Inventories of Tampa foreclosure homes are expected to rise further as the number of underwater mortgages continues to increase, according to real estate research firms and nonprofits helping distressed homeowners in Florida.
Approximately 51 percent of all homeowners in Tampa Bay own homes valued much lower than the amount of their home loans. These homeowners have higher risks of going into foreclosure because of their difficulty in getting loan modifications. Banks have been hesitant in modifying underwater mortgages.
One homeowner, David Austin, has a loan amounting to $208,000, but his home is worth only $137,000. Another is Johnny Seay, who owes the bank about $245,000, but his house is now worth only $225,000.
The Florida Bar Association has been trying to help these homeowners negotiate with their lenders, but most lenders are not committed to the federal foreclosure prevention program. They accept loan modification applications, ask for more documents, give homeowners assurances but later change their minds, putting homeowners in perpetual waiting status.
Some have even seen their homes go into foreclosure while thinking their loan modification application is being processed. Seay reported his home was suddenly foreclosed after receiving loan modification approval papers.
In response, John Mechem, a spokesperson for the Mortgage Bankers Association, explained that lenders wanted to help troubled homeowners because they too want to avoid foreclosure. He added that homeowners have to wait a little because the banks are overwhelmed by the staggering number of loan modification applications.
However, unemployed lawyer Rosemary McGuire, does not believe banks are doing what they can to help. She said she has not missed a single monthly payment, but she wants her payments to get reduced until she can get a new job. She complained that the middle class is not getting the help that others easily get.
Alan Bookman, former president of the Florida Bar and member of the Florida Supreme Court?s task force on foreclosure, said the task force has proposed the handling of all foreclosure cases involving primary houses by a third-party housing mediator. He said that more primary homes would be saved by a more focused third-party.
In a nationwide report of foreclosures in the country's largest metro areas, the Tampa-Saint Petersburg metro area had almost 34,000 foreclosure filings in the first 6 months of 2009, with nearly 2.6 percent of all households in the area in default or in the foreclosure process.
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