by Mike Sharkey
Staff Writer
There’s nothing remotely entertaining about foreclosure, a problem that’s affecting the entire nation, especially the state of Florida. Monday in City Council Chambers, the Florida Legislative Committee on Intergovernmental Affairs held its summer meeting with a full morning docket and an afternoon agenda dedicated solely to a panel discussion on the foreclosure problem in Florida and the Jacksonville area.
While there were small, inside jokes and the occasional laugh, the mood of most of the discussion was heavy — a mood that’s reflective of the current foreclosure crisis.
“According to the Mortgage Bankers Association, 11 percent of mortgages in Florida are in foreclosure,” said Rip Colvin, executive director of LCIA, which is chaired by State Sen. Tony Hill and includes legislators from all over the state. “There was a drop in foreclosures from April to May, but it is still up 50 percent from May of last year.”
On the federal level, foreclosure is being addressed through the Department of Housing and Urban Development.
“There are two programs,” said Michael Daly of HUD. “One is loan modification which reduces the payment via interest rate. We want to get the payment back to a typical ratio of 31 to 38 percent of the gross pay. There are currently 55,000 trial loan modifications and we hope they all go on to be viable.
“Two is refinancing. This is a problem the (Obama) administration is trying to solve.”
According to Daly, the national foreclosure problem stems from loan-to-value ratios that are so far out of whack there are no lenders willing to refinance the home. This makes foreclosure inevitable. Daly said many of the loan-to-value ratios far exceed 100 percent.
“If there is the potential for foreclosure down the road, we encourage you to get to your lender as soon as possible,” he said.
In Florida, the banks are willing to work with homeowners to prevent as many new foreclosures as possible, according to Anthony DiMarco, executive vice president of government affairs for the Florida Bankers Association.
“I represent the vast majority of FDIC banks in Florida,” he said. “From the smallest to the largest, they all say they are willing to modify their loans with homeowners. They want to make sure there is no fraud and there is an ability to pay.”
DiMarco is realistic, though. He says due to the fact a mortgage may have been sold many times over and other factors, not ever pending foreclosure can be prevented or even addressed.
“We are seeing more prime loans go into foreclosure due to job loss. That’s just part of the economy,” he said. “This was the perfect storm in Florida and there’s a huge problem with mortgage fraud. The last thing we want to do is foreclose. But, some can’t be saved.
“In the back of everyone’s mind is: if fraud was rampant going into the foreclosure crisis, fraud will be rampant coming out of foreclosure.”
Locally, Council member Kevin Hyde’s foreclosure bill has resulted in the City getting more involved once a mortgage hits the lis pendens stage. Hyde said the idea is to inform those facing foreclosure of their options and put them in touch with credible agencies — such as Jacksonville Area Legal Aid — to help prevent the bank from taking a home.
“People are so inundated with information,” said Hyde. “Some of it is phony or a scam and they are not sure which is credible.
“We are encouraging the local judiciary to adopt mandatory mediation. Obviously, funding is an issue. Mediation is required in other areas of Florida and we are looking to model ours after Philadelphia.”
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