Miami Can Get Assistance From The Settlement

The five banks listed above have agreed to provide about $25 billion for borrowers, states, and the federal government, which will be distributed over three years.

The $25 billion relief settlement is designed to assist homeowners remortgage their homes and for first or second mortgages, regardless of adverse credit ratings and will be allocated on the following:

Loan modifications

Up to $17 billion will go to loan modifications to provide immediate aid to homeowners needing loan modifications. This includes first and second lien principal reduction.

Refinancing

Up to $3 billion will be used for refinancing at lower interest rates.This will provide immediate aid to borrowers who are current, but have mortgages that exceed the value of their home/property.

Payouts

$1.5 billion will be handed out to eligible borrowers who lost their home to foreclosure, whose loans were serviced by one of the five mortgage servicers that are parties to the settlement. The payouts average at $2000 per borrower, and do not require any proof of financial harm.

Which Foreclosures In Miami Are Entitled To Assistance Under The Settlement?

To be entitled to the assistance:

  • Your loan must not be owned by Fannie Mae or Freddie Mac
  • Your mortgage must be serviced by one of the banks that are part of the settlement and are mentioned above.
  • You lost your home to foreclosure between January 1, 2008 and December 31, 2011.

The states covered by the settlement includes Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North dakota, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming. Oklahoma has negotiated its own settlement.

The National Mortgage Settlement may still be working out its details, but foreclosures in Miami will no doubt positively impact the foreclosure problem.

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