First some good news, if you’ve got an underwater mortgage owned by Bank of America.
BofA has come to a separate agreement with the US government to to help reduce some the fines it owes to the Housing and Urban Development Agency from last month’s huge settlement.
Bank of America has agreed to cut the principal of more than 200,000 underwater loans, and they are cutting them by an even larger amount than the other 4 banks. In exchange they’ll owe about $850 million less in fines.
If you’re a Bank of America customer (and the loan has to be owned by them, Fannie and Freddie loans don’t count) and you qualify, you will have the opportunity to cut your mortgage balance to your home’s current value.
The reductions will average more than $100,000, according to the Wall Street Journal. This is big news because the settlement only promises to reduce the principal of eligible loans to 125% of their current value.
Bottom line, that’s 200,00 homeowners who won’t be underwater anymore and will have a real chance of staying in their homes. But I wish the other banks would step up and follow Bank of America’s lead.
Now here comes the bad news, for Florida homeowners facing foreclosure. We could be seeing a return to the days of Florida’s infamous ‘rocket docket’ if the state legislature approves a one time $4 million stipend which will allow Florida’s court to hire more judges and case managers for the foreclosure courts.
Legislators are considering this as another way to speed up the foreclosure cases currently backlogged in the courts.
While this is a better option than the proposed Florida Fair Foreclosure Act, here’s the problem. While they’re talking about hiring more judges, they’re slashing a substantial chunk of the budget (about 31 million statewide) to the Clerk of Courts.
You know, the people who process all the paperwork and assist the judges during the foreclosure process. So how exactly do they plan to speed up the system when they are taking out the court’s infrastructure?
It’s a clear case of robbing Peter to pay Paul.
So let’s get back to some more good news coming out of the mortgage settlement. Another group of foreclosed homeowners are being targeted for substantial financial relief, and there’s probably no one more deserving.
I’m talking about our nation’s military.
As part of the settlement, all of the lenders plan to identify service members who’ve been wrongfully foreclosed on since 2006. Each bank will review every foreclosure of an active service member, and if it violates the Servicemembers Civil Relief Act, they will receive $116,784 as well as a refund of any lost equity plus interest.
The settlement will also prohibit any active-duty military from being foreclosed on while serving in a combat area.
Really it’s sad that it took the settlement to set these protections in motion.
Have a Good Weekend and We’ll See You In The Trenches!
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