Florida homeowners fall through cracks in nationwide mortgage settlement

About 1,000 Floridians have filed complaints in recent months against the top lenders who pledged earlier this year to work with “underwater” homeowners as part of a national legal settlement of unscrupulous lending practices.

A multistate deal hatched by state and federal leaders in February was supposed to force the country’s five largest lenders to lower interest rates, reduce principal or even offer cash to struggling mortgage customers.

But the fine print has left many customers of those lending giants frustrated. The breakdown of the Florida complaints filed against the five lenders who participated in the settlement: Bank of America, 39 percent; Wells Fargo, 28 percent; JPMorgan Chase, 20 percent; Citi, 9 percent; and Ally/GMAC, 4 percent, according to records supplied to the Orlando Sentinel by the Florida Attorney General’s Office.

One of the complainants is Eric Larson, owner of a downtown Orlando condominium, who objects to the settlement not requiring a bank to work with an “underwater” mortgage customer — one whose property is now worth less than the loan — unless the lender not only services the mortgage but also owns it.

“We didn’t know the stipulations in the settlement — the Wells Fargo ‘protections,’¿” Larson said. “In order to qualify for a refinance, the loan has to be owned and serviced by Wells. But none of these lenders own these loans — they securitized them. They make it sound like if you’re current on your payments, they will refinance. It sounds really great, but in reality, it’s not happening.”

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