Big Bank Settlement Might Not Help Those in Miami Foreclosures
For the better part of a year, the Obama administration has pushed state attorneys general to agree to a $25 billion settlement with banks, though it would do little to help homeowners stuck in Miami foreclosures, those with underwater mortgages or those that see strategic default as their only option.
This settlement will squeeze cash from the country’s biggest banks, but that doesn’t mean it’s going to trickle down to homeowners who really need it. The states and feds will take their share for their “work” on the case and then chunks of it will probably go into funds that the government can make interest from and eventually, some homeowners who have had their rights violated could end up with some money that probably won’t right the wrongs.
Miami foreclosure lawyers have been following this issue because it could be a major event in the foreclosure process for many Americans. If the attorneys settle, they will lose the ability to sue on many fronts, even if they later discover major violations that banks committed in their state.
A settlement also means that government agencies and their vast resources will be crippled in their quest to investigate these acts, which will make discovering what really happened more difficult. While the state and federal governments can subpoena information much easier, an individual homeowner would have to file a lawsuit, jump through legal hurdles and then spend the money to investigate their own case. The amount of information they could get would likely be very narrow.
The overarching concern here is that while banks are going to combine to dish out $25 billion, is it really going to help homeowners? Or, is it going to become a pawn in the political races that doesn’t actually provide anything for people who need the help the most.
About one in five mortgages are now under water, meaning the homeowner is paying out more for the house than it is actually worth. Many people in Miami are in this situation and it is very frustrating. For people who have job opportunities elsewhere, they may have to turn those down. Other people who had hoped to use their house to bring in a profit and use it as an investment no longer can hold out hope of that.
According to The Huffington Post, the banks would pledge a certain amount of money that is supposed to go to homeowners. But the banks would get credit for helping borrowers who owe less than 175 percent of the value of their houses. The newspaper quoted sources that said the Obama administration is giving states a hard deadline to sign the deal.
What the article doesn’t state is exactly what this “pledge” to help homeowners really means. It also doesn’t state what homeowners would actually get out of the settlement. If residents feel they were the victim of illegal foreclosures, they could take their case to a committee that would require the bank to fix problems and banks would be immune from civil penalties up to 1 percent of the loan. Essentially, it sounds as if the banks would have little financial liability. The foreclosure could still go through, the homeowner kicked to the curb.
This settlement is a mess and it will be interesting to see if anything good actually comes of it. What is more likely is banks will still make profits and homeowners facing Miami foreclosures will still be victimized without the assistance of an experienced foreclosure defense attorney.
If you’re battling foreclosure in Miami or the surrounding areas, contact Jacobs Legal for a confidential appointment to discuss your rights. Call 305-358-7991.