The threat of foreclosure could damage your credit to the point of irreparable and force you to lose your house. Even though you hate the possibility of foreclosure, should you find yourself short on payments You want the process to be done swiftly. Why? In the event that homeowners get notice of foreclosure, but not until the sale is completed homeowners are left in an impasse. The cost of property taxes and mortgage payments add up and credit gets damaged as foreclosure progresses.
That’s what was the case for a woman living in Buffalo, New York. Following a fall and becoming incapable of caring for her home her home, she chose to let her bank foreclose on her property to recover some of the money. The lawyer she hired believed that the process could take just six months, however it was actually seven years. In order to accelerate the process she joined forces along with the Assemblymember and launched the “Shame Campaign” to publicly shame banks into speeding up foreclosure processes. The campaign put up hundreds of posters across the Buffalo region that read “Shame on banks, insert bank’s name hereand for not having completed the foreclosure procedure.” The campaign was successful. Three months later, after the “Shame Campaign,”” the bank was finally able to complete the foreclosure process. That was after 7 years and 3 months.
Debtors are taking the most extreme procedures to end the foreclosure process on their houses this raises the question how can banks legally delay foreclosures, to the disadvantage of the borrower?
The Delay Foreclosure
There are many mortgage lenders who are unwilling to finish their foreclosure proceedings as they are hesitant for a variety of motives. So long as properties remain unforeclosed and are classified as assets instead of a bad loan on banks’ books. The banks do this considering the future. So long as the property remains considered an asset banks are viewed favorable should it join or be bought by an other company.
Additionally, there are a variety of expenses related to foreclosure. Banks may not want to close because they do not wish to incur attorneys’ fees and other costs to file for foreclosure. Also, they will have to renovate and restore the property in the event that the prior owner was a delinquent one and sacked the property. It is also possible that the bank will decide not to acquire ownership of the property since they would be required to pay the property’s preservation costs and any additional costs associated with the property. That is that the bank would need to cover insurance, taxes and electric bill. Additionally, the bank will need to cover the expense of expulsion for any tenant who is still on the premises that is complicated and expensive.
In the end the banks could choose not to pursue foreclosure in the event that they have initiated legal proceedings. As for suspects, they have an constitutional right to an “speedy trial” there’s nothing legally requiring banks to speedily foreclose. Banks are able to delay foreclosure for as they wish to defer the multitude of expenses associated with foreclosure. The pressure on banks to finish foreclosure might be the only option to accelerate the procedure.
Zombie Title
Additionally, in addition to the delay in foreclosure, banks could start foreclosure proceedings as well with the help of a notification of foreclosure. Then, they may end the foreclosure. It is referred to as “Zombie title.” Zombie title is also known as a right to own and control of the home which remains in the hands of the person who claims that he has lost their home due to foreclosure.
It’s hard to imagine that banks could decide not to close on the property after they have begun the foreclosure process. However, it is more frequent than one would imagine. It is common in regions where the lender doesn’t want to take the maintenance of the property, and is looking to cut costs on taxes on property. If the property is occupied by squatters or it is in a state of terrible disrepair then the bank might decide to get rid of the property entirely.
States which have the highest percentage of abandoned properties are New Jersey, New York, Florida and Illinois. They have a large percentage of foreclosures as a result of the lengthy foreclosure process within these states. As the foreclosure process can take too long, homeowners tend to leave their homes.
Because title remains under the owner’s name as a legal entity, the homeowner is obliged to pay for costs and debts such as tax on the property, maintenance for the property and HOA fees. Homeowners may not be given an email from the bank advising them to cease foreclosure. In the end, any loans owed to the property could be rediscovered by homeowners unaware they’re still on the title and have to be able to pay for these expenses.