Help for Florida’s troubled homeowners is coming more slowly than in the rest of the nation.
A Treasury Department report Tuesday shows that only 12.4 percent of Florida borrowers who are at least two months behind on their mortgages have entered into a new deal – known as a trial loan modification -- through the Obama administration’s Making Home Affordable Program.
That puts the state behind the national pace, where 20 percent or one out of five troubled loans have been modified under the administration’s program through October.
Nationwide, 3.2 million borrowers are at least 60 days behind on their mortgage payments.
That includes many South Floridians. In September, 17.8 percent of home loan payments in Palm Beach, 20.7 percent in Broward and 25.1 percent in Miami-Dade were 90 days past due or more, according to the latest figures from First American CoreLogic, a real estate analysis firm.
Floridians trying to hold on to their homes are trying to get loan modifications in large numbers. Howard Nelson, a vice president at BB&T Bank in Sarasota and president of the Mortgage Bankers Association of Florida, said lenders are busy processing numerous loan applications. “The program is working from what we see,” he said.
But Florida Attorney General Bill McCollum, who has received more than 450 complaints about mortgage lenders across the state, said more needs to be done. “I am outraged by the reports I am receiving from homeowners telling me that banks are giving them the run-around instead of assisting them with their mortgage refinancing and loan modifications,” said McCollum, a candidate for governor.
The Treasury report, the first ever to break down results of the loan modification program by state, shows that Florida has the second highest number of loan modifications among the states. The 82,614 loans in a trial modification here dwarf the number recorded in states with large populations including New York (28,773) and Texas (21,260).
The Treasury report did not specify how many South Florida homeowners are affected and only covered those loan modifications under the new federal program.
A trial modification is the offer extended to the homeowner for the first three months of the loan. If the trial period is completed successfully and the homeowner submits the required information, trial modifications can be made permanent.
The leading state for loan modifications was California, where 134,609 cq loan modifications were in place through October. That encompasses about 19 percent of California’s eligible borrowers.
Nationwide, the Treasury said 650,994 loans have been modified. When the Obama administration launched the program, its stated goal was to help as many as 4 million troubled homeowners.
Among large lenders, Bank of America, which faces hundreds of complaints in Florida about troubled or stalled loan modifications, placed near the bottom of the list in the pace of loan modifications. Bank of America, which absorbed Countrywide Financial in 2008, is one of Florida’s largest lenders.
The Making Home Affordable report from the Treasury Department shows Bank of America has completed 14 percent of loan modifications for its eligible troubled borrowers – typically those having trouble paying the mortgage for their primary residence, purchased before Jan. 1, 2009.
The bank has 136,994 loan modifications in progress nationwide out of 990,628 eligible borrowers. Figures for Florida were not available.
Only Wachovia, with 3 percent of modifications started nationwide, had completed a smaller percentage, among large national banks.
Wells Fargo acquired Wachovia at the start of this year.
There’s a reason why Wachovia has not modified more loans under the Obama program, said Wells Fargo spokeswoman Teri Schrettenbrunner. Many Wachovia loans allowed borrowers to pay interest only. If those loans were modified following the program’s guidelines, borrowers would be paying interest as well as principal and their payments would increase. So those borrowers are being offered modifications under other programs, she said.
The top mortgage firm in the report nationwide was Saxon Mortgage Services, which services loans in Florida. The Treasury said Saxon has offered 44 percent of eligible borrowers a loan modification, followed by CitiMortgage, at 40 percent. GMAC is third, with 35 percent.
Bank of America is the subject of 220 complaints to the Florida Attorney General’s office about failed or stalled loan modifications, the attorney general’s office said Tuesday. That was a revised figure, down from the 452 complaints the attorney general’s office reported last month.
Spokeswoman Ryan Wiggins said the office later discovered that it had mistakenly included inquiries, which were not complaints, in its original figure.
Bank of America issued a statement Tuesday saying that nationwide, it has helped almost 600,000 customers to obtain a loan modification through the Making Home Affordable program and other programs.
Bank of America did not release current Florida loan modification figures.
Its results under the Obama administration program “continue to grow,” the statement said.
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Harriet Johnson Brackey, the personal finance writer for the Sun-Sentinel, has been an award-winning business...
