Hot plans are afoot to solve the foreclosure problem in South Florida. The authorities in Broward and Palm Beach counties have been awarded $104 million to tackle the menace of vacant foreclosed houses and find new owners.

The scenario in South Florida is grim – many are forfeiting their houses to foreclosure and do not have the funds to buy a new house But with the way things are moving some like Katie Cole are beginning to nurse hopes that they can once more become house owners.

A single mother managing three children last January she was lucky to get a job screening passengers at the international airport nearby. This steady job makes here eligible under the affordable housing plan. On the very month of getting her job she has applied for assistance.

The residents in South Florida are applying for assistance from various plans that have been floated by the federal government. The aim is to help the states and the cities to buy vacant foreclosed house, repair them and then either sell or rent them out to proper candidates. For this $104 million has been given to the authorities in Broward and Palm Beach counties. With value of property plummeting and the region being dotted with vacant houses the situation has lately been getting from bad to worse. The plan hopes to once more people the area and make the units productive and tax producing.

The measure will be benefiting those with low to middle income. The authorities have to disburse the funds within 18 months of receipt of the same and to complete the programme within a span of four years. There is no dearth of eager buyers applying for the scheme.

In 2008 there were 47,387 foreclosure postings in Broward County. This was 128% spike from the previous year when the figure noted was 20,805. Palm Beach County noted 23,399 foreclosures in 2008 marking an increase of 97% from 11,904 foreclosures noted in 2007.

Since the start of the programme residents have been flocking to Coral Springs, Miramar, Tamarac and Sunrise to avail of the scheme. This year there have been hundreds of applications. No more are now being accepted. The latest counties that have started people to apply are Pembroke Pines and Boynton Beach.

The conditions the buyers are those whose earnings are not more than 120% of the median income of the county. Some units will be reserved for those whose earnings are very low.

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In some special zones like Homestead and Florida City, nearly 25% of the residential houses are in foreclosure. Many others that were being built by developers sit eerie and vacant in subdivisions that look ghostly; no buyers come knocking.

Ordinary hard working people are wondering here as elsewhere in many foreclosure stricken parts of the country how they landed up in this mess?

In 2006 Jose Reina was one of the many who thought it great to buy a house in a subdivision of Homestead – The Oasis. At that time the market was just going up and up. But in 2009 Jose is sobered and wants to sell and live in rented quarters elsewhere. The amount that he is paying as mortgage would enable him to rent a mansion in some other place.
The problem with Jose, who is a police officer working in another city, is that he cannot find buyers for his house for which he had paid $352,000 and then made many costly additions and alterations. Just opposite to his residence is another house that is the split image of his own. The bank is trying to sell it for the rock bottom price of $147,000 but cannot find buyers.

Jose is resigned to the fact that it may be decades before the value of his house returns to the amount for which he bought it. He tried to work out a negotiation with the bank but talks failed. Meanwhile the increasing numbers of vacant house surrounding him are causing him worry. Soon the locality will become unsafe to reside in.

Alan Fargo clicks on his computer trying to draw similarities between the housing catastrophe in Miami-Dade County and the corridors of power in Wall Street and Washington. Fargo resides in Coral Gables – a suburb of Homestead and contributes to a popular blog – Eye on Miami. From 2006 he has been combing through public papers and made note of the bank frauds and corruption that dominated the scene just prior to the financial meltdown. The stuff he writes is depressing and this makes him wonder about its readability. But the next moment he reasons that somebody has to bare the truth.

Via

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Sanchez’s group is the biggest and most powerful banking institution in Florida. He said that they were willing to consider modifying loans of house owners but not those of speculators. After the meeting Sanchez said, “Anyone who’s behind in payments please contact your bank ASAP. The banks will work with you to keep you in your home. If you have three Lexuses or three Mercedes in the driveway, we can do nothing to help those folks. Sanchez was of the view that those who purchased houses to speedily ‘flip’ them for sharp profits had been instrumental in creating the current foreclosure related crisis.

