Mortgage loan modification no easy answer for struggling Miami homeowners

More than a third of the borrowers who have enrolled in the Obama Administration’s mortgage modification effort are no longer participating in the program, the Associated Press reported.

In determining how to avoid foreclosure or stop a foreclosure sale, your best option is to consult with a Miami foreclosure defense lawyer to discuss your rights. In order to properly stop mortgage foreclosure, all options need to be on the table. An experienced real estate attorney will be in the best position to assist in protecting your rights and the future financial well-being of you and your family.
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Our Miami Foreclosure Lawyer Blog continues to report problems with such programs. We reported in March that more than half of borrowers who enter mortgage modification are in trouble again within nine months. The unprecedented downturn in the real estate market means 1 in 4 borrowers owe more than their home is worth. This is particularly true in South Florida, which is among the most devastated regions in the nation. The median home values have fallen 28 percent nationwide to $165,100. In Florida, values have fallen by nearly half — 45.7 percent — the third-worst in the nation behind Nevada and Arizona.

In many cases, a mortgage modification will not be the best answer. The latest report on Obama’s program found that more than one-third of the 1.24 million borrowers who have enrolled in the $75 billion mortgage modification program have dropped out. Last month, 155,000 borrowers left the program, bringing the total to 436,000 since the program began in March 2009. That exceeds the total number who have received modifications and remain current on their loans — about 340,000 borrowers are still paying on time after a loan modification.

Economists believe the majority of those seeking mortgage modifications will end up in foreclosure, which could slow the broader economic recovery. One of the reasons for the high failure rate is that the administration pressured banks to sign borrowers up without proof of income — one of the issues that got us in this fix in the first place. When banks later moved to collect such information, many borrowers were disqualified or dropped out of the program.

If you are facing foreclosure in the Miami area or are seeking home-loan modification in South Florida, contact Barakat, Jacobs & Associates for a confidential appointment to discuss your rights. Call (305) 350-5055.