Banks and other financial institutions are in the loan business. They make loans based on the understanding that they will be repaid both the principal and interest. This is how they make a profit.
Banks usually wait until a mortgage borrower is more than three months behind before initiating foreclosure proceedings. It is generally more profitable for a bank to resolve non-payment issue without resorting to foreclosure on the home. Lenders are in the money business, not the real estate business. They want to make loans and receive interest and principal payments on those loans. They don’t want to own real estate. When a bank takes possession of a home in foreclosure, their money is tied up in the foreclosed home.
Neglected Homes
Some of the homes taken back by financial institutions need major repairs and upgrades. Some of these homes have been empty for a considerable period of time and have been vandalized or neglected by the prior owners. Banks do not want to get involved in the repairing of homes they’ve taken ownership of in foreclosures.
Foreclosures in Depressed Market Prices
The recent increase is in the amount of foreclosure proceedings brought by financial institutions have further depressed the price of homes.
Price Reductions In Foreclosures
In neighborhoods with high foreclosure rates, the prices of all the homes in these neighborhoods are negatively affected. The sale of homes at bargain prices has a negative effect on the construction industry. Jobs are lost in the process. Suppliers of wood, steel and aluminum to the construction industry are losing jobs because of reduction in their business.
We assist our clients in all aspects of foreclosure defense. We meet with our clients and provide our clients with foreclosure options. These options involve mortgage modifications, litigating defective mortgages, defective foreclosure lawsuits, predatory lending, bad faith and other real estate related issues.
We discuss foreclosure related bankruptcy filings. These can be either Chapter 7 or Chapter 13 bankruptcies. The filing of these bankruptcies immediately stops the foreclosure from moving forward. We also assist our clients in re-establishing credit and, in some circumstances, we can eliminate second mortgages by filing bankruptcies. Call us for a free consultation. Thank you for reading my foreclosure blog.