The governor commented that if the foreclosures were put on hold temporarily then the ball would be in the court of the lenders. The governor will have to say what will be done when the time expires. He added, “But at least during the holidays I think it’s important that we show compassion to Florida’s families as much as we can.”

Many of the borrowers in Florida are already benefiting from a moratorium that has been declared in the previous week by the mortgage giants – Fannie Mae and Freddie Mac. They have also put on hold during the holidays foreclosure proceedings. After January 9th, they would again take up the matter in due course.

Crist is not yet sure as to whether foreclosures can be forcibly halted by means of an executive order or whether a court injunction would be required. But he said that he would be happy if the lenders came forward to help of their own accord. He added, “That’s why I wanted to meet with Alex this morning and get an opportunity to take their temperature on their willingness to help us out, help Florida out.” However he admitted that the moratorium would extend to only those who were current occupant/owners of the houses and not to investors and speculators seeking to get a profit.

Florida ranked third with the highest foreclosure rate in October 2008 with the proportion being 1:157. In Nevada and Arizona, the foreclosure rate is approximately 1:74 and 1:149 respectively.

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In Charlotte County help is being given by The Housing Corporation that is a non-profit body. At the moment it is assisting 200 clients. Christine Dunbar, the chief operations officer of the concern strongly suggests that the victims should contact them as soon as they begin to feel that they cannot carry on with the loan and not when they have actually started to fall behind. There is a world of difference between a potential defaulter and an actual defaulter. The first thing to do is to contact the lender directly. Sometime the banks have in-house programmes to help the people. Usually an appointment is given and a bunch of papers sent with information so that the borrower is in a position to know about the problem to be discussed and its various nuances, well ahead. The clients will have to provide details of income, tax refunds, tax bills, bank statements as well as mortgage papers.

The first thing is advice about budgeting – balancing income with expenditure. Extra funds located will have be directed towards mortgage payments. A review of income and assets will have to be made. This will bring to the surface the root cause of default – whether mismanagement of finances or more serious actual inconveniences. Having gauged the situation the counselors will then intervene on behalf of the clients and talk with the lenders. Different options will be given to the client. To say the least it will take about a month for things to get started. Identifying and contacting lenders is a big hurdle. It is for this reason that outside professional help is required.

Dunbar warned that one must be prepared with the reality that not all the foreclosures can be stopped. A small fee may be required for credit counseling but nothing is required for foreclosure matters.

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The Governor, Charlie Crist is said that this one simple step will go a long way in alleviating the crisis. It will open communication lines between lenders and borrowers – something that is lacking today. It is a known fact that most of the lenders do not contact the lenders even though foreclosures are knocking on their doors. Counseling will provide for more awareness and financial education. The sufferers will know that there are many alternatives to choose from. Foreclosures are not always inevitable.

The grant emanates from the National Foreclosure Mitigation Counseling Programme. The amount is more than double of that which had been sanctioned in 2006. It is expected that nearly 25,000 house owners cowering under the threat of foreclosures will benefit from it.
Recently Crist had organized a task force including representatives from the mortgage and banking industries to work with consumer advocates for the purpose of compiling an in-depth study of the foreclosure issue. It is expected that shortly after the middle of April the body will submit its findings and related suggestions.

The foreclosure crisis is no longer confined to the lender borrower zone – it has spilled over to cloud the entire socio-economic structure of the nation. There are strong rumours about recession as stocks tumble and unemployment rises. The lenders are weighed down with too many properties that do not fetch money but rather take out money as the foreclosure is a time and money consuming process. Too many houses for sale means prices of neighbouring houses are also falling making it a buyer’s paradise. But from where will the buyers get the required loan to buy houses? The mortgage companies facing a cash crunch are in position to advance loans. The housing industry is in the doldrums and this is having a chain effect. Abandoned houses are attracting criminals and prostitutes. Efforts are being made at the local, state and national level to solve the problem. Community representatives are pitching in but it requires a lot of tight rope walking. The powerful lending bodies cannot be alienated without touching basic principles. On the other hand disgruntled vote banks are dangerous for politicians and their power games.

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