America Is Finally Putting Home Foreclosure Crisis Behind It
It’s taken nine years, but the number of U.S. homes in foreclosure has fallen to a level not seen since before the 2008 housing crisis.
More troubled borrowers are making their way through the foreclosure process, which can take more than five years on average in some states. The number of properties in active foreclosure declined by 24,000 to 631,000 in March, according to Black Knight Financial Services. That’s the lowest since October 2007. Neighborhoods across the country were in the coming years flooded with more than 2 million notices from banks.
The wave of foreclosures crested in 2010 when banks seized a record 1.2 million properties and served even more with notices of default, auction or repossession. People suffering from the worst economic crisis since the Great Depression just “mailed their keys to the banks and just said ‘take it’,” said Ben Graboske, a chief technology officer at Black Knight.
The huge inventory of foreclosures has taken years for lenders and borrowers to work through. “We are finally getting back to a very clean slate,” Graboske said.
What could possibly go wrong? pic.twitter.com/0LO3CStW8F
— Will Truman (@trumwill) May 1, 2016
Profs: violates ADA for banks to consider poor credit history if poor financial choices result of mental illness. https://t.co/eYPSjcNCbV
— tedfrank (@tedfrank) May 1, 2016
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4 Responses to What Could Possibly Go Wrong?
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Foreclosure should never take five years to work through. A good part of that is the result of the securitization of the mortgage industry, which was only profitable if the banks and trusts took massive shortcuts on the record keeping. Effectively, the finance sector turned mortgages into a variation of Schrödinger’s cat: until foreclosure actually starts, no one can say which subset of hundreds/thousands of bond holders actually holds your mortgage and has authority to foreclose. Only after the foreclosure starts is it possible to say, “Oh, that mortgage belongs to this tranche and these bondholders.” Which may change even as the foreclosure proceeds.
And if the records are foggy enough, and you have a judge whose patience has worn thin, perhaps you can get the title free & clear, since the banks failed to keep clear records.
violates ADA for banks to consider poor credit history if poor financial choices result of mental illness.
Translation – if you are under psychological care, you are no longer legally able to enter into contracts, just as if you were a minor. Sure, good idea, people will either jump at it as a way to get out of contracts, or they’ll avoid care in order to avoid not being able to enter into a contract, or companies will require psych evals prior to contract signing to avoid people claiming psych problems as a way to break a contract.
Yeah, I can smell the unintended consequences a mile away. (“You have anxiety issues? Sorry, you’re going to have to get someone to co-sign for you before you can buy a car”)