By Michael J. Merrill
The recent foreclosure settlement signed by 49 Attorneys General and five mortgage servicers was a significant step towards assisting homeowners with their foreclosures. Of the approximately $25 billion to be paid by the mortgage servicers, Florida stands to receive $8.4 billion, one of the larger shares of the settlement. Some homeowners, however, feel not enough was done by the states in negotiating the foreclosure settlement. Bloomberg spoke with Cheryl Alexander, a Cape Coral homeowner, who stated “These are fraudulent bankers and Wall Street gangsters who have to pay for what they’ve done.”
The terms of the foreclosure settlement vary from state to state. Pam Bondi released a statement stating Florida’s share of the settlement would provide for approximately $7.6 billion going towards loan modifications, including principal reductions. Another $170 million will be available for cash payments to Florida homeowners who have already lost their homes. These cash payments are estimated to be $2,000 each, which would cover 85,000 Floridians whose homes were sold through a foreclosure sale. During the four year period, however, 444,967 foreclosure sales were completed. Another $309 million of the settlement will assist homeowners with refinancing properties which are underwater. Finally, $350 million will be paid directly to the state.
Pam Bondi stated homeowners have been helped more with a settlement than if the states had taken this case to court. While this may be true for the percentage of homeowners who will actually receive a portion of the settlement proceeds, the larger majority who will receive nothing tangible are left in the same position as if the case had never occurred. The hope will be this settlement is simply a stepping stone towards helping all distressed homeowners with obtaining resolutions.
