The Rest of the Foreclosure Story …

If you only read the headline (“North Texas Foreclosures Drop”) on a recent Fort Worth Star-Telegram article, you might think the situation was improving. The paper reported that residential foreclosure postings in the four primary Metroplex counties were the lowest in three years for the coming May auction, and were down 23 percent over the 2010 number.

Obviously, there’s more to the story, and later in the article there’s a hint as to the reason for this big plunge: “the drop likely results from lenders backing down from filing notices because federal regulators said there were problems with the foreclosure process.”

Of course, just because lenders are easing off the foreclosure accelerator pedal doesn’t mean the problem is going away. Not at all. The latest national report indicated there are an estimated two million U.S. homes where the owners are currently behind on their payments or facing foreclosure. That is a huge backlog of delinquencies that could lead to yet another tsunami of foreclosures in the coming months.

We’re out there every day talking to DFW-area homeowners, lenders, and agents about short sales, and I can tell you that I certainly don’t see any decrease in the number of homeowners getting into trouble. So even though there may be a lull – whether it is because lenders are watching their steps more carefully or for some other reason – that lull, unfortunately, is at best temporary.

Comments 1

  1. Jessica

    The lender’s power of sale rfrees to the clause in the original mortgage documents that allow the bank to take a house to a public auction without going through the whole lawsuit process. It is used in nonjudicial foreclosure settings, which are the predominant types of foreclosure proceedings in California.The other type of foreclosure, judicial foreclosure, is rarely used in California and only when the loan documents do not have the power of sale clause, or if the bank wants to pursue a deficiency judgment against the owners after the sheriff sale. Since most homeowners have little other assets than the house, it is usually not worth it for the bank to go after another judgment after foreclosure.The power of sale clause, to be accepted most easily, needs to specify the time, date, and place that the sale can be conducted. Obviously, it doesn’t have to go so far as to name specific months, days, or years. If these aren’t mentioned in the documents, then additional guidelines would have to be followed in order to use nonjudicial foreclosure.There are still notice requirements for the lender to be able to sell the foreclosed house in this manner, and there is no redemption period after the auction. Homeowners have 90 days after the initial notice of default is sent to cure the default, but if they are unable to do so and the house is auctioned, the lender can not sue them for a deficiency judgment afterwards.Hope that answers your question.ForeclosureFish

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