Florida Mortgage : Learning Center

Over the past 5 years, many Florida homeowners obtained their financing from a local Florida bank offering mortgage loans based on their own reduced underwriting guidelines.   Now, during this temporary recession, these homeowners are being denied any assistance with respect to mortgage loan renegotiation’s – which could help everyone throughthese tough times.  Florida homeowners, and their families, are being forced to foreclose or to sell their primary homes through a short-sale.  The Florida mortgage program was called a “No Ratio” mortgage – and here’s the problem.

First, a “No Ratio” mortgage loan allowed Florida home buyers to purchase a primary residence without ever disclosing any information regarding income.  In fact, income was never listed on the mortgage application.  The main underwriting requirements were credit scores had to be at least 620 and the home buyer had to show evidence of at least 2 months of mortgage payments in savings or reserves.  That it.

Second, when renegotiating the terms to keep these homeowners in their homes; the bank now wants income evidence.  Is that fair?  We are currently in a recession and homeowners may be earning less in these tougher times.  Some homeowners have a history of on-time payments for over 3 or 4 years and are only inquiring about how the bank can help them keep their home.  Some have asked to reduce the principal balance to meet today’s lower market values; and perhaps write a new 2nd mortgage with no payment until the home is sold or refinanced years later.  This would keep home values up as it avoids selling at today’s values, fights foreclosure worries and the bank doesn’t lose anything. 

Banks should not have the authority to change their underwriting guidelines on mortgage programs that they themselves provided for Florida home buyers.  They should consider reductions in principal balances, lower interest rates, or anything.  All I am hearing is they are forcing Florida homeowners and their families out on the streets and it’s not fair..

Floridians and our local banks should do much more to help our homeowners.  If you need more information regarding past or present Florida mortgage programs and details - call me anytime at 888.399.0520.

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