Wednesday, April 1, 2009

Abandoned Homes

First it was homeowners walking away from foreclosures. Homeowners who knew they couldn't make their payments were walking away from their houses before they were foreclosed on, so that they could get other housing before their credit was ruined.

Now banks are walking away, as well.

The NYTimes reports that banks are finding it less valuable to take possession of a foreclosed home than to just walk away from the whole ordeal.

It sounds like this could be a silver lining for some homeowners, but that's not the case:

According to the NYT, "The so-called bank walkaways rarely mean relief for the property owners, caught unaware months after the fact, and often mean additional financial burdens and bureaucratic headaches. Technically, they still owe on the mortgage, but as a practicality, rarely would a mortgage holder receive any more payments on the loan. The way mortgages are bundled and resold, it can be enormously time-consuming just trying to determine what company holds the loan on a property thought to be in foreclosure."

Finding out who owns the mortgage is the same problem that foreclosure mitigation specialists and lawyers run into when they're trying to either have a bank with a homeowner or file a class action lawsuit.

Says one industry inside: “The whole purpose of foreclosure is to take title of the property, sell it and recoup what money you can. It’s just a sign of the times that things are so bad no one wants to take possession of the property.”

And that's crazy, that something that is most Americans' largest investment, just isn't worth the court costs and legal fees.


Naomi Van Tol said...

Damn... I was hoping this was an April Fool's post.

marycash said...

Well, nothing could compare to CPOP's April Fool's post (which I would link to if comments linked, but they don't) so I didn't even try. My favorite part: Fine Art Supporters and Golfers Who Walk!