In a previous post we discussed the problem of zombie foreclosures in Florida. The problem of these lingering foreclosures has persisted, and experts now estimate that over 300,000 homes are in a state of partial foreclosure, which adds up to more than one-third of all foreclosed properties in the United States.
The state of Florida has the highest number of houses that are vacant while they are in some stage of repossession, according to a recent analysis by RealtyTrac. These vacant houses, known as "zombie" foreclosures, are troublesome to the local housing market since they are not marketable yet and also not being cared for. The total number of zombie foreclosures in Florida was 90,556 during the first quarter of 2013.
We've been discussing the multibillion-dollar settlement between the country's biggest banks and financial regulators a lot on this blog. The settlement will affect Florida borrowers who qualify under certain categories, including those who were erroneously foreclosed upon or who were unfairly denied loan modifications. As a part of the settlement agreement the banks have been reviewing records and filing new information about lending and foreclosures to regulators, and it recently became clear that one group that was significantly affected by bad bank practices were members of the military serving on active duty.
One out of every 32 homes in Florida faced a foreclosure action last year, according to data recently released. The Sunshine State endured significant economic hardship during the recession and the housing market has been slow to recover. Last year's foreclosure rate was the highest in the nation.
A new set of regulations finalized by the Consumer Financial Protection Bureau will require mortgage servicing companies to treat borrowers more fairly.
The relaxed borrowing standards used by banks before the mortgage bubble burst seems like a distant bad dream at this point, but the reality is that for many Florida borrowers, that irresponsible lending has had lasting consequences. While many banks have voluntarily gone back to more sensible practices (like verifying income on credit applications), regulators knew it was time to set stricter laws to prevent mortgage lenders from making the same mistakes twice.
The last-minute budget deal that lawmakers managed to piece together in the first days of 2013 to (partially) avoid the fiscal cliff did include an extension of the Mortgage Forgiveness Debt Relief Act. We've written about this law in the past, as it allows borrowers who have gone through foreclosure to avoid paying income tax on forgiven debt. Without the law, forgiven debt was treated as income and often substantially increases the tax bill for people with lower incomes and a large amount of forgiven debt.
The rhetoric around the fiscal cliff and the federal budget negotiations has gotten quite heated in recent weeks, as lawmakers from both sides of the aisle try to find a way to balance the budget. Regardless of one's political party, most Florida readers know that much of the negotiation being done is around the tax code. Many lawmakers are pushing to simplify the tax code, but there are differing opinions about the best way to do that.
According to a recent report by a consumer credit website, the average balance for a mortgage in the state of Florida has decreased by about $3,000 over the past year. This is good news for borrowers in Florida, who, like homeowners across the country, have been struggling with adjustable rate mortgages and balloon payments.
Government-backed mortgage companies Fannie Mae and Freddie Mac have released a statement saying that they will pause evictions from two-to-four unit properties as well as single family homes during the remainder of the holiday season. The temporary hold will be in effect from December 17th until January 2nd.
For families facing foreclosure and worried about trying to find a new place to live, this will be a welcome relief. With businesses closed and many people on vacation during this season, it can be very difficult to find a new place to live towards the end of the year.