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I just read an article about Bank of America giving away as many as 150 vacant and abandoned houses in and around Chicago–working with city officials in an effort to prevent neighborhood blight. This situation epitomizes what might happen on a national level if we’re not careful.
Before the robo-signing debacle, the time frame to foreclose on a house was getting longer and longer. As a result of robo-signing, every foreclosure has been put into question. The consequences are devastating in judicial foreclosure states like New York where the average foreclosure now takes 966 days–that’s right, over two and a half years for each house. The national average is up to 318 days according to RealtyTrac. Rick Sharga, senior vice president of RealtyTrac, told Bloomberg TV, “At current sell-through rates, it would actually take us almost 12 years to work through that inventory.”
We have to work through these foreclosures, and we have to work through them as quickly as possible. The housing market will not fully recover until then, and the longer distressed houses stay vacant and abandoned, the more our nation is at risk for neighborhood blight.
I realize that robo-signing is an unethical and illegal practice, but let’s remember one important point: robo-signing is not the cause of a homeowner being foreclosed on. The cause of foreclosure is a homeowner not paying their mortgage. In a lot of cases, homeowners are not just three or four months behind on payments, they are twelve or more months behind before a lender finally initiates foreclosure proceedings.
I find it illogical to put responsible homeowners further underwater and continue to stall a housing market recovery over a technicality.
As a nation, we should be scrutinizing foreclosure processes to figure out how to streamline them, not disrupt them. We read news stories all the time about homeowners that have prevented lenders from foreclosing on them due to legal loopholes–allowing the homeowner to live rent-free during the process. Who is the real bad guy here?
It’s easy to blame the lender. The greed of banks and Wall Street contributed to the mortgage crisis; however, we have to stop viewing a homeowner that is not able to, or worse, chooses not to pay their mortgage as an innocent victim. They are not. How many renters have lost their job, had their rents go up astronomically in the last year, or hit financial hard times–making it hard for them to pay their rent? They do not have the option of just not paying; they’ll be evicted within weeks. How many homeowners have not been able to pay their mortgage through no fault of their own, yet are willing to face the consequences of this in a responsible manner?
My heart goes out to everyone that faces tough times. All of us have been hit hard, and I think each of us knows at least one family that has lost their home. Dragging out the foreclosure process by challenging each foreclosure on a technicality–ignoring the glaring fact that the mortgage has not been paid for a very long time–will simply prolong the inevitable for that homeowner, but more importantly, it puts other homeowners further underwater. Is this really the greater sense of justice? I think not.
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Foreclosures: Streamline not Disrupt
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Before the robo-signing debacle, the time frame to foreclose on a house was getting longer and longer. As a result of robo-signing, every foreclosure has been put into question. The consequences are devastating in judicial foreclosure states like New York where the average foreclosure now takes 966 days–that’s right, over two and a half years for each house. The national average is up to 318 days according to RealtyTrac. Rick Sharga, senior vice president of RealtyTrac, told Bloomberg TV, “At current sell-through rates, it would actually take us almost 12 years to work through that inventory.”
We have to work through these foreclosures, and we have to work through them as quickly as possible. The housing market will not fully recover until then, and the longer distressed houses stay vacant and abandoned, the more our nation is at risk for neighborhood blight.
I realize that robo-signing is an unethical and illegal practice, but let’s remember one important point: robo-signing is not the cause of a homeowner being foreclosed on. The cause of foreclosure is a homeowner not paying their mortgage. In a lot of cases, homeowners are not just three or four months behind on payments, they are twelve or more months behind before a lender finally initiates foreclosure proceedings.
I find it illogical to put responsible homeowners further underwater and continue to stall a housing market recovery over a technicality.
As a nation, we should be scrutinizing foreclosure processes to figure out how to streamline them, not disrupt them. We read news stories all the time about homeowners that have prevented lenders from foreclosing on them due to legal loopholes–allowing the homeowner to live rent-free during the process. Who is the real bad guy here?
It’s easy to blame the lender. The greed of banks and Wall Street contributed to the mortgage crisis; however, we have to stop viewing a homeowner that is not able to, or worse, chooses not to pay their mortgage as an innocent victim. They are not. How many renters have lost their job, had their rents go up astronomically in the last year, or hit financial hard times–making it hard for them to pay their rent? They do not have the option of just not paying; they’ll be evicted within weeks. How many homeowners have not been able to pay their mortgage through no fault of their own, yet are willing to face the consequences of this in a responsible manner?
My heart goes out to everyone that faces tough times. All of us have been hit hard, and I think each of us knows at least one family that has lost their home. Dragging out the foreclosure process by challenging each foreclosure on a technicality–ignoring the glaring fact that the mortgage has not been paid for a very long time–will simply prolong the inevitable for that homeowner, but more importantly, it puts other homeowners further underwater. Is this really the greater sense of justice? I think not.
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