Foreclosure Missing Piece?
February 14, 2008 by Bob Schenkenberger · Leave a Comment
So the Government and the Mortgage industry are close to figuring out the Foreclosure debacle. The proposal now will give an extra 30 days to try and figure it out.
In Colorado, that means that you can miss a couple payments, and then by law, the lender (through the public trustee) gives you a Notice of Election and Demand. Then you have 110-125 days to cure the default.
What are these extra 30 days going to do? I guess if you are in the middle of it, right now, and you have done nothing to remedy the situation, then the 30 days breathing room might be great. My guess is it means the person going into foreclosure will just get to live rent free for another 30 days!
The more pragmatic solution, would be for these mortgage companies to handle this mess on their own. Hell, they created it! If I were the CEO of one of the big guys, I would hire enough people and empower them to make wise business decisions. If the problem is truly the interest rate hike is making it impossible for a homeowner to make their payments, the mortgage company could simply determine what is affordable for the owner, and then decide if they would like to modify the terms of the loan, or foreclose. Make a business decision!
The lenders know the cost of foreclosure, it’s huge! The problem is the lenders have people who get paid an hourly wage to push paper for the sole purpose of getting the paper off their desk. If that means send it to the attorneys for foreclosure, so be it. The person who is dealing with these issues doesn’t care if it would make more financial sense to work out a solution. It is simply more expedient, and more costly mind you, to push the paper somewhere else. EMPOWER YOUR PEOPLE! See this post for real life examples!
The reality is many of these loans are un-saveable. The owner lost a job, or something else has happened such that they are in so deep over their heads, the only way out is to, get out. But many are salvageable, if only the mortgage community would wake up!
Bob has been an active REALTOR for 18 years. During this time, he has closed over 500 transactions, and has been the broker of record for 1000's more. Bob can be reached via email (bob@gethomedenver.com) or phone (303.770.1180.)
