The National Consumer Law Center has published a report “Foreclosing A Dream” on “ANTIQUATED” LAWS IN MOST STATES TILTED AGAINST HOMEOWNERS ARE FUELING THE U.S. HOME MORTGAGE FORECLOSURE CRISIS.”
The report went on to say that the foreclosure laws in 3 out of 5 states allow a “Fast Track” foreclosure.
What was interesting is that 33 of the States do not require direct notification to homeowners when the foreclosure initiation begins. The NCLC reported that most States have outdated
provisions that make the laws very “Homeowner Unfriendly.” These State laws take away the basic protections that homeowners should be required to have. Because these basic protections
are not in place it is adding to the foreclosure crisis that this country is currently experiencing. It is currently expected that as many as 8 million homeowners are expected to lose their homes over the next 4 years.
This wave in foreclosures will fuel the need for a loan modification Ca homeowner program , to allow homeowners that want to keep their home to modify their loan terms down to a more affordable payment.
According to the NCLC report:
During the foreclosure process in 30 states including the District of Columbia, A mortgage lender can take homeowners that have fallen behind in their payments, and bypass the courts and move directly to take away and auction off homes. There is no direct notification of the foreclosure proceeding, and there is no requirement that homeowners be personally served with a foreclosure notice or legal documents that start a court foreclosure case. In this case the homeowner has no due process to protect their basic home ownership rights.
The process to stop the foreclosure process requires the homeowner to get a Judge to review the process and stop the foreclosure preceding, not to mention the added cost to expedite this procedure.
In every state but California and Connecticut, mortgage holders can move directly to foreclosure without being required by state law to consider or discuss ways to avoid loss of the home with homeowners, such as through a loan modification Ca homeowners program changes of the terms of their loan.
Under the Eleventh-hour payment provision, 29 states can ignore this provision. The mortgage lien holder has no obligation under state law to stop foreclosure even if the homeowner, just before the house has been sold, comes up with the money to catch up on the owed payments and all incurred penalties and fees.
Their can be large penalties that can make it nearly impossible for homeowners to come up with required funds to make their payments at that last minute. In every state but Massachusetts, New Jersey, and Pennsylvania, a mortgage holder who claims a homeowner has fallen behind in payments can immediately impose default fees and costs that reduce the chances that the homeowner can catch up by making the payments owed.
Adding injury to insult, there are more penalties after the home is lost and sold at auction. In 36 states and the District of Columbia, mortgage holders can pursue so-called “deficiency judgment” claims against homeowners even after the foreclosed home has been sold at auction. The lenders seeking to recover the difference between the amount owed on the loan and the amount collected from the foreclosure auction, can be pursued without conditions in 15 states and the District of Columbia, and only under certain conditions in the other 21 states.
John Rao, staff attorney and report co-author, National Consumer Law Center, stated: “The bottom line is that most state laws are not part of the foreclosure crisis solution today; they are a big part of the problem. Most Americans not well-versed in property law would assume that homeowners have greater rights than renters, or at least equal rights. The stark reality is that while most states updated their landlord/tenant laws decades ago to give renters basic due process protections in the eviction process, no similar reform effort has been made to assist homeowners in the foreclosure process. Many state foreclosure laws were enacted in the 19th and 20th centuries and have gone largely unchanged since that time. These laws came into effect at a time when the residential mortgage industry, to the extent it existed at all, bore no relation to what exists today. Significantly, these laws pre-date the enormous changes in the mortgage market that began in the 1980s.”
Geoff Walsh, staff attorney and report co-author, National Consumer Law Center, said: “The foreclosure crisis continues to spin out of control. Modernization and improvement of state foreclosure laws can significantly help blunt the impact of the crisis on individual homeowners and communities. The method by which homes are foreclosed in this country is almost exclusively controlled by state law. States have historically decided under what circumstances a homeowner can lose a home to foreclosure and what procedure a mortgage holder must follow. This traditional role for states presents a tremendous opportunity for state policymakers to take a fresh look at their foreclosure laws. While reform of state foreclosure laws will not end the current foreclosure crisis, it can significantly reduce the number of foreclosures.”
The States should mandate a judicial process over foreclosures of all residential mortgages. States should abandon the power of sale method and require judicial foreclosure, and they should adopt homeowner due process protections. States should require mortgage holders to consider loss mitigation, including a loan modification Ca program and other workout alternatives, as a condition to allowing the foreclosure of a home.
Publisher- Michael Kench Uncategorized loan-modification-ca
