Miami Foreclosure Victims Allowed Longer Stays in Defaulted Homes

In a rare ray of sunshine for those facing foreclosure in Miami, banks are increasingly allowing owners who are months or even years behind on their mortgage to remain in their homes – for now.

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Our Miami foreclosure defense attorneys know that for many clients, this is the tenuous thread between an unstable living situation and homelessness.

The New York Times has reported that while this practice is helping to keep some neighborhoods afloat, it is slowing the overall foreclosure process. Although, let’s face it: It was moving far too quickly anyway. The banks have shown tenacious aggression in moving forward with tactics that were questionable and unethical at best. These include the assembly-line “robo-signing” techniques that churned foreclosures through the court system faster than they could be appropriately reviewed. This resulted in scores of individuals losing their homes to financial institutions that had no right to seize it. The government has attempted to remedy this with a multi-billion dollar settlement agreement among 49 states and the five biggest violators of this practice. But really, that only scratches the surface of the problems in the process, which is plagued with loopholes and is slanted in Wall Street’s favor.

What’s more, it was greed on the part of banks that allowed the bubble to balloon to the size that it did by selling homes to Americans at outrageously inflated prices that they could never have afforded.

So the fact that banks are now taking a somewhat softer edge with homeowners who are underwater seems a small peace offering.

The Times reports that many banks are offering to let owners stay long after defaulting, and even pay for home insurance, while the family covers the cost of utilities. Other banks have taken to tacitly looking the other way, delaying official foreclosure sales for longer stretches than would have otherwise been the norm.

Part of that, though, is less likely a measure of altruism and more likely an illustration of how wide the problem is. Throughout the nation, RealtyTrac reports that some 650,000 homes were in limbo as of the end of January. Another 700,000 more are steadily moving through the process.

As the Times put it, “When the housing bubble burst almost six years ago, millions of Americans were forced to vacate their homes within months of defaulting, in a system that worked like an eviction mill, often resulting in vandalized properties and bitter feelings between banks and borrowers.”

Indeed.

What’s more, many cities and states are cracking down on getting banks to keep up with properties that are foreclosed, citing overgrown weeds and grass and general disrepair are a stain on the neighborhood. With someone in the home, though, that kind of blight is less likely, even if the person in the house isn’t invested in maintaining it long-term.

Still there are some who believe it is a bit too little too late. Given the role of financial institutions in the current crisis, this is a courtesy banks should have extended to many more homeowners years ago.

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.

Additional Resources:

When Living in Limbo Avoids Living on the Street, By Susan Saulny, The New York Times

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