As the 2012 Republican primary season rolls on, with the next primary in Florida on Tuesday, January 31, foreclosure victims, underwater homeowners, and owners of distressed properties in the Sunshine State look to the slate of candidates for proposed solutions as they tour the state in advance of the election.

Florida has long since been near the top of the list when it comes to home foreclosures. The state’s current foreclosure rate remains sky high, with one out of every 360 housing units in the state in some part of the foreclosure process. South Florida has been particularly hit hard by the foreclosure crisis; it’s foreclosure rate of over 18% is six times higher than the national rate of 3.51%. Since the area contains a significant portion of the state’s population – and registered voters – the housing market is at the top of the list of issues in the state.

Unfortunately for Florida homeowners, none of the four main candidates – Mitt Romney, Newt Gingrich, Rick Santorum, and Ron Paul – has offered any significant plans on fixing the broken housing market and restoring a sense of normalcy to a domestic market that is marked by high numbers of foreclosure properties and falling home values.

Part of the silence from the Republican nominees is due to their ideological backgrounds, which call for less government interference in the market. Romney, extolling this approach, has stated repeatedly that the best solution is to indirectly impact the housing market by creating jobs through tax cuts and other alleged solutions for unemployment and other economic woes.

Gingrich has largely echoed these sentiments, stating that government interference in the housing market helped to lead to the current mess that has resulted in millions of foreclosures over the past few years and left millions more owing more on their homes than what they are worth. Gingrich has come under fire lately for his ties as a lobbyist with Freddie Mac, one of the key agencies accused by Republican critics of playing a major role in the crisis.

Paul is even more anti-government when it comes to housing solutions. Santorum, for his part, did recommend a refinancing plan, and he and Romney have advocated looser restrictions for loan modifications.

Still, the most prominent Republican solution for the foreclosure crisis seems to be to let the market “run its course and hit the bottom” (according to Romney). For Florida residents, that may not be an acceptable course of action.

People who say that the proposed $25 billion foreclosure settlement between states and five major lenders is near are perilously close to the boy who cried wolf, but this time a resolution may actually be near.

The question now becomes this: If/when this settlement passes, will homeowners receive any significant benefit?

On the surface, the question is a bit silly. One would expect homeowners to receive some kind of restitution for being wrongfully foreclosed on by banks like Bank of America, Citibank, Wells Fargo, JPMorgan Chase, and Ally Financial. Previous versions of the settlement, though, did little to assuage the doubts of consumer advocates – including several high-powered attorneys general involved in the negotiations.

The latest incarnation of the settlement does provide for some monetary compensation for homeowners who suffered as a result of the banks’ alleged practices, but former owners of home foreclosures will not get their homes back.

Of the $25 billion, approximately 68% of the amount – $17 billion – will be allocated toward principal reduction to help owners of distressed properties and underwater homes. Roughly 20% of the amount – $5 billion – will be targeted toward state and federal programs that include a provision to give roughly 750,000 Americans checks worth $1,800 apiece. The remaining amount – $3 billion, or 12% – will go toward assisting homeowners with refinancing their mortgage loans at a lower interest rate around 5.25% – higher than today’s incredibly low rates but lower than most of the interest rates for today’s outstanding loans.

There could also be measures of reform contained in the bill, but one of the most contentious measures – civil immunity for banks – is still very much on the table and a real possibility. Limited criminal immunity may also be included, but banks will be vulnerable to some legal action by the states. Already several states have promised to initiate investigations into faulty foreclosure processes, including Delaware, New York, and Massachusetts.

In the end, if the settlement passes, nearly a million Americans could see a $20,000 reduction in their principal balances on their loans. That will help some homeowners, but large swathes of underwater and distressed homeowners will not receive any benefit from the settlement.

Since this is an election year, the Obama administration will likely pressure all sides to make this latest itineration of the settlement the final one. Even if states decide to not sign the agreement, it will likely pass – still leaving the door open for major legal battles down the road.

The foreclosure fraud crisis that started in 2010 when five major lenders – along with a host of smaller ones – were accused of widespread fraud, deception, and negligence in foreclosure processing that allegedly led to unethical and/or illegal foreclosures across the nation.

Now, well over a year later, and after several false alarms of a settlement between a coalition of state attorneys-general and the five major lenders at the heart of the case (JPMorgan Chase, Wells Fargo, Bank of America, Citibank, and Ally Financial), a deal may be within striking distance according to Washington insiders.

Naturally, those in the real estate industry who have been following the foreclosure fraud case for the past year are skeptical; after all, the deal was supposedly close to completion on many prior occasions before the coalition of AGs virtually splintered in 2011 over several unpopular components of the deal – including the notion that the deal did not go far enough in punishing the banks for their illicit processes and ensuring that they would not conduct themselves the same way with future home foreclosures.

