Florida Lenders to Actively Recover Unpaid Mortgage Debt
Florida Lenders to Actively Recover Unpaid Mortgage Debt
Many Florida home owners opted to file for foreclosure in the wake of the housing crisis because they were left no other options and were underwater on their home mortgages. One of the benefits of foreclosure was that home owners often wanted to get out from under debt in order to get a fresh start. However, thanks to more aggressive collection processes – that may no longer be the case.
According to a recent article in the Palm Beach Post, Floridians who lose homes to foreclosure may be actively pursued for unpaid debt by lending companies under deficiency judgements. A federal audit determined that lender losses can be recouped by demanding restitution, which means that the process is legal in Florida; however, this type of aggressive action against former homeowners has, so far, been rare.
A recent report issued by the Federal Housing Finance Agency revealed that funds collected by pursuing Palm Beach home owners who defaulted on loans can help the overall housing market since it would increase revenue for mortgage backers Fannie Mae and Freddie Mac.
Furthermore, the report noted that attempts on behalf of lenders to recoup funds may discourage Florida home owners from opting for foreclosure in spite of the fact that they can financially afford to make their mortgage payments on time.
Previously, banks usually didn't pursue debt since experts felt it wasn't worth the effort. Now, however, federal agencies are promoting the practice. The Department of Agriculture and the Department of Housing and Urban Development encourage lenders to seek restitution on the grounds that it will cut down on the number of home owners who opt to strategically default.
According to local Palm Beach real estate experts, the likelihood that lending companies will go after home owners who opt for Palm Beach short sales is low. Most times, lenders will waive the deficiency in a short sale since those properties will help the overall housing market, and are a smart way for people to get out from under underwater mortgages while preserving their credit scores.
If you'd like more information on the Palm Beach housing market, please don't hesitate to contact us. The professionals at Palm Beach Premier Real Estate would be more than happy to keep you up-to-date on the latest Palm Beach real estate trends.
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