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 ...
“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.
Could an anonymous “Good Samaritan” make a loan payment on the lender’s behalf and restart the clock?
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.
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
“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?
D’oh! Great idea! Now, who would be that kind?
Florida's role in the 2000 election of GWB. The NYT just can't let it go.
“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.
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.
I don’t see why not.
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.
Crime/dishonesty does pay?
Anyone that misses one payment should be thrown out in the street!!!
What a cluster.
It shows how educational this forum is!
If the deadbeats fail to pay their property taxes, they will not own their homes, the government will.
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.
“Good. Banks must bear responsibility for sitting on their rights. Lol”
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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.
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