Since 2012 is an election year, the Obama administration – the impetus behind the meeting of the minds going on in D.C. – is under more pressure than ever to arrange some kind of workable solution. This version of the deal apparently incorporates principal reduction for close to one million borrowers across the country, a move that is much desired by housing advocates and one that could serve as a mini-stimulus – paid for by the banks rather than the taxpayers.

The rest of the details – a $25 billion settlement split amongst the banks – still leaves some housing advocates critical. To them, including California AG Kamala Harris and NY AG Eric Schneiderman, the deal doesn’t do much to create a viable framework to protect against future abuses in the system. Even a principal reduction for some borrowers would not be a punitive measure to the banks, and those who could not stop foreclosure wouldn’t get anything for their troubles.

With that being said, some kind of arrangement will be made between the states and the banks, even if the Obama administration has to engage in heavy arms-twisting behind the scenes with California and New York. Too many foreclosure properties are in the market, driving down prices, for the administration to take anything less than an aggressive stance with their solutions to the housing crisis.

We all know that the foreclosure inventory is incredibly high, which is great for those looking to purchase foreclosed homes for sale. We also know that foreclosure listing services provide the most up-to-date information on recent foreclosures throughout the country. Furthermore, everyone understands that the foreclosure process is still an issue, especially in judicial foreclosure states.

But where, exactly, do we currently stand when it comes to foreclosures?

According to Lender Processing Services, 631 days is the average delinquency timeline for homes that are currently in foreclosure, which is record high.

Obviously, judicial foreclosures are great at ensuring that homes are not foreclosed upon unless the homeowner is truly delinquent. Many non-judicial foreclosure states have had issues with banks wrongfully foreclosing upon homes of innocent homeowners. However, the great thing about judicial foreclosure states is these situations are often avoided.

On the other hand, judicial foreclosure states take much longer to process foreclosures than non-judicial foreclosure states. Although this delayed foreclosure process can provide struggling homeowners with a little more time to stop foreclosure, prolonging foreclosure also prolongs the true effects.

States with judicial foreclosures have twice as high of foreclosure inventories than states with non-judicial foreclosure processes. Furthermore, the foreclosure home sale rate is also significantly lower in judicial foreclosure states in comparison to non-judicial foreclosure states.

At the end of the day, judicial foreclosure states may be protecting their residents from wrongful foreclosure and providing an extended amount of time for homeowners to find real estate resources to help them stop foreclosure, but these states are merely delaying the true impact of foreclosures on the states. In essence, judicial foreclosure states may be up to one year behind non-judicial foreclosure states in terms of progress toward recovery.

However, it is not all bad news.

Since banks had to deal with the foreclosure crisis that has resulted in a loss of a ton of money and high foreclosure inventories, lending standards have become tighter (possibly too tight). Although there are arguments that these standards are unnecessarily high, the loans that have occurred over the last year or so are performing rather well.

Although the delinquency length is increasing due to judicial foreclosure states (and these states have yet to experience the true effects of the foreclosure crisis), there is light at the end of the tunnel. Fortunately, the high lending standards are actually putting performing loans on the market with a low chance of foreclosure, which is great for the real estate market. However, the judicial foreclosure states still have a very long way to go to catch up with non-judicial foreclosure states in regards to progress toward real estate market recovery.

The Occupy Wall Street movement has gained notoriety across the world for its to-the-streets actions against corporate greed and corruption, targeting business and government alike in a series of high-profile confrontations and protests in cities across the country.

Now, with a new initiative that begins next week, the movement will spread to a familiar place: Your neighborhood.

On December 6^th, Occupy Wall Street will kick off its Occupy Our Homes campaign that promises to put a spotlight on wrongful foreclosures and other shady practices that occur in neighborhoods across the country. They hope to highlight what they view as the injustice of today’s economy in regards to everyday Americans who struggle with making mortgage payments and holding down jobs, all while banks allegedly work to process as many home foreclosures as possible through whatever means necessary.

The roots of this newfound movement lie in the same controversies that have dominated the industry over the past two years: mass numbers of fraudulent and questionable foreclosures brought about by a foreclosure process concerned more with speed and numbers than fairness or legality. The fact that major lenders are locked into a negotiation and settlement with state governments in Washington is testament to the backlash that has hit the banking industry as a result of these allegations – most of which are true.

The exact details of next week’s campaign are unclear, but organizers suggest that disrupting foreclosure auctions and finding other ways to either stop foreclosure or outright occupy vacant foreclosure properties and allow homeless families to stay in them are among the plans.

One of the more drastic calls-to-action espoused by the Occupy Our Homes movement is an initiative to avoid allowing banks to foreclosure at all, with the ultimate goal of keeping as many people in their homes as long as possible. With all the stories and allegations floating around about banks and their unethical and potentially-illegal foreclosure practices, such a sentiment is understandable and even encouraged until banks demonstrate an ability to properly and responsibly conduct their business regarding mortgage loans.

