Foreclosure Relief Only During Holiday Season Insufficient To Address The Problem

Governor Charlie Crist of Florida has presented the state with a holiday gift – foreclosures will be held at bay during the happy season. He has persuaded the sharks – the bankers and lenders to grant a 45-day moratorium on foreclosures. But this does not satisfy the needs of those who are most in need of help.

It will however keep in abeyance foreclosure on residential properties during the Christmas and New Year holiday allowing time for the borrowers to negotiate with the lenders and bankers for a new settlement of the soured loans. Moreover, added Governor Charlie Crist, the state will without delay distribute over $441 million as federal mortgage assistance to the local governments. This will enable borrowers to talk with their bankers about impending foreclosures.

Unfortunately to most of the residents of Florida who are facing foreclosure, it is just cosmetic surgery and window dressing. They feel much more is needed. Although they are happy that the lawmakers are holding a special session dwelling on state budget they feel that the possibility of imposing a 90-day hold on foreclosures should be discussed. Another suggestion was that meetings between lenders and borrowers should include a third party mediator to prise into the matter of loan modification.

For those who are unemployed it may not be possible to continue even with modified loans. But for others the modification involving changes in the time period of the loan and payment amount will spell hope for thousands. They will be able to continue to stay in the houses that are their homes. On the other hand the money coming into the banks will keep the latter afloat.

The federal relief of $541 million will be of help to many but it will not be the one silver bullet in solving the enormity of the foreclosure related crisis in Florida. Florida is responsible for the third highest foreclosure rate and reo homes. Coupled with this, with the collapse of the building industry and slump in the general economy, unemployment is increasing.

Governor Crist is extremely anxious to help the house owners weather the foreclosure crisis – and rightly so. But his gift of helping the Floridians during the holidays only is not sufficient to stem the tide. It will only postpone the issue and keep it pending – it will not solve it. Something more radical is required to shake up the system.