Spokespersons for Governor Charlie Crist announced that the governor is planning to get relief for Florida homeowners in trouble due to foreclosures. The plan is intended for desperate residents sacrificing everything they can to avoid foreclosures and not exorbitant Floridians who bought excessive homes during the housing boom years.
The plan would be based on California Governor Arnold Schwarzenegger’s proposal for a mandatory 90-day foreclosures moratorium. Crist’s proposal on the other hand would seek for voluntary participation from banks, and may not need state legislation should banks agree to the plan.
Thousands of Floridians reels from the staggering blow of foreclosures as the number of repossessed houses or REOs (Real Estate Owned) continues to increase astronomically. The tri-county area of Miami-Dade, Broward and foreclosed homes while Palm Beach County jumped 145 percent to 2,934.
Florida’s overall foreclosures trend doubled from 2007 to 2008 due to increasing cases of unemployment, a freeze on credit, and a significant drop in home values, which placed several homeowners underwater. This means the value of the home is worth less than what the homeowner owed on his mortgage. Experts are saying that this trend would continue to grow in 2009 unless a solid government intervention is in the offing.
The plans of these governors seeking for a moratorium for homeowners would provide families to work out a refinancing deal with banks and lenders to get mortgage payments going again.
The moratorium will also be beneficial to the banks, as it will decrease the number of REOs in their inventories, which the banks do not want. Schwarzenegger’s plan would provide an option for banks who do not want the 90-day freeze to cut interest rates for mortgages to lower the monthly payments down to affordable levels. In any case, residents desperately need these plans to go into action to keep them in their homes.
Leticia Carvalho has been educated in the finer points of the foreclosure market over 5 years.