That may not happen anytime soon, and for that reason, Occupy Our Homes may have staying power. At any rate, it will be interesting to see exactly what happens next week as the new campaign kicks off. One thing is for sure – the movement that many people saw going away quickly after it began last October is here to stay.

The housing market, with scores of foreclosed homes for sale in virtually every metro area in the country, is reeling. Millions of homes are underwater, and homeowners in these distressed properties can’t refinance from their ruinous mortgage loans because of negative equity in their homes.

Because of this situation, President Obama and his administration are attempting to shock life into a flailing market by revamping an existing federal program designed to help homeowners in trouble refinance their loans – before they lead to even more repo homes on the auction block.

The program – the Home Affordable Refinance Program (HARP) – was designed to alleviate some of the burden of homeowners locked into loans with high interest rates. The plan offered assistance to homeowners who owned mortgages worth 125% of their current home value, based off of an appraisal. This helped some avoid the negative equity problem, but in the end only assisted 70,000 – which is a drop in the ocean of the millions of underwater homes out there.

There’s no question that HARP is a failure – 70,000 isn’t enough – but will any changes to the program actually make any kind of real, lasting impact?

One proposed change might help. A big obstacle for most applicants was the negative equity restriction. A paltry cap of 125% isn’t enough, since many homeowners are well below 25% in the hole with their current home values. How the program will get around this particular restriction is to waive an appraisal for the home – meaning those who owe more than 125% can find respite.

Of course, the other requirements must still be met. The mortgage must have been purchased by Fannie Mae or Freddie Mac before June 1, 2009. It cannot be a pay option adjustable-rate mortgage, either. Both of these together eliminate a significant chunk of applicants, so the program will not be able to stop foreclosure for many homeowners.

Even with the program’s changes, participation in the program on the part of lenders is not mandatory. True, the administration has secured the participation of Wells Fargo, Bank of America, CitiMortgage, and JPMorgan Chase, but banks are by no means required to play ball –and if they do, they can modify terms of the program.

Another limitation is that there are no principal writedowns involved in the package. Assistance comes with lower interest rates and lower monthly payments. This can help out families and stimulate the economy, but the added benefit of principal reductions would do more for the health of the real estate market as a whole.

Still, the new and improved HARP should, on paper, perform better than its predecessor. At least, that’s the hope.

As foreclosures continue to pile up across the country, many experts in the real estate industry are expecting some sort of positive news with a rumored announcement from the Obama administration concerning a new foreclosure assistance plan.

The details about the proposal are sketchy, but according to numerous sources, the Obama administration is set to release its strategy to again attempt to tackle residential foreclosures and reduce the amount of repo homes that enter the pipeline nationwide.

Such a move is more than welcome. Approximately 4.5 million homes are currently in default, with another 5.5 million homeowners expected to follow suit over the next few years. That would represent approximately 20% of the total number of mortgages in existence today – a staggering percentage for any market.

More than likely, the new plan will put into place a federal mortgage refinancing program that will help millions of homeowners refinance their existing, high-interest mortgages and lock in today’s historically-low interest rates – potentially saving homeowners thousands a year, much of which is expected to go back into the economy.

These actions will more than likely avoid a probably roadblock in Congress by utilizing the administration’s executive powers and working through the Federal Housing Finance Agency, the independent agency that oversees Fannie Mae and Freddie Mac. This is good news for supporters of a new refinance program, because it is likely that such a proposal would meet an untimely demise in the Republican-controlled House of Representatives.

Currently, there is a program in place called the Home Affordable Refinance Program (HARP). HARP has drawn fire, though, for being far too strict to materially change the outcome for many homeowners. Instead, it has only impacted a small fraction of the overall number of people who could probably benefit from a refinance.

One potential change: Allowing those with negative equity in their homes to refinance. Since there are roughly 11 million homes underwater – roughly 20% – that could prove to be a difference-maker with the new initiative.

One thing is certain: The exact details will not be made available until sometime next month, with the program taking effect at the beginning of December at the earliest. Nevertheless, the refinance initiative could be a welcome change of pace for those impacted by foreclosures throughout the country.

You don’t have to be a leading economist to know that the American housing market – chock full of foreclosures, distressed properties, and homes teetering on the verge – is in shambles. Prices have fallen considerably since their 2006 peak, and five years after the beginning of the crash, supply and demand are so far out of balance that instability is new status quo.

But according to one leading economist – Mark Zandi from Moody’s Analytics – the nation’s housing market problems can actually be managed and even stabilized within the next 12-18 months (provided we take the right action, of course).

