OPINION: Florida homeowners deserve protection
Florida has not released $676 million in homeowner assistance funds from the American Rescue Plan Act to help keep those affected by the COVID-19 recession from losing their homes.
I can’t help but sympathize with the hundreds of thousands of homeowners in Florida who have done nothing wrong – yet feel just like I feel: trapped and kept prisoner by a system in which the homeowners always lose.
Without these assistance funds many homeowners could face the same corrupt foreclosure and modification practices that occurred a decade ago in the 2008 foreclosure crisis. Floridians need protection before history repeats itself. If you think those problems have been fixed, think again.
My own nightmare with homeownership began in 2008, when I bought my dream home in Sarasota. After signing the loan paperwork with a well-known bank, I discovered that the loan it promised me was not the one it gave me. In fact, the monthly payments were hundreds of dollars more than promised – and the loan was not sustainable. But the housing market had crashed: there was no way to sell the home and I had to find a way to make the payments.
I didn’t walk away like many did; I did everything possible to make the monthly loan payments. I rented out my house, but even the rental revenue was not enough to cover the monthly payments. So I moved into a tiny one-bedroom apartment with my child so I could pay the $600 difference between the house’s rent and what I owed on the mortgage every month. I also made sure I paid my mortgage ahead by a month or more.
After pushing my finances to the limit for two years, I called the bank and asked if I could refinance my loan because interest rates had gone down. What the bank told me was shocking.
It stated that I did not qualify for refinancing because in 2008, I was given a loan that I never should have qualified for in the first place. Instead of refinancing, the bank suggested a loan modification. It told me to apply and that it would put my loan in forbearance until the new lower payment was calculated. It also told me to stop making my monthly payments.
After I applied for a loan modification, I started receiving notifications that I was in default. What I didn’t know was my loan was being “dual-tracked” by the bank. Dual-tracking is a term to describe when one bank department is supposedly working on a loan modification while another department is proceeding with a foreclosure.
At that point I had enough of the bank and I asked to pay off the loan's principal balance to end the mortgage forever. Instead the bank filed foreclosure against me and has taken me through 10 years of court battles.
Ultimately I defended myself in a trial and I won. The court dismissed the foreclosure, and it agreed that I was not late on the mortgage. But even now the bank won't let me pay off the mortgage; it continues to hold the home hostage until I sign my equity over to it. It's been an absolute nightmare to get out of this house.
While many Floridians affected economically by the pandemic have been in forbearance, I know very well that the banks may soon turn their cruel tactics on these homeowners. Our state leaders can’t keep allowing this to happen.
We need immediate action to help homeowners who have been set back during the current economic downturn. And we need new legislation – a Homeowner’s Bill of Rights -– that would prohibit the fraudulent and abusive practices that people like me have faced and will continue to face.
We deserve no less.
Cheri Melchione is a single mother living in Sarasota and a local advocate for housing reform.
This article originally appeared on Sarasota Herald-Tribune: Florida's homeowners need protection from abusive lending tactics
