The Future Of Foreclosure Actions???


Someone once said to be careful of what you wish for as you may just get it. The voices clamoring for court help with foreclosures are getting their day in the sun in New York at least according to an article that appeared in the June 19th New York Times.

If you read the article, pay attention to the “voluntary” part and how it is phrased. I think the ground work has just been put in place to make it a mandatory program, at least in New York. I also think this program has the potential to change how trust deeds are foreclosed against. If I am right, the entire foreclosure arena as we know it will change dramatically.

By change dramatically, I mean it will spread throughout the United States and be mandatory in all 50 states. It will also be mandatory that every foreclosure pass through the local courthouse on its way to a settlement of one kind or another. It could mean short sales may be a thing of the past.

Before I go off the deep end and list a string of predictions, I’ll stop and ask anyone who reads the article to add their 0.02¢ to this thread. I believe New York has let a train out of the station that can’t be stopped. But that is how I think. You may have a different idea.

By the way, when you see the word voluntary attached to an attribution of a government official, think income tax. The government says it is voluntary. Until you don’t file that is…

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  1. Colin Stafford on

    Court involvement? Well, that should slow down the recovery then!

    Offering help to those in need is one thing, but how can anyone imagine that mandatory processing through the legal system – one that is already too slow, expensive and complex – help anything?

    Spare us from this!!!


  2. James,

    It is hard to argue with your “it is more expensive” scenario as you hit the nail square on the head. Your “COMPS” remark is also right on point. You state 2011 as the possible turnaround date. Could very well be especially if more and more states adopt the go to court idea and it gets transformed into something they legislate.

    Settlement conferences are wonderful tools. However, they have built in time constraints as you know. Plus, a settlement conference can be manipulated. Having said that, I need to say I realize it may be too far out for the virgin idea NY has introduced.

    It is my opinion this is just the start of something we haven’t even imagined. After all, court decisions become stare decisis in a hurry and, as you know, are often used as persuaders in other jurisdictions.

    Do a little research in the credit arena and you’ll see what may have started out as a good idea got twisted and turned and churned into something it was never intended. I think, stress think, we are seeing the first sands of what will be ground work in the foreclosure arena.

    Oh yeah, the social security number – twisted, turned and churned completely out of shape. It has become the magic identifier which is a role it was never intended to play. Try getting a phone or electricity turned on without surrendering that little jewel.

    Phew, I can’t wait for the next installment…

  3. Well certainly it is interesting to see there is change in the way foreclosures are dealt with. Hopefully this change will be long lasting and long lasting. I appreciate your postings and your entire blog which has so much vital information. Hopefully many other readers will be blessed and educated by your posts as well.


    The Foreclosure Doctor

  4. Mike Sebeniecher on

    I am a real estate investor in Charlotte, NC and I have worked on several short sale deals in the past few months and the main thing that I have learned is that the majority of the people in foreclosure, at least in Charlotte, are the uneducated low income first time homebuyers. They got loans from self motivated lenders who embellished their incomes and credit scores and the future homeowners had no idea what they were doing. When they get a foreclosure notice and receive a court date to appeal their foreclosure, they generally do one of three things. They either think it’s over and decide to move out, with no warning or forwarding address. They skip the court date, because they forgot, had to work, or just don’t care and live rent free until they are kicked out. Or, they go to the court hearing unprepared and say nothing of any relevance and lose the judgment. I find the last scenario playing out on a daily bases. A lawyer hired by the bank against and uneducated and unprepared homeowner. I will take the lawyers chances any day of the week

    It’s a new day, new deal, new opportunity

    Mike S. – Texo Properties

  5. With the rising numbers of foreclosures happening I am not surprised at the court system getting involved. I don’t think this will help investors as they have been able to get to people on the span of the foreclosure process. This might change the way investors go about this.

    However short sales have helped a lot of people because they did not have to have the foreclosure notice on their credit for 10 years.

  6. I never mind or care for how much is the foreclosures.It depends on how we select the investment field and how much efficient and strong is the trust depends on the borrower and investor!!

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