Tag Archives: Bank of America

Although the whole of America has encountered mortgage difficulties due to the economic crisis, it seems that now – especially for those in the South Florida region – there could be room for optimism.  Figures are indicating that, in recent times, fewer homeowners are facing the dreaded prospect of foreclosure, thanks in large part to the recovering economy, but also due to government-backed and other programs offering assistance.

For example, the Bank of America has been extending its financial supportive hand, and the results have been very positive.  Indeed, the numbers speak for themselves: in June 2011 there were 30,000 of “seriously delinquent mortgages” in South Florida and now – in August 2012 – this figure has dropped to 12,000 – a staggering 60 percent decrease.  BankUnited and Chase can also support the occurrence of a similar reduction in such numbers, most notably since 2009.

Since banks in the region have been particularly helpful, this has made a huge difference. Indeed, just a few months back, the majority of states in the nation made a $25bn settlement between Ally Financial Inc., Bank of America, Citigroup Inc., JPMorgan and Wells Fargo & Co.  As part of this, Bank of America wrote letters to 200,000+ mortgage holders (primarily in California and Florida), offering assistance. Other programs include the Home Affordable Modification program (offered by the federal government) that could lead to a reduction in monthly payments for some mortgage holders, as well as 46,032 trail/permanent modifications in Florida counties from various lenders.  Lenders thus seem to be making major efforts to help tackle the area’s “housing debacle,” rather than continue with its prior attitude of jumping to foreclosures. There has been a clear increase in banking flexibility, with some evening forgiving principal.  In addition, according to RealtyTrac, in the Miami-Fort Lauderdale-Pompano Beach region, foreclosure filings dropped 15 percent in July 2012 from their substantially higher figure in July 2011

Getting the Whole Picture

So while this all sounds extremely positive, why is it that homeowners in the South Florida region still seem to be struggling?  Is this the whole picture?  There are those in the industry who are not convinced Bank of America has made such a significant drop with over a third of homeowners no longer at least 60 days delinquent in four months.  Indeed, some have even suggested that the picture isn’t positive at all and that all the Bank of America is doing is merely unloading problematic mortgages to other servicers.  Although, having said that, the Bank has received around 10,000 requests from homeowners at their offices over the last two years, to which it has responded.  And for those who still feel they have not received the help they need, there will be a Bank of America free event next week to further extend a helping hand to struggling homeowners.

Further, there is still a large amount of Florida homeowners facing foreclosures.  Indeed, the figures show that one out of every 352 Florida homes is currently at some stage of foreclosure, according to figures from RealtyTrac.  This could be – at least in part – due to a revival in banking activity that, during litigation from state attorneys to protect consumers, had been delayed.  Now that these have been settled, banks are picking up again on long-overdue mortgages.  As well, even RealtyTrac – despite the positive trends it has witnessed – predicts an increase in foreclosure activity in the next few months.

Perhaps these facts shouldn’t come as such as a great surprise though, given that, according to a recent survey undertaken by Bankrate, Florida comes in at Number 4, for the country’s highest mortgage costs.  Given that the average cost for origination, title and closing in America is $3,747, Florida’s average of $4,395 is substantially higher, thus having the potential to cripple way more homeowners as they struggle to pay off their mortgages in troubling economic times.

So while there are definite improvements in America’s overall situation for homeowners – and indeed perhaps even more so for those residing in the South Florida region – there is still an undeniable amount of uncertainty putting pressure on these mortgage holders, that needs to be addressed.