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Foreclosure to Home Free, as 5-Year Clock Expires
The New York Times ^ | 29 March 2015 | Michael Corkery

Posted on 03/30/2015 9:14:54 AM PDT by Theoria

In September, Susan Rodolfi celebrated an unusual anniversary: five years of missed mortgage payments.

She is like a ghost of the housing market’s painful past, one of thousands of Americans who have skipped years of mortgage payments and are still living in their homes.

Now a legal quirk could bring a surreal ending to her foreclosure case and many others around the country: They may get to keep their homes without ever having to pay another dime.

The reason, lawyers for homeowners argue, is that the cases have dragged on too long.

There are tens of thousands of homeowners who have missed more than five years of mortgage payments, many of them clustered in states like Florida, New Jersey and New York, where lenders must get judges to sign off on foreclosures.

However, in a growing number of foreclosure cases filed when home prices collapsed during the financial crisis, lenders may never be able to seize the homes because the state statutes of limitations have been exceeded, according to interviews with housing lawyers and a review of state and federal court decisions.

“No one gets a free house,” Judge Michael B. Kaplan of the United States Bankruptcy Court in Trenton wrote in an opinion late last year, reflecting what he characterized as a longstanding “admonition” he and others made during the foreclosure crisis. But after effectively ending a New Jersey homeowner’s foreclosure case in November because the state’s six-year statute of limitations had expired, he wrote in his opinion, “With a proper measure of disquiet and chagrin, the court now must retreat from this position.”

It is difficult to know for sure how many foreclosure cases are still grinding through the court systems since the financial crisis.

(Excerpt) Read more at nytimes.com ...


TOPICS: Business/Economy; Culture/Society; Government
KEYWORDS: foreclosure; home; mortgage
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To: MeganC

“I can’t imagine that there’s not a compelling reason why a money-grubbing bank would not follow through on a foreclosure unless by doing so they’re somehow making MORE money.”

Here’s what I think you are missing:

Say the person bought the house for $500k, but after the crash, it is only worth $250k on the market. If the bank forecloses, they have to eat that loss. They can only sell the property at the market rate, so they not only lose $250k, but they also can no longer pretend that they have a $500k asset on their books, to make their financial situation appear to be in better shape.

If they don’t foreclose, then they can hope to pester the homeowner into making payments again, and perhaps eventually get their $500k, or, at least keep the $500k asset on their books, which makes their balance sheet look better.


41 posted on 03/30/2015 9:53:09 AM PDT by Boogieman
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To: MeganC

Could an anonymous “Good Samaritan” make a loan payment on the lender’s behalf and restart the clock?


42 posted on 03/30/2015 9:53:52 AM PDT by FoxInSocks ("Hope is not a course of action." -- M. O'Neal, USMC)
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To: buckalfa

Not possible they can print up the paper they need as fast as the Fed prints money and then all they have to do is swear that it is true and accurate and have somebody any body sign them.


43 posted on 03/30/2015 9:53:54 AM PDT by Kartographer ("We mutually pledge to each other our lives, our fortunes and our sacred honor.")
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To: lurk

There is a moral requirement on lenders to not make loans they know cannot be repaid. The banking system abandoned this and now has to pay some price... To try to portray this as some how one sided is silly.

If someone knows you make $1000 a month and makes you a loan witha $600 a month payment they are acting immorally.

The idea that the loan taker is the only one with questionable morales in the housing bubble situation is nonsense


44 posted on 03/30/2015 9:54:45 AM PDT by HamiltonJay
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To: dalereed

“The laws in those states needs to be changed so that it doesn’t take a jdge/court to forclose!”

Right, who needs pesky “due process” anyway?


45 posted on 03/30/2015 9:55:04 AM PDT by Boogieman
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To: FoxInSocks

D’oh! Great idea! Now, who would be that kind?


46 posted on 03/30/2015 9:55:18 AM PDT by Obadiah
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To: Theoria
But the laws in places like Florida could prove to be a wild card. In a state where “hanging chads” helped decide the 2000 presidential election, a legal technicality could help settle the state’s foreclosure crisis.

Florida's role in the 2000 election of GWB. The NYT just can't let it go.

