As lenders increasingly favor the faster and more lucrative short sale process, those deals outnumbered purchases out of foreclosure for the first time in the U.S. Citing data from Lender Processing Services, Bloomberg News reported that short sales accounted for 23.9 percent of home purchases in January, while foreclosures represented 19.7 percent of sales. [more]
Posts Tagged ‘distressed homeowners’
Intended to simultaneously punish banks for their foreclosure practice and help American homeowners in distress, the $25 billion federal foreclosure settlement contains significant elements that reward banks for standard practices and do nothing to alleviate troubled homeowners, according to the New York Times.
The settlement stipulates that banks give at least $17 billion to help borrowers who have “the intent and ability” to stay in their homes. [more]
New York judges are beginning to take a stricter interpretation of the “good faith effort” banks are required to make under a 2009 state law passed to offer support to distressed homeowners, according to the New York Daily News.
The law states that banks must try to negotiate with distressed homeowners so that they can modify the loans and keep their property. But those homeowners are increasingly complaining that they can’t get modifications. Since November, 2009 judges have found at least seven cases where banks, including Wells Fargo, HSBC, Bank of America and Deutsche Bank, failed to act in good faith, and in one case the judge ordered the mortgage debt wiped out (although that was later reversed by an appeals court)…. [more]
Funding has run dry for more than 120 legal aid agencies across New York state that provide counsel to distressed homeowners, the New York Times reported. A federal stimulus program has financed the agencies since 2009, but by the end of this year that money will be completely spent. Some Democrats tried to ensure the survival of these agencies by allocating $4 million of the state budget towards foreclosure-prevention spending for the three months between the end of the federal financing and the beginning of the state’s next fiscal year. But their proposal was unsuccessful, and so too was a $1.5 million budget earmark proposed by Brooklyn Assemblyman Vito Lopez that was vetoed by Governor Andrew Cuomo…. [more]