August was a rough month for many American families. Lenders took back more homes in August than in any other month since the start of the mortgage crisis, according to the USA Today. Although properties entering foreclosure have decreased, home repossessions are increasing. In total, lenders repossessed 95,364 properties in August. This denotes a 3% increase from July and 25% from August 2009.
The Miami lawyers at Alvarez & Barbara, LLP, are on your side. We are experienced trial attorneys who will help you understand your rights and options under Florida and federal foreclosure laws.
The increase in repossessions can be attributed to banks trying to clear out their load of bad loans with the prospect of eventually putting the foreclosed properties on the market. However, they can’t afford to just put all the properties on the marked. Lenders are concerned that if they dump all these properties onto the market, the housing market could stumble once again. This may explain why less than one-third of bank-owned properties are on the market.
There is a silver lining to this dark cloud though. Since lenders don’t want to put these homes on the market, they have slowed the foreclosure process. This means borrowers who are in default can stay longer in their homes. To put things in perspective, the number of initial default notices sent in August 2010 is 30% less as compared to August 2009. Moreover, the rate of initial default notices being sent out has fallen on an annual basis over the last seven months.
Apart from the foreclosure, many borrowers are attempting to modify their loans hoping to prevent foreclosure. But this remedy hasn’t worked perfectly. Many homeowners don’t qualify and others simply fall back into default. The loan modification process can be long and tedious because of the amount of back and forth communications a borrower must have with their lender.
Others face a different problem. A man in Winter Garden, Florida was one financial information packet away from a permanent loan modification after going back and forth with his bank for more than a year. However, the modification never went through because his loan was transferred to another entity. Now, he must pay up his arrearage or face foreclosure.
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We have been successful in defending many foreclosure cases when given an opportunity to develop a plan to properly defend the foreclosure.