You Can Stop a Mortgage Foreclosure Sale by Filing an Answer to the Lender’s Foreclosure Complaint
Challenging a lender’s foreclosure complaint and stopping a foreclosure sale can be accomplished by homeowners with the filing of an answer to the foreclosure summons. Foreclosure Answer forms should set forth affirmative defenses, including but not limited to the lender’s violation of the Truth in Lending Act. Recently, a judge in Suffolk County, New York, awarded $100,000.00 in punitive damages to a couple who were abused by their mortgage lender.
Shadow Inventory – Confusion Reigns
There is currently no shadow inventory of bank-owned (REO) properties. What’s more, a surge in REO properties is not likely anytime soon.
If this sounds familiar, it’s because I’ve said it before, here and here and other places. However, it still seems to be news (see the recent WSJ article) and despite the fact that the most recent CA Foreclosure Report from ForeclosureRadar.com runs the numbers, some still insist the shadow is there.
September CA Foreclosure Report – More on the “shadow” inventory
This month’s report features not only a new look, but an important new statistic – Bank Owned (REO) Inventory. By looking at the number of foreclosures the banks have taken back and subtracting those that have since resold, we are able to show the number of foreclosures the banks have held as inventory over time.
Click here to download the September CA Foreclosure Report.
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Short Sales – Time to Take Control
I mentioned previously (http://www.foreclosuretruth.com/blog/sean/are-foreclosure-sales-simply-h…) that as a society we don’t have the political will to foreclose on every mortgage in default. As a result, we see government interventions including foreclosure moratoriums, troubled asset relief, and new loan modification programs. However, these are at best stop gap measures — each failing to adequately reduce principal balances to address the core problem of negative equity.
It’s time to stop waiting for a government bailout or for the bank to come take the house. Homeowners in default don’t have to choose between the lesser evil of foreclosure or a government solution that leaves them a prisoner of debt. There is another way — a short sale.
Are foreclosure sales simply HAMPered?
In my last post Waiting to catch a wave? Surge of REO’s unlikely, I speculated that foreclosures had dropped primarily because of U.S. Treasury Secretary Henry Paulson’s announcment to seek troubled asset relief for banks. The result being that banks are incentivized not to foreclose thanks to mark-to-model accounting changes, and an implied promise that the Fed or taxpayers will take bad loans off their hands at a premium if necessary.
This topic, and shadow inventory, which I also recently posted about, have been hot topics in the blogosphere and in the news. Many have predicted a wave of foreclosures is coming, while others are predicting that foreclosures are being held off the market to manipulate home prices. If you read my recent posts you know I have a different take. A few days ago, Diana Olick of CNBC did what I hoped someone would do and put the question directly to Bank of America. They essentially said that foreclosures had been delayed by the Making Home Affordable program, and would likely increase soon.
Waiting to catch a wave? Surge of REO listings is unlikely.
For a number months now I’ve been telling reporters and others that I didn’t think we would see the big wave of foreclosure sales, and subsequent REO listing that some have been predicting. Until recently that was mostly based on a gut level feeling that banks (servicers) simply didn’t have the will to complete more foreclosures given the anti-foreclosure backlash. With a little hindsight, things have become clearer.
Is REO inventory hidden in the shadows?
I’m regularly asked about the so-called “shadow inventory” of bank owned homes that are supposed to flood the market at any moment. First, lets be clear about what shadow inventory is. These are homes that the bank has already foreclosed on, but has not yet listed. It obivously does not inlcude homes the bank has already sold, nor the ones it has listed for sale.
June Foreclosure Report: Moratorium has unexpected impact – may be short lived
ForeclosureRadar.com released its June 2009 CA Foreclosure Report today. While foreclosures were generally trending upward, Notices of Trustee Sale unexpectedly dropped, apparently due to the new California Prevention Act that went into effect June 16th. Despite the majority of major lenders in the state receiving an exemption from the act, filings dropped by nearly 50 percent as soon as the act went into effect. Filings were climbing back toward previous levels by the end of June so we still expect the law to have little long term impact.
How Bankruptcy Can Help Stop Foreclosure
By Timothy McFarlin -
If pre-foreclosure resources have been expended and the lender had formally initiated foreclosure proceedings, bankruptcy is an option to stop foreclosure if a short sale or obtaining a deed in lieu of foreclosure fails. Bankruptcy can stop all debt and is an option if your debt grows too difficult to clear.
Bankruptcy could [...]
Expect little change from new moratorium
Lots of calls today from folks wanting the scoop on the “new moratorium” here in California. Seems that some have misinterpreted the new law and believe that it may have a big impact.
The new law adds 90 days to the existing 3 months between the filing of a notice of default and a notice of trustee sale, but exempts servicers (lenders) who put in place a loan modification program.