Florida banks, BankUnited of Coral Gables and BankAtlantic of Fort Lauderdale have announced a temporary foreclosure moratorium for all loans that they owned and serviced until such time that the Obama Administration has finalized its recovery program for the housing market.
The announcements were made after major banks Morgan Stanley, JPMorgan Chase and Co., Bank of America Corp. and Citigroup Inc. and government-owned mortgage giants Federal Home Loan Mortgage Corp. and Federal National Mortgage Association decided to temporarily stopped foreclosures on mortgage loans they owned and serviced.
The duration of the moratorium on foreclosure is dependent on measures contained in President Barack Obama’s economic recovery plan, details of which will be outlined in his speech in Arizona, one of his stops on his road trip to gather support for his stimulus bill.
BankUnited and BankAtlantic are both hopeful that they would learn soon about Obama’s $50 billion recovery plan to help homeowners of repo properties.
BankUnited Chief Executive Officer and President Ramiro Ortiz said that the bank wants to reduce the number of Florida foreclosures. He is hopeful that the Department of Treasury’s recovery plan will provide an alternative for homeowners to help them avoid losing their homes to foreclosures.
According to Ortiz, the bank’s moratorium program will cover 1,400 homes in Florida, with about $426 million in mortgage loans.
Attorney Anne L.Weintraub explained that banks are trying to find ways to avoid foreclosure because, aside from the high costs involved in taking over a property, they do not want to be managers of abandoned and vacant properties.
Florida banks have shouldered most of the burden of the housing crisis. In 2008, out of the 13 banks that failed, two were located in Florida.
JPMorgan Chase plans to open five financial counseling centers in Florida where distressed homeowners can seek advice on how to avoid losing their properties.
According to RealtyTrac, Florida has the second highest foreclosure rate in the country.
The total number of homeowners who lost their properties in 2008 was 385,309 or 4.52 percent, an increase of 133 percent from 2007. Florida, along with Arizona, Californiaand Nevada, accounted for nearly 50 percent of the country’s total foreclosures in 2008.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.
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