Average Mortgage Reduction in Florida Tops $114,000
Mortgage Reductions in Florida
The average debt reduction for more than 1,000 Florida home owners averages $114,015 on primary mortgages. The number was calculated since a February settlement between five large banks and the state attorney general was reached.
The Mortgage Forgiveness Debt Relief Act, as it is known, aims to help borrowers who are underwater on their Palm Beach homes by forgiving the difference between the price of the home when they sell it and what is still owed to the bank. Under normal circumstances, that money would be taxable. In Florida, close to 500 home owners have seen, on average, $65,896 in mortgage debt relief as a result of the National Mortgage Settlement. Close to one in six American home owners who have benefited from the settlement live in Florida.
U.S. Housing and Urban Development Secretary Shaun Donovan recently spoke at Florida Housing Coalition’s annual conference and Orlando and said, “We require the lenders when they are doing principal reductions to create a payment and a situation for home owners that will ensure they will be able to stay in their homes.” Donovan praised Florida Attorney General Pam Bondi for her work on the settlement.
It wasn’t until recently that principal reductions on home loans were even issued. Back in May, Bank of America offered close to 200,000 underwater home owners mortgage reductions around the country. They were given out to the first 5,000 people that were approved, and on average, $145,000 was issued per borrower.
A total of $1.7 billion loan help was issued in Florida between March 1 and June 30. The assistance came in the way of mortgage principal reductions, short sale approvals, refinances, and moving assistance to people who could no longer remain in their homes. Nationally, $1.3 billion in debt reduction was part of a larger $10.5 billion in mortgage relief that banks handed out.
The banks included in the settlement are JPMorgan Chase, Wells Fargo, Citigroup, Bank of America and Ally Financial, formerly GMAC. JPMorgan Chase offered the most in principal reductions on primary loans at $76 million.
When asked to speak about the banks role in helping to eliminate primary mortgage debt in Florida, Donovan said, “the key is whether they continue to deliver on those results and we will be watching them like hawks to ensure they live up to their promises. Certainly, banks expect home owners to live up to their obligations each month and we should expect the same from the banks.” Lenders will have until February 28, 2015 to meet all of the settlement’s requirements.
If you are considering a short sale in Palm Beach, please contact our team of local real estate agents. We are experts in the short sale process and premier real estate in Palm Beach.
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