Ways to Help with Florida Mortgage Foreclosure

Many critics are against the idea of Congress stepping in to bailout Florida mortgage holders on the verge of default.

With that in mind, here are a trio of other options for troubled borrowers…
Bankruptcy reform. About the only debt a bankruptcy judge can’t modify is a Florida mortgage. Borrowers used to get into trouble not because of unsustainable mortgages, but because they lost a job or got ill. Now homeowners commonly fall behind because they can’t keep up with their mortgages. Bankruptcy judges should get more latitude to rework mortgages along with other debt.

Tax code changes. Sometimes, badly strapped homeowners can persuade lenders to reduce the size of a mortgage to reflect a home’s plummeting value or the homeowner’s inability to keep up with the payments.

Sometimes, the lender forecloses and a homeowner can walk away with no house, but also no debt. That would seem to be the end of the story, but it isn’t to the IRS, which often considers either action as income to the borrower, and sends a big tax bill. It makes sense to alter the code to keep the tax collector from making a bad situation worse.

Education and advice. Sometimes, a home could be saved if its owner only knew that it was possible to renegotiate the Florida mortgage loan — and that a lender might prefer getting smaller payments to no payments at all.

Scores of state organizations and non-profit community groups are working to educate and counsel homeowners, and in many cases to help them renegotiate their mortgages to keep their homes.

These are relatively simple steps to take. And as the housing market becomes more troubled, they need to be considered before sales plummet to record lows and borrowers cannot afford to own property.