Fort Lauderdale Real Estate Law Blog

Florida homeowners have been hit particularly hard by the foreclosure crisis. Adding insult to injury in the eyes of some is a new bill some Floridian legislators are seeking to introduce that might allow for non-judicial foreclosures. Critics fear the law will help banks and hurt homeowners, but those sponsoring the bill argue that homeowners benefit from the law.

The term "non-judicial foreclosure" refers to the ability of lenders to foreclose on a property without having to go before a judge. The process creates a significant benefit to lenders because it is cheaper and quicker and allows lenders to get the home back on the market considerably faster. Homeowners, however, may lose many of their protections in the process.

South Florida residents may have paid attention lately to the campaigning politicians who came to Florida and addressed, among other things, the troubles of the state's housing market. Struggling homeowners in Broward County and throughout South Florida are looking for ways to prevent foreclosure or complete a real estate sale without losing their nest eggs. However, the debates may have demonstrated a rather large separation between the needs of struggling homeowners and solutions politicians are proposing.

Many Florida residents have criticized banks for not working with them to reduce mortgage principals and interest rates, and despite the views of some of the candidates, a lot of homeowners may face foreclosure unless the government intervenes to allow more mortgage loan modifications.

Buyers and sellers of residential real estate in Broward County will be interested to hear that, for the sixth week in a row, the mortgage loan interest rate averaged less than 4 percent. According to Freddie Mac, the average 30-year fixed-rate loan fell to an all-time low, at 3.89 percent, while the average 15-year rate dropped to 3.16 percent. The result? What you'd expect. More South Floridians have been applying for mortgages to take advantage of low interest rates. However, according to loan officers, personal debt, unemployment and the uncertainty of the current housing market are likely preventing many people from even applying for a mortgage.

A loan officer from Hamilton Group Funding of Cooper City said that people in South Florida are buying residential real estate but not at the pace one might expect, considering the record-low interest rates. The same officer said that he had seen a 10 percent increase in business in the last six months, but he suspects people are still holding out for when the housing market causes what is expected to be a rock-bottom interest rate for mortgage loans.

According to a recent decision involving mortgage lender Countrywide (now owned by Bank of America since 2008), over 200,000 African-American and Hispanic loan borrowers could receive between $500 to thousands of dollars in remuneration. A payment of $335 million is meant to settle charges of discrimination stemming from Florida's housing boom. Bank of America will make payments to borrowers nationwide, and thousands of people in South Florida are expected to receive compensation. It is likely that the lender's unfair practices against communities of color led to many needless foreclosures.

The U. S. Justice Department said the settlement is the largest in history involving fair-lending practices. The agreement came after a civil suit was filed, alleging that Countrywide charged minority borrowers inordinately higher interest rates and fees on mortgage loans. Bank of America has since stopped Countrywide mortgage lending.