What’s Worse Than Foreclosure? Banks Dumping Properties
In what some call the next wave of the sub-prime mortgage crisis, banks in several older industrial cities hard-hit by foreclosures are declining to foreclose on properties because legal and maintenance costs are higher than the value of the real estate.
Instead of being an unexpected salvation for besieged homeowners, bank “walkaways” only add to homeowners’ problems, partly because they usually learn of their home’s legal status months later, after they’ve moved out of the house. So money-stressed homeowners go through the heartache of believing they’ve lost their home to foreclosure, move out and only later learn they’re still responsible for the mortgage when the sheriff’s sale is cancelled.
Cities like South Bend, Indiana; Buffalo, New York; Kansas City, Missouri; and Jacksonville, Florida are seeing an uptick in such walkaways, the New York Times reports. In fact, Buffalo city officials sued 37 banks in 2008 for causing the deterioration of 57 abandoned properties. Foreclosed properties may start out in decent condition, the story said, but by the time the sheriff’s sale is scheduled, they’ve been vandalized, looted and stripped of value to such an extent that it’s not even worth it for the bank to hold onto such properties to try to recoup any money through the sale of fixtures, appliances or hardware.
Legally, it seems that the homeowners in these cases still own the property until an actual foreclosure sale takes place.
If a bank notifies a homeowner that it has started foreclosure proceedings, causing the legal owner of the property to vacate the premises, who should be held responsible for protecting the value of the property? More importantly, should lenders be permitted to do a last-minute reversal of foreclosure proceedings after they’ve begun?
Tags: bank walkaways, foreclosure, homes in foreclosure
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Reader Comments
I went to work for a Loan Modification Network that’s what they called themselves. I quit do to they kept calling people who were on the DNC list which is illegal to do. I have proof and believe this company is a scam and he does collect money upfront to supposeably help them. Can anybody help me put this business that there doing to a stop. I don’t know who to report them. They have two locations one in Irvine California and the other one is in Lake havasu City, AZ
June 1, 2009 10:58 pmHi, Paula.
You can file a complaint with the Federal Trade Commission. To file a complaint regarding abuse of the Do Not Call List specifically, visit here:http://www.ftc.gov/bcp/edu/microsites/donotcall/cases.html
Here is the contact info at the FTC to file other complaints:
Michael Tankersley,
Bureau of Consumer Protection
202-326-2991
Phillip Tumminio,
Bureau of Consumer Protection
202-326-2004
You can also file a complaint online at the FTC at https://www.ftccomplaintassistant.gov/.
In addition, I would file a complaint with your state attorney general’s office. Most states offer consumers the ability to file a complaint online as well.
I hope that helps.
June 2, 2009 8:14 amPaula, here is the link for California consumer complaints on the CA attorney general’s website:
June 2, 2009 8:15 amhttp://ag.ca.gov/consumers/general.php
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