The Real Deal Miami

Banks declining possession after foreclosures

March 30, 2009 11:07AM

In the latest development in the housing crisis, banks are now sometimes choosing not to take possession of properties at the end of the foreclosure process because the cost of possession is higher than the value of the property. Properties are instead being returned to their owners, who face additional maintenance costs because the properties have been vacant for months. Bank walkaways are most quantifiable in states where foreclosures are processed through the court system, experts said. But the courts process foreclosures in only about half of the states, so it’s hard to count bank walkaways. Kermit Lind, a professor at Cleveland-Marshall College of Law and a foreclosure law expert, said bank walkaways could be “the next wave of the crisis.”