Families throughout Florida and the United States have struggled for years to make ends meet during a deep recession and a lackluster recovery. Many homeowners currently have no equity – if they can no longer afford their homes, they face foreclosure or a short sale. Others, even if they are lucky enough to have steady income from a job or public benefits, may still find themselves priced out of a decent home due to rising prices both on sales and rentals. Recent years have seen large numbers of families forced into foreclosure or bankruptcy as a way to regain control of their finances.
A bill recently signed by Gov. Rick Scott should bring some much-needed relief to Florida. SB 1852 will distribute $200 million to a number of programs designed to ease Floridians’ housing woes. The funds are part of a $25 billion settlement between 49 states and the nation’s five largest mortgage lenders – JP Morgan Chase, Citigroup, Wells Fargo, Bank of America, and Ally Financial – to settle allegations of improper lending practices. As one of the hardest-hit states in the aftermath of the housing bubble, Florida received just over one third of that, or $8.4 billion.
Most of that money will come in the form of modifications of the terms of existing mortgages and writedowns to their outstanding principle. The Florida government received a distribution of $334 million in April. Of that, $60 million was designated for assistance in paying down mortgages, and $73 million went to the state’s general revenue fund, where it may be spent on non-housing-related programs. The remaining $200 million sat in limbo for some time until Scott’s recent signature on SB 1852.
That legislation directs the funds to several different housing programs. The State Apartment Incentive Loan program will receive $60 million to help pay for rental homes for the elderly and disabled. The State Housing Initiative Program, which funds municipal efforts to help low-income homeowners keep and maintain their homes, will receive $40 million. Foreclosure courts will receive $40 million to help reduce the foreclosure backlog. Habitat for Humanity will receive $20 million. Domestic violence shelters and a program for housing the homeless will each receive $10 million.
This is all good news, but meanwhile, attorneys general in Florida and other states have received troubling allegations that banks are not complying with various aspects of the settlement. New York Attorney General Eric Schneiderman has threatened to sue Wells Fargo and Bank of America over concerns they are dragging their feet on processing valid and proper requests from homeowners for lower mortgage payments. Florida Attorney General Pam Bondi’s office has received 293 complaints of violations of the settlement and say they are investigating every one. Bondi said they are doing everything they can to hold the banks accountable, but stopped short of threatening a lawsuit, indicating that other legal processes must play out first.
O. Reginald (“Reggie”) Osenton is the Owner and President of Osenton Law Offices, P.A. If you need a Bankruptcy attorney in Brandon, Tampa lawyer, call 813.654.5777 or visit http://www.brandonlawoffice.com.