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.
In a recent post we discussed the foreclosure settlement obtained by regulators after a long and contentious investigation and negotiation with the nation's largest mortgage servicing companies. The settlement will have a major effect in Florida, which will receive a total of $60 million out of the total $25 billion settlement.
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.
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.
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.
As we've discussed before, student loan debt has grown to record amounts in recent years. The Federal Reserve Bank of New York says student loan debt increased 4.6 percent in the third quarter and now sits at $956 billion. Shockingly, student loan debt has increased more than 56 percent in just five years.
A home is a sacred place for many people. For the elderly, it may be one last piece of a deceased spouse that they can hold onto.
A Florida couple has a new chance to keep their home after an appeals court judge overturned a ruling that allowed their lender to repossess their home. Repossession happens as a part of the foreclosure process after borrowers have defaulted on their mortgage. While lenders do have a right to repossession based on the mortgage, courts must review each case to make sure that banks aren't improperly depriving people of their property.
Many Florida readers know that a bankruptcy filing stays on one's credit history for up to ten years, and that the financial repercussions can last even longer in some cases. However, most people don't know that while they are on the road back to a clean credit report they may still be able to take out loans.
Florida borrowers face a more aggressive debt collection landscape in the event of a foreclosure than borrowers in many other states. According to a government report released on the state of government-backed mortgage companies Fannie Mae and Freddie Mac, it is legal and even encouraged for banks to pursue unpaid mortgage debt from borrowers who have been through a foreclosure.