This idea is not exactly unique, but the timeline Zandi cites strikes most people as a bit optimistic. With nearly a million residential foreclosures delayed until 2012 from 2011, the expectation was that the market would take some time to fully absorb all the distressed properties in the pipeline before prices would rise – a key to any stable and manageable scenario.

But if the banks and states reach a settlement soon over foreclosure processing, says Zandi, banks will resume processing foreclosures at a high rate like they did prior to the robo-signing controversy in 2010. That high volume could help drain the pipeline and shadow inventory and provide upward incentives for prices to rise, since supply is falling at an adequate pace for the first time in five years.

For the investor or homebuyer who wants to capitalize on this sentiment, that analysis means a rush of foreclosures into virtually every major market over the next year. Banks have been sitting on scores of homes for months- and in some cases, a year or more – and are anxious to unload them as soon as possible for as much as possible. That means foreclosure auctions will become saturated with homes that will probably outstrip the number of people bidding on them (at least in the beginning).

For the market to recover, this deluge is necessary. Prices initially will go down as a result, but ultimately they will rise again – especially if banks resume lending at the same pace that they resume foreclosure processing. And since banks need to move inventory and have a healthy turnover in capital, they will.

It’s worth paying close attention once again to not just the foreclosure settlement, but preparations the banks are making leading up to an expected settlement. When you notice banks beginning to move, action in the market is not far behind.

Of course, the program has not come anywhere close to preventing foreclosures as originally intended, with only roughly 500,000 permanent modifications being arranged through the program – and only about a 60% success rate with these modifications. In all, the program will keep roughly 300,000 homeowners from losing their homes, so it is fair to say HAMP has not helped people stop foreclosure nearly as well as its designers intended.

Recent studies, however, suggest that elements attempted by federal and state governments can actually work if properly implemented. It may be difficult to understand, especially for those who tried to participate in a foreclosure prevention program but did not succeed, but several principles have been proven to be effective.

One key element found to be effective is forced participation. Under HAMP, lenders have an option to participate or to not participate, with only a small monetary incentive offered to encourage participation. Mandated participation is more effective, especially in states like Nevada that give homeowners the option to use a court-run mediation program.

Another effective principle is timely intervention. Many foreclosures are doomed to failure because the homeowners simply did not attempt to work with the bank or get help soon enough to impact the process. By a certain point, lenders are forced to turn to foreclosure instead of helping homeowners because the property becomes too expensive to hold on its books any longer.

Programs like the Emergency Homeowners Loan Program (EHLP) work by soliciting applications, and only a fraction of the $1 billion given to its budget will actually be spent due to a very short application window and lack of applications. Instead of taking a passive approach, EHLP and other programs could be bettered by proactively communicating with homeowners before they reach the point of no return. Government foreclosures can especially be helped with this approach because the owner of the mortgage in question is the federal government, so there is already grounds to approach the homeowner.

The foreclosure settlement talks between the states and five major lenders continues forward after a week filled with drama, tension, and high-profile exits from the negotiating table.

Negotiations over robo-signing and fraudulent foreclosure practices over the past decade involving millions of homeowners and mortgage loans continue forward after California Attorney General Kamala Harris pulled out of the talks, protesting the banks’ push for limited liability for future legal actions. Harris claimed that banks were getting off too easily and were not being sufficiently punished or left open for future legal remedies and consequences, especially considering that her state, California, is one of the hardest-hit foreclosure states in the country.

Massachusetts Attorney General Martha Coakley almost followed suit when she claimed she had “lost confidence” in the ability of the negotiations to adequately resolve the issue between the states and the banks. Both Coakley and Harris – along with New York AG Eric Schneiderman – have criticized the banks extensively and believe in tough legal measures to both compensate victims and ensure that these practices do not happen again.

In spite of all that, though, the talks continue, with most issues on the table having been resolved at this point. Banks and states reportedly have reached agreements on standards for mortgage loan servicers to prevent robo-signing, missing paperwork, and other problems faced over the past few years due to high demand and gross negligence. The two sides have also discussed at length ways to enforce any deal reached.

What continues to divide the two primarily is the issue of immunity for the banks from further legal action. The lenders – Bank of America, JPMorgan Chase, Wells Fargo, Citigroup, and Ally Financial – have balked at walking away leaving themselves open to future legal assaults that could drive down share value and potentially bankrupt the companies themselves if widespread damages are pursued and awarded – a likely scenario, judging by the stand the banks are taking.

With the sheer number of residential foreclosures on the market now and waiting in the wings as a part of the nation’s shadow inventory, delays will continue to weigh heavily on the market and depress prices across the nation. The hope is once a settlement is reached – which seems less likely than before – the market will rebound and banks will resume processing foreclosures and lending to homebuyers and investors alike.

The news this week was not positive for the settlement, but negotiations continue forward, one step at a time.