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.
One Florida woman who attended a recent debate said she tried to reduce the mortgage on her home six times before the bank issued a foreclosure notice. She said the banks have the capacity to offer loan modifications and asked presidential candidate Mitt Romney why loan lenders hadn’t been forced to allow such modifications.
Romney expressed his sympathy toward the woman’s plight, but he didn’t agree that the government should make banks allow more mortgage modifications.
The issue of mortgage loan modification is controversial among politicians who are adamant about minimizing the government’s role in the economy.
A representative from the Center for Responsible Lending disagreed with Romney’s view. She said that economic recovery likely won’t happen until lenders begin modifying loans or writing off debt. “Economists on all sides of the political aisle seem to agree that we really have to do some principal write-downs,” she said. “We need to modify people’s loans.”
In Florida, where reportedly 1 million mortgages are in trouble and 2 million more are “underwater,” homeowners will want to explore all of their legal options for enacting a loan modification that ensures that a hard-earned nest egg doesn’t end up in foreclosure. Consulting with a legal professional who works in real estate law may ultimately result in some much needed relief.
Source: theledger.com, “GOP Candidates Offer Few Solutions for Florida’s Mortgage Collapse,” Zac Anderson, Jan. 25, 2012