Repo Homes Blog

The Florida Supreme Court’s task force on residential foreclosures has recommended mediation on all foreclosure cases involving primary residences. The task force also suggested that judges should expedite all cases that deal with abandoned, vacant foreclosed bank owned properties.

The task force’s recommendations will be submitted to justices in Florida. According to industry analysts, justices have been seeking ways to help the state court system deal with the backlog of foreclosure cases resulting from the economic downturn and the collapse of the housing market in Florida.

But the 15-member task force did not recommend recruiting additional staff and judges. The task force, headed by Circuit Judge Jennifer Bailey, noted that it should not be expected that the recommendations would be funded given the current financial situation of the state.

The task force recommended dividing all foreclosure cases on the court into three categories, namely primary homes or homesteads, abandoned and vacant properties and others. It suggested that mediation should be mandated for primary home or homestead foreclosures unless borrowers and lenders agree not to or a pre-lawsuit mediation had been carried out.

Industry experts praised the idea of expediting abandoned and vacant foreclosure cases. However, they anticipated more delays on homestead foreclosures due to mandatory mediation. Some experts said that requiring mediation for homestead foreclosure cases is not advisable and will just result to more delays.

Meanwhile, members of the task force were impressed by the experimental managed mediations conducted by the think tank institute, Collins Center for Public Policy in three judicial circuit courts that have jurisdiction on Miami-Dade County, western Panhandle and southeast Florida counties of St. Lucie, Martin, Okeechobee and Indian River.

According to market data, the mediation in these areas resulted to a settlement rate of 73 percent. The rate increases to 79 percent if cases were settled by way of foreclosure counseling and before formal mediation.

The task force also suggested that lenders shoulder the initial fee required for managed mediation. However, it recommended that the state try to explore some government funding sources. Under the others category, the task force recommended that both borrowers and lenders split the cost of mediation.

Other recommendations by the task force include creating a centralize foreclosure Web site that will provide pertinent and basic information, adopt standard forms and procedures, promote consumer awareness on how to avoid foreclosure fraud and aggressively prosecute unethical lawyers.

A law that will encourage people to rent foreclosed houses is under attack from some industry experts who questioned the method used by the federal government in handling the housing market crisis.

The Neighborhood Preservation Act is one of the efforts of the federal government to reduce the number of foreclosure properties across the country. Foreclosed homes are pressuring down home values, resulting to a growing number of homeowners who are underwater, meaning they own properties with value less than the amount of mortgage they owe on them.

And study showed that underwater homeowners have the tendency to walk away from their properties, leaving them for lenders to foreclose.

Under the law, Federal Deposit Insurance Corp.-insured banks are allowed to rent out foreclosure properties for at least five years. Proponents of the law said that allowing banks to rent foreclosure houses for as long as five years would help in reducing the number of foreclosure homes for sale and stabilizing home prices.

The law also allows previous owners to lease their foreclosure properties. But the Center for Economic Policy Research argued that the law would not protect homeowners because it is the banks that will decide whom they want to rent on foreclosed properties.

Opponents of the law pointed out that homeowners should always be given the opportunity and the right to remain in their properties as tenants who pay the fair market rent. They added that giving homeowners the opportunity and right to rent their distressed properties would give them housing stability and security.

Opponents of the law also said that the measure would not work favorably on homeowners who want to modify their loans for affordable payment terms. They said that banks would not take the time and trouble to help distressed homeowners modify their loans because they would rather rent them out to them.

Some industry experts favor the method of renting foreclosed properties as a way to help financially-strapped homeowners who are at risk of foreclosures. They said that the law gives additional reason for banks to delay foreclosures as many of them do not want to act as landlords.

But proponents of the law countered by saying that vacant, bank foreclosure homes do nothing good on neighborhoods, adding that it is better for them to be occupied by anyone rather than leaving them standing vacant.

An outreach program has been launched to help distressed homeowners in Chicago, Illinois avoid bank foreclosed homes. Illinois Governor Pat Quinn announced the outreach program which will provide guidance to homeowners in danger of foreclosures who want to apply for the Making Home Affordable Program.

The Obama Administration’s loan modification program aims to help distressed homeowners remain in their properties by altering their mortgages into affordable payment terms.

According to a press release from Governor Quinn’s office, Chicago distressed homeowners will have an opportunity to receive financial counseling for free at the Cicero Community Center on August 29.

The Keep Your Home program will be manned by real estate lawyers who will offer their services for free and housing counselors certified by the U.S. Housing and Urban Development (HUD). They will help review documents that will be submitted by distressed homeowners on site to evaluate if the borrowers qualify for reduce mortgage payments under the federal modification program.

Borrowers who may qualify to receive lower loan payments must be behind on their mortgage payments, primary owners of the one-to-four room property, should owe no more than or equal to $729,750 on single-family houses, have loans originated on or before December 31, 2008 and have an income enough to pay the monthly mortgages.

Homeowners who are interested to avail of the loan modification program are required to bring and submit several documents, including proof of income, pay stubs of the most recent mortgage payments, recent tax return, recent first and second loan statements, updated bank statements, credit cards, car loans or student loans, monthly payments on other debts such as property taxes, homeowner’s association fees, homeowners insurance, recent utility bill and for self-employed, a profit-loss state.

The Illinois Housing and Development Agency (IHDA) has partnered with the Chicago Community Trust, Attorney’s Title Guaranty Fund, Neighborhood Housing Services of Chicago and West Suburban Communities to present the outreach program.

Early this year, Quinn signed the Homeowner Protection Act, a law that provides a 90-day grace period on foreclosures for distressed homeowners who avail of housing counseling. Homeowners who qualify for loan modification during the event will see their applications completed and sent immediately to loan servicers.

Homeowners can expect their mortgage payments to be lowered to not more than 31 percent of their gross monthly income.

Last month, the number of failed home loans in the United States rose to record high despite efforts in the state and national levels to curtail the foreclosure crisis which devastated the economy and the housing market.

There are lots of valid reasons why it is now the best time to buy a foreclosed house for sale, a new home or an existing home in Alpharetta, Georgia.

Despite the increase in sales of existing homes in Florida in the second quarter of this year, the median price in the region continues to drop, according to an industry survey.

A total of 80 families in Connecticut were able to save their houses from getting sold at foreclosed homes auction through the help of the statewide Mortgage Crisis Job Training Program which was launched in June 2008.

Foreclosed home search are best done on areas with high home sales because low-priced foreclosure properties can be found there, according to industry experts.

Commercial real estate developers have been diversifying their operations to cope with the downturn that has clobbered commercial properties.

The housing market in the Michigan city of Detroit is showing some signs of recovery, according to industry analysts. They noted the marginal decline in property prices, rising home sales and reduced inventories as indications that the housing market is stirring from its deep slumber.