47 posted on 03/30/2015 9:55:39 AM PDT by cicero2k
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To: PapaBear3625

“If the bank rules were changed so that the banks have to start writing down the asset-value of the loan if the payments are more then two months behind, then they would be faster to foreclose, and faster to sell the foreclosed house rather than keep it on the books and pretend it still had full value.”

Yes, and this practice also interferes with the market prices of all homes, artificially inflating them. The banks are restricting the supply, thus driving up the price.


48 posted on 03/30/2015 9:58:36 AM PDT by Boogieman
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To: MeganC

There you go. As your experience attests, the bank wants solid, performing loans on its books, not real estate. Real estate on their books is the very asset disposition problem they want to avoid. A bank will do almost anything to avoid ending up with an REO...especially at a time when they’re having to foreclose on a significant percentage of their outstanding loans. They’d rather sell an REO at a massive loss than pay the ad valorem taxes on it.


49 posted on 03/30/2015 9:59:53 AM PDT by Milton Miteybad (I am Jim Thompson. {Really.})
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To: FoxInSocks

I don’t see why not.


50 posted on 03/30/2015 10:01:22 AM PDT by MeganC (You can ignore reality, but reality won't ignore you.)
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To: Kartographer
Spot on observation. Had a friend in WV who tried to start a business that offered foreclosed home protection and maintenance services to out of state lenders. He had few takers, but most lenders simply were not interested or did not have the paperwork to back their claims. I guess it is cheaper to eat the loan than having to spend money to enforce your claim through the courts.
51 posted on 03/30/2015 10:01:38 AM PDT by buckalfa (First time listener, long time caller.)
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To: Boogieman
Right, who needs pesky “due process” anyway?

Non-judicial foreclosure is due process.
52 posted on 03/30/2015 10:02:14 AM PDT by Milton Miteybad (I am Jim Thompson. {Really.})
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To: Vigilanteman

There are at least 5 properties like this within a 2 block radius of my house they are semi foreclosed for 5-6 years now. None are for sale and according to a foreclosure investor there is two reasons for such, one the Bank doesn’t want to take the ‘hit’ and two they haven’t been able to untangle the note to a point where they know for sure who holds it. Those are the worse as the management companies stopped taking care of the place because no one is paying their fee so the house sits and deteriorates and becomes not only a eye sore, but worth less and less as time passes.


53 posted on 03/30/2015 10:02:18 AM PDT by Kartographer ("We mutually pledge to each other our lives, our fortunes and our sacred honor.")
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To: Kartographer

Crime/dishonesty does pay?


54 posted on 03/30/2015 10:03:07 AM PDT by blam (Jeff Sessions For President)
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To: Boogieman

Anyone that misses one payment should be thrown out in the street!!!


55 posted on 03/30/2015 10:03:28 AM PDT by dalereed
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To: Theoria

What a cluster.


56 posted on 03/30/2015 10:04:58 AM PDT by Altura Ct.
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To: Kartographer
I'm curious as to what part of New Mexico you are in as I thought this type of crap was only going on in either (a)places like Florida and Las Vegas where the real estate market was going nuts until 2006, then crashed shortly thereafter or (b)places like Detroit or the Mon Valley where economic deterioration and population loss over time left a surplus of unused housing.

It shows how educational this forum is!

57 posted on 03/30/2015 10:07:45 AM PDT by Vigilanteman (Obama: Fake black man. Fake Messiah. Fake American. How many fakes can you fit in one Zer0?)
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To: God luvs America
what about real estate taxes due on these homes???

If the deadbeats fail to pay their property taxes, they will not own their homes, the government will.

58 posted on 03/30/2015 10:08:07 AM PDT by Jeff Chandler (Doctrine doesn't change. The trick is to find a way around it.)
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To: dalereed

Right, so when it comes to pass that banks file fraudulently, before we can verify that everything is in order, we’ve already made people homeless. Great plan.


59 posted on 03/30/2015 10:14:29 AM PDT by Boogieman
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To: The Cuban

“Good. Banks must bear responsibility for sitting on their rights. Lol”
******************************************************************************************************
It’s sad to see FReepers reveling in theft and freeloading. Corruption and lack of morality is beginning to expand further and further in our country.


60 posted on 03/30/2015 10:15:41 AM PDT by House Atreides (CRUZ or lose!)
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