Ways to Improve Management of Foreclosures

Here’s an interesting article written by an attorney who handles foreclosures…….

With a 3 percent decrease from 2011 and a 36 percent decrease from when foreclosures peaked in 2010, the total number of foreclosure filings has decreased in recent months, according to RealtyTRAC. The data gives hope to the industry after a few years of the housing crisis. Although the housing market is on the upswing, the reality of worried homeowners who cannot afford to pay their mortgage still exists.

By taking the following steps, state governments and loan providers can relieve homeowners of the uncertainty and distress the risk of foreclosure causes.

Handling Communication Better

Getting in touch with a lender or loan servicer can be difficult. Borrowers frequently get passed around to many different people when they call their loan provider, leading to disorganized communication. Often, the homeowner must explain his or her situation many times when speaking with different people of the same company, or important paperwork becomes lost after being handled by several people. Some homeowners report that they ultimately fax the same document multiple times to different people from same company. A single point of contact for each borrower would lead to concise, efficient communication for homeowners.

Decreasing Backlogged Cases

Foreclosure documents filed in states that handle foreclosures solely judicially have some of the longest periods of processing. Florida foreclosure lawyers file documents that take nearly 29 months to process, compared with the nation’s average of 13 months. Attorneys and courts are faced with a buildup of cases and more uncertainty for homeowners. States that handle cases through administrative processes in addition to judicial-foreclosures generally have shorter processing times for foreclosure-related documents.

Shielding Homeowners from Harm

A couple states, such as California, have drafted homeowner bill of rights measures to protect homeowners and further regulate the mortgage and housing relief industry. The law prohibits a few actions linked with predatory lending: “dual tracking,” which is when a lender continues a foreclosure process even if the borrower is applying for a loan modification, and “robo signing,” a term consumer advocates describe as the robotic signing and production of falsified mortgage documents. California’s law also states that lenders must provide a single contact for the borrower, and provides the borrower the right to sue lenders for significant violations of the new laws. 

California has seen a 7 percent reduction in foreclosure activity since its bill of rights law went into effect on January 1. If more states passed similar laws, the United States might see less foreclosures and more hope for the recovery of the housing industry.

– By Sarah Parr
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