Crist says banks agree to delay foreclosures

Gov. Charlie Crist announced a handshake deal with many Florida banks that have agreed to voluntarily delay scheduling foreclosure sales of homesteaded homes for 45 days.

The initiative, which doesn't bind banks to any action, comes after Crist concluded that he lacked the authority to set a 90-day moratorium on foreclosures, as he had suggested last week.

Many Florida banks have agreed to delay filing new foreclosure petitions in court and also from scheduling additional foreclosure sales for homesteaded properties for the next 45 days. But the Governor's Office couldn't provide a list of participating lenders.

"This is to help people who really need help, this is not for somebody who went and bought a bunch of condos in South Florida on spec … who've got a bunch of Lexuses in the driveway," Crist said. "This is to help people in their time of need."

It's unclear how many Florida homeowners would be relieved by the move. In October, 54,000 properties received foreclosure notices in Florida, whose foreclosure rate is the nation's third-highest.

By asking bankers to do this voluntarily, Crist partnered with the Florida Bankers Association and joined a movement that already was under way in the mortgage industry. Already, Bank of America, Countrywide, J.P. Morgan and Chase and Citigroup had announced similar delays or internal companywide moratoriums, while they worked with customers to structure more affordable payment plans.

"This is a reaffirmation of our past practice and current practice," said Alex Sanchez, president of the Florida Bankers Association.

But as a voluntary program, there's no guarantee that homeowners will be helped. It may not help the tens of thousands of homeowners whose foreclosure proceedings already have started, including many whose foreclosure sales had been scheduled during the holiday season.

And there's no place for homeowners to complain or appeal to if their bank decides not to honor the delay. The Governor's Office and bankers association said they'd try to help consumers negotiate with unwilling banks.

"It sounds nice," said Miami banking consultant Ken Thomas. "It just delays the inevitable. At some point, if a homeowner is in a mortgage they can't make payments on, it has to be restructured or modified."

And the delay extends only to banks that are members of the Florida Banker's Association, which declined to release its roster on Monday. Out-of-state banks that own Florida mortgages but aren't members of the association wouldn't be obliged to abide by the voluntary delay.

Democratic Rep. Scott Randolph of Orlando asked the Governor's Office for a list of banks that "have agreed in writing to stop foreclosing on properties."

Sanchez, of the Florida Banker's Association, said the Democratic lawmaker is just going to have to "take my word for it" and that "we speak for the Florida banking industry."

Sanchez thanked the governor for his "compassionate leadership at this time" and urged anyone having problems with mortgage payments to "please contact your banker right away."

If there has been no mortgage fraud and "you're willing to enter into a repayment plan, you'll find our bankers are willing to work with our customers during this time of need," Sanchez said.

The delay will be most helpful to those who have already received notice that their bank plans to foreclose on their home but who are waiting for the bank to schedule a sale.

The foreclosure process can take anywhere from two months to a year, but most often takes several months, banking experts say.

University of Florida law professor Jeffrey Davis said that the governor doesn't have the authority, on his own, to mandate a halt to foreclosures but delaying the "completion" of foreclosures could be helpful.

"The bank is in the driver's seat," Davis said, "they can put the breaks on."