subject: Home Foreclosure Florida: What The New Florida Foreclosure Law Means For Homeowners [print this page] According to the 12/29/09 online edition of the Miami Herald, foreclosing on a homeowner in Florida just got a little more complicated and costly for lenders. The article states in part:
". . . a state supreme court order issued today that aims to reduce a foreclosure overload. -- [a] statewide program . . . requires mediation on all homesteaded properties before a foreclosure hearing is held."
Basically it means that homeowners get to meet with lenders to discuss options other than foreclosure, ie, home loan modification or short sale is.
Other Particulars of this New Florida Foreclosure Law
Lenders are responsible for paying all mediation fees; these can be as much as $750.
Homeowners have the right to refuse mediation; they can also work out other options with their lender. However, every residential homesteaded property in foreclosure will be referred to this process as a matter of course.
Lawmakers hope that this new law will reduce the foreclosure case load in the state; a situation that has been referred to as "horrifying" by Florida's Task Force on Residential Mortgage Foreclosure Cases.
Will Mediation Help Florida Homeowners Facing Foreclosure?
Reaction to this new law signals what many homeowners have been shouting all along. Namely that until home prices stabilize, the courts won't work.
One commenter wrote, "Procrastination and disruption of the market correction by the courts wont work but rather make things worse. Home prices PLUS predatory property taxes, bloated insurance, and abusive HOA/maintenance fees still need to drop until reaching affordable income ratios and below rental values,...".
The problem with many who are facing foreclosure now is still jobs . . . or a lack thereof. Many who are losing their homes now didn't get subprime mortgages; they had good credit; and they didn't buy homes that they couldn't afford.
What they did do was lose jobs . . . and many have lost jobs that are not coming back. So unless this new Florida foreclosure law takes into account that many homeowners need some financial breathing room to get back on their feet, mediation is not likely to help.
The Credit Crisis Prolonging the Home Foreclosure Crisis
And, when you add in the fact that many who have managed to hang on to their jobs can't get home loans because of the credit squeeze, what you have is a lot of foreclosed homes that will likely sit on the market for a lot longer.
Need a Mortgage? Why Home Loans are Not Easy to Come by Now
Banks are skittish. After years of giving home loans to anyo9ne with a pulse (which is how this whole subprime mortgage mess started), they now require credit scores above 720 (and in some cases 75); down payments of 10-20% and longer stints of employment.
So for example, if a couple wanted to buy a $200,000 home, a 20% down payment means coming to the table with $40,000 in cash -- and this doesn't include closing costs and all the other incidental costs that crop up when you buy a house.
Who has that!
So while mediation may help some Florida homeowners facing foreclosures to hang onto their homes, there ain't a lot of hope until the jobs come back and people can get back on their feet financially.
