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Sudden Screeching Halt to Foreclosures?

October 13, 2010
Half million dollar house in Salinas, Californ...

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Well, they are in trouble again.  No doubt you have heard the news that the big box banks have been “robosigning” off on foreclosures without looking to make sure they are doing things right.  The three biggies, Bank of America, JP Morgan and GMAC were the ones who got caught first.   I havent heard who else has been added to the list but Im sure that everyone has suddenly started to read what they sign (imagine that!).  Of course,  the phone started ringing off the hook with my shortsale sellers wanting to know how this effects them.  Well, first, as we live in the state of Georgia, it doesnt (unless your loan is with Bank of America who has halted foreclosures in all 50 states). 

 When it comes to foreclosures, we are considered a non-judicial state which means that there is no court intervention when foreclosing on someone, no court, no court rules to break.  The foreclosure is handled without the foreclosure process is determined by state statutes, which in our case consists of a notice of default letter, a demand to pay letter, a period of public notice and a public sale, among other details .  A judicial state handles things differently-through the courts, and the borrower has a right to appear and state their case, hence the legal recourse opportunity from the borrowers. Now,  upon first reading this, you may think “of course people should have a right to stand up and defend themselves!”   Well, if you think that, move to another state, because thats’ not how things are done here.  But before you do, think about this- are we really going to be in a better position by delaying the inevitable? 

These states that are halting foreclosures are prolonging the agony in my opinion.  The “you dont stay, you dont pay” way we handle things makes perfect sense and I dont think anyone can disagree with that- even those that arent paying but are still staying.  They know that they will be kicked out at some point, and to have that hanging over their heads month after month must be unimaginably stressful.  You arent paying, you know you wont be able to stay, get out, move on, and begin your financial recovery.  Think about this.  While the judicial states are sitting around in a state of limbo, we are pulling off the proverbial band-aid- when we are well on the way to recovery because our foreclosure inventory has come and gone, they will still be slogging through heavy numbers of homes on the market and trying to move towards a more balanced market.  As painful as this is, lets keep going- we arent going to get to the other side of this mess if we dont!

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