8:43 a.m. EDT, October 16, 2012
Some 167,398 Floridians who lost homes to foreclosure may each get about $2,000 as part of the nation's largest consumer financial protection settlement.
The checks will be sent out in early 2013, with more than a third going to people who lost homes in Broward, Palm Beach and Miami-Dade counties, estimated Jack McCabe, a housing analyst based in Deerfield Beach.
People need to send in forms to receive the money by Jan. 18. How much people will receive depends on how many borrowers participate.
Already, Minneapolis-based Rust Consulting has "sent out notification postcards to eligible borrowers nationwide," said John Lucas, a spokesman for the Florida Attorney General's Office that is helping administer the historic federal, 49-state settlement.
"A low percentage of those postcards were returned, and Rust is conducting further research to locate those borrowers," Lucas added in an e-mail. People can call toll-free 866-430-8358 to see if they qualify to be part of the settlement.
A former Pompano Beach homeowner who would only give his first name, Mike, said he called and found that he was on the list to get a check. He said he hired too late an attorney to fight his foreclosure. "I was in denial," he said. "Divorce, job and house — I lost all three."
In all, about $1.5 billion will be given nationwide to people who lost homes to foreclosure, with Floridians getting about $334 million.
The five lenders agreed to a massive $25 billion national settlement earlier this year. By August more than 23,000 struggling Floridians had received $1.7 billion in mortgage relief, including principal forgiveness, loan modifications and the suspension of mortgage payments until a later date, according to an interim report by the independent National Mortgage Settlement Administrator. Floridians will ultimately receive about $8 billion in relief.
Part of that includes money to owners who already have lost homes to foreclosure, including those Floridians served fraudulent "robo-signing" foreclosure notices by the five lenders. State and federal investigations found that the banks had routinely signed foreclosure-related documents outside the presence of a notary public and without really knowing whether the facts they contained were correct.
Roy Oppenheim, a foreclosure defense lawyer in Weston, said the projected $2,000 settlement to each foreclosed homeowner doesn't go far enough in helping those South Floridians who were tossed out of their homes with such fraudulent paperwork.
"They should have been given more money," Oppenheim said. "Those were criminal acts."
But the settlement makes no distinction and gives the same amount, regardless of the circumstances of how people were foreclosed on, Oppenheim said.
Other foreclosure victims have been given much more money, he added. Another unrelated foreclosure settlement, for example, gave $25,000 to each soldier who was foreclosed on while fighting overseas, Oppenheim said.
Real estate analyst Jack McCabe agreed that the estimated $2,000 settlement doesn't fully resolve the pain of foreclosure. "It's like pocket change," he said. Some homeowners, for example, lost tens of thousands of dollars in home equity when they were foreclosed on, McCabe said.
Still, it's some cash: Most Floridians who lost homes to foreclosure won't get anything, McCabe added. About 400,000 Floridians were foreclosed on between 2008 and 2011 but the settlement affects only 167,398 of them, he said. About 233,000 others had lenders who aren't part of the agreement.
In addition, there are now about 339,000 more Floridians fighting foreclosure in court. More than a third — or 38 percent— live in Broward, Palm Beach or Miami-Dade counties, McCabe estimated.
In addition another 530,000 Floridians are more than 90 days late in paying their mortgage and face losing their home, he said.
"We've still got a full ways to go before we resolve this foreclosure crisis — another two to three years," McCabe said.
If you believe that you are eligible for relief and have not received a Claim Form, please contact the National Mortgage Settlement Administrator at 1-866-430-8358, Monday through Friday 7 a.m. – 7 p.m. Central Time