Waiting on a Real Government Bailout For Miami Foreclosures? Don’t Bet On It

The New York Times reported recently it’s unlikely that Washington lawmakers will come up with a significant program to help homeowners struggling with foreclosure in Miami.

That’s not all that shocking, considering that the programs of the past have done little to help homeowners struggling with an underwater mortgage and in danger of foreclosure or strategic default. While the current administration has promised big results from its programs, there hasn’t been much help provided to struggling homeowners.
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Our Miami foreclosure defense lawyers believe and have seen proof that fighting a bank in a foreclosure case is much more efficient than waiting on a government handout. These programs have dedicated millions of dollars and yet little of it has been actually utilized to help modify loans or help people stay in their houses.

Because the programs have no teeth, banks aren’t required to use them and there is little incentive for them to do so. Rather, they believe they can make more money off a foreclosure than actually keeping a person in their house with a mortgage modification.

Taxpayers are rightfully skeptical about new government programs that promise to help homeowners. In the past, few have done so. In April, a program was designed to provide reparations to homeowners damaged by foreclosure abuse, but many officials believe it may do more harm than good.

An April program from the Office of the Comptroller of the Currency was borne out of consumer lawyers identifying forgeries and other problems with foreclosure documents filed with the courts by banks and representatives. It’s interesting to point out that it was lawyers, not bank regulators, that pointed out these massive problems.

More than four million homeowners were contacted and told they could end up getting some type of financial bonus for being trampled upon by the banks. This was after banks agreed to audit themselves. Lawmakers last month voiced doubt that the program would work and cautioned that there could be a conflict of interest among the consultants that were hired by banks to review the problems.

One researcher the newspaper talked to spotted a conflict after one hour of looking at documents, despite the comptroller’s office saying it closely vetted consultants to check for potential conflicts.

Others have pointed out that JPMorgan Chase hired Deloitte to audit its practices, the same company that audited Washington Mutual and Bear Starnes, two defunct firms. Both were later acquired by JPMorgan, so loans that could come under scrutiny would be done by the firm that audited their books.

Other problems pointed out by industry leaders is that the years under analysis are after when most subprime loans were sent into foreclosure and those homeowners who participate in the program are left unprotected against any future damage. Participating in the program could lead to a person giving up their rights to fight a foreclosure in the future. Also, participants could still lose their home to foreclosure even if they take part in a review of their case.

There are few solid programs that actually help homeowners. The only way to hang on to your home if it’s been hit with a Miami foreclosure is to fight back. Point out the bank’s faults in your case and hold them accountable to proving their case.

If you’re battling foreclosure in Miami or the surrounding areas, contact Jacobs Keeley for a confidential appointment to discuss your rights. Call (305) 358-7991.

More Blog Entries:

Florida Supreme Court to Consider Miami Foreclosure Case Rife With Fraudulent Documents: December 16, 2011
Miami Foreclosure Fraud Revealed in Grand Jury Testimony: December 14, 2011
Additional Resources:

Foreclosure Relief? Don’t Hold Your Breath, by Gretchen Morgenson, The New York Times