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More on the big news this week on Florida foreclosures.  After all, there are many things to consider as a Florida homeowner or Florida mortgage holder with this new Attorneys General – Bank Foreclosure Settlement.  Here are just a few of them.

First things first, it may be putting the horse before the cart for the media to be considering this a done deal.

There is no settlement agreement in place, signed by the duly authorized representatives of the banks nor by the various Attorneys General of all the states that have been negotiating this out of court settlement with some of the nation’s biggest banks over the widespread Foreclosure Fraud (robo-signing, etc.) activities in this country.  All that is available right now is a “summary” sheet.

You can read the National Mortgage Settlement Executive Summary online here (it’s a four page pdf document available for download).

Second, nothing is happening anytime soon.

According to the National Mortgage Settlement’s online information it will take another month or two for the negotiators to get an administrator in place, whose job it will be to take the reins and get the paperwork done as well as overseeing things to make sure everyone is doing what they are supposed to do (“compliance”).

They are also estimating that it will take maybe as long as nine months for this new administrator, working with the various Attorneys General and the Bank representatives, to get down to the real work at hand and determine which homeowners are going to be those who will get the cash payments, principal reductions, and refinancing deals.

How will they know they are one of the lucky homeowners?  They’ll get a letter.  Guess the administrator will have the job of making sure they’ve got the right mailing address, right?

Then, it will take around three years (that’s right – to 2015) for the deal to get done.

Lots of home mortgages aren’t impacted by this Settlement Agreement at all.

This big deal only impacts loans made with five banks at this point:  Ally/GMAC; Bank of America; Citi; JP MorganChase; and Wells Fargo.  If you have a home loan with any other financial institution, then this settlement agreement doesn’t help you.  If your mortgage financing has been through Fannie Mae or Freddie Mac, then this deal doesn’t help you.

The Settlement Agreement only applies to foreclosures in a certain time period.

Even if you had a home loan with one of the banks in the deal, this doesn’t mean that you are a part of the settlement.  For example, it’s only foreclosures between January 1, 2008, and December 31, 2011, that are eligible for any cash restitution.  According to the “summary sheet,” $1.5 billion is expected to be distributed nationwide to approximately 750,000 borrowers.  No one knows who these borrowers are right now, and no money has been collected toward that $1.5 billion sum.

Larry’s Tip

All this media hoopla about a big settlement agreement regarding Foreclosure Fraud should not be taken by any individual Florida home owner as being a solution to their situation.  Not only is this agreement not a real deal – a legal contract binding the banks, etc. – it will not impact lots of people who have been hurt by Foreclosure Fraud in any way.

For example, many Floridians got home loans from smaller banks or credit unions, and those foreclosures are not impacted by this Settlement Agreement.  People who were taken advantage of by appraisers in appraisal fraud or appraisal negligence are not having those claims addressed here.  Florida home owners who have been hanging onto their homes into 2012 but may now have to default are not helped by this deal.

Right now, the media is giving this settlement agreement a lot of coverage.  However, bottom line this is a deal between attorneys of all the states except Oklahoma and the five big banks listed above, brokering a deal where the banks are paying money and in exchange, the states are not going to pursue legal claims against them (civil or criminal).

It is not a substitute for the individual home owner learning the law that applies to his or her situation and the various legal avenues – and legal remedies – that are available to them.

If you have questions or comments, please feel free to Chat with Larry in the comments below, at or (954) 458-8655.

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