Everywhere you turn these days, people are talking about the foreclosure mess. And now speculation has it that the banks have $10 per hour employees sitting in their office signing affidavits, corporate assignments and the like for the banks to deal with their foreclosure files without reviewing the documents for accuracy and completeness.
The so-called Robo Signing scandal occurred because proper processes were not always followed. When a big bank buys another big bank, there needs to be a corporate assignment of the first bank's mortgage assets from the seller to the buyer. Even though the sale had been consummated, often times the mortgage assignments were not properly executed. However, that in and of itself does not make a foreclosure invalid. Even the White House has backed away from endorsing a national foreclosure moratorium.
Somewhere down the line, these properties will go into foreclosure. Nothing is being accomplished by delaying the inevitable. Chances are the house will be lost by the homeowner anyway. These loans are delinquent and borrowers are not paying their mortgages. Even as banks, borrowers and regulators battle over how much faulty documentation by lenders should impede foreclosures, fresh evidence shows that the housing market is at best unstable.
Over the last year, home sales continued to fall sharply from 2009 levels and now, according to the National Association of Realtors, prices are again beginning to drop after a period of equilibrium. Housing sales in September 2010 were 19 percent lower than in September 2009 nationally. Two months earlier, in July, sale dropped 26 percent from the previous year.
How long should a foreclosure take - Non Judicial vs Judicial
The process of a non-judicial foreclosure is not rocket science but it can be complicated.
Twenty seven states are non-judicial foreclosure states. These states do not require a judicial review of foreclosures. The grounds on which homeowners are allowed to challenge the banks are so narrow and the chance that the suits will be dismissed is so high, most attorneys decline to take the cases. The homeowners are left on their own to challenge the lenders.
Even in states that require a judicial review, judges often rubber stamp foreclosure filings. In Florida, for example, foreclosures are handled by special foreclosure courts that have been called “rocket dockets” because of the speed that handle the foreclosures.
In a perfect world, a foreclosure should take approximately 121 days from the date of the recording of the Notice of Default (NOD). In today’s environment though, the timelines are being stretched to 150 days or more. Add in the moratoriums and Attorneys General across the country admonishing lenders and hoping for re-election, and these dates are being pushed back more and more.
The NOD is the document that starts the clock ticking for the foreclosure process. Once the NOD is filed in the county that the property is located, the borrower has a 90 day redemption period to cure the default. During this time, the borrower has the right to bring all past due payments including principal, interest, late fees, advances by the lender such as taxes and insurance current. If that is not done during the 90 day redemption period, the trustees will next record a Notice of Sale (NOS) at the county recorder.
At this point, the borrower can no longer just bring the loan current. The entire loan balance must be repaid to the lender in cash or by a refinance or other means. The trustee must advertise the property being sold at Trustee Sale on the specified date no sooner than 20 days after the recording of the NOS. If the loan is not satisfied, the lender has the right to take the property to sale on the steps of the county court house on the specified date and time.
Attorneys that represent servicers say that they are not surprised consumer lawyers are looking for any reason to stop the foreclosure process. After loss mitigation efforts fail, borrowers are searching for ways to stay in their home regardless of the payment status on their loan.
It is a very unfortunate situation for borrowers who may or may not have understood the terms of their loan. However, the health of the economy will not improve until all of these loans have run their course and allowed the free trade market to correct itself. The longer this takes, the longer the economy will suffer. We need to work thru this as quickly as possible to restore the real estate market and the overall health of the economy.
QualityFirst is a full service Real Estate Company specializing in REO properties. Quality First Real Estate provides a broad array of real estate services including representing sellers in listings, buyers on the purchase of properties, mortgage loans for purchase and refinance, home marketing for lenders and home managers, and property management. With decades of successful experience in the Southern California real estate industry, working with a wide range of individuals and companies, QualityFirst can provide ALL the services needed for those looking to sell or purchase REO homes and properties.
Investors and buyers looking for great opportunities on a REO or short sale home can directly access the online listings of bank owned homes for sale at www.qualityfirstrealestate.com/bank_owned.php
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