Florida Lenders Meet to Solve Problem of Foreclosed Homes

by Peter Vernon on States

Homeowners in Florida are hoping new efforts by the state to help them prevent their houses from becoming foreclosed homes will push through.

Florida’s chief financial officer Alex Sink has set a summit on April 20 in Tampa for the 12 largest mortgage lenders in Florida to discuss how the lenders can solve one of the homeowners’ biggest blocks to loan modification and foreclosure prevention–the failure of lenders and borrowers to identify whom the borrowers should negotiate with.

Because many mortgage loans were packaged as securities and sold and resold to various investors, it has become difficult for the borrowers and lenders to identify the real owner of the loans, thereby delaying borrowers from negotiating for loan modification and increasing the number of foreclosed homes.

According to the Florida Bar Foundation, 25,000 homeowners have already called its hotline since it was launched in June 2008 asking for help to prevent their homes from following the fate of foreclosed homes. Florida’s volunteer lawyers have helped a lot of these callers, but many of those borrowers whose mortgage loans cannot be traced to their real lenders have not been helped.

Among these borrowers whose mortgage loan owner cannot be traced is 83-year-old Daniel represented by lawyer Jamie Ito. Daniel said he has always been independent, and has nowhere to go, so his top goal these days is to save his house from being added to the unending lists of foreclosed homes. His lawyer said they have been sending documents to companies they have traced to have connections to Daniel’s loan; but when they make follow-ups, the companies say their sent documents are nowhere to be found.

Florida’s volunteer lawyers are asking the mortgage lenders to appoint a point person whom the lawyers can contact to resolve problems related to the ownership of certain mortgage loans.

In response to the issue, the mortgage bankers said they also want to help distressed borrowers, as large numbers of bank foreclosed homes also batter their books, but they admit the sale and subsequent resale of mortgage securities has made loan modifications difficult.

Florida financial chief Sink hopes that the summit will enable the lenders to discuss mortgage issues and how they can help solve Florida foreclosures and help prevent the eviction of Floridian families from foreclosed homes.