The amount of foreclosed homes is one thing still weighing down the economy. And many are stuck on the market because banks can’t find the ownership documents.
Why? Turns out Wall Street cut corners when creating mortgage-backed investments—and didn’t want old fashioned paperwork in the way. And now when banks want to evict people they are finding that the legal documents behind mortgages aren’t there.
Even worse, it seems that banks—in order to cover their tracks—hired companies to recreate missing mortgage assignments and provide the legally required signatures of bank vice presidents and notaries.
Now to avoid foreclosures, desperate homeowners are countersuing banks over the document disaster—leaving houses unsold indefinitely and stalling the recovery.
Many foreclosed banks are still stuck on the market because of lost ownership documents.
As it turns out, most borrowers who have modified their mortgages through the government sponsored Home Affordable Modification Program are likely to default. In fact, somewhere between 65% and 75% will default within the first year. Many borrowers find modifying their mortgage did little to solve their other debt problems, and still end up in either foreclosure or short sale. This comes as little surprise, as borrowers who have modified their loans spend, on average, 64% of their monthly income paying off debt. Should any small emergency arise they are often unable to pay the monthly minimums on their debts. It would be nice if there were a better plan.
Crescent Village is a nice project in Eugene, to the north of Costco. Tens of millions have been spent on it, and it’s a visionary new urban development; a mini-village with about everything you’d want.
Some of the townhouses on Lord Byron are an especially good deal these days. Originally listed in the 500’s, 4 of them are now bank-owned, as a result of the housing crisis, and are now in the 300’s. That’s a savings of about 150K!
I’ve shown them before, and they’re not for everyone. The fit, finish and materials are superb, but it’s up-and-down living, which puts some people off. But, if you want something hip and cool, where the action is, I’d give them a look. Give me a call at 517-6543 if you’d like to see them.
Foreclosures in Crescent Village are a good deal for buyers.
New protection for tenants will be in effect at the end of the week, according to the Register Guard, if their rental is in foreclosure. Federal law will allow tenants at least 90 days to move after foreclosure, if they’re on a month-month basis, or allows them to finish out the terms of their lease, unless the new buyer of the foreclosed property intends to use it as their primary residence, in which case there’s a maximum of 90 days. According to the Guard, New Oregon law will allow tenants to apply their deposit to their final days in the house, if they choose to do so.
I’m basking in my 15 minutes of fame. Our local CBS station, KVAL, interviewed me for their piece on foreclosures and short sales in Eugene. Guess I’m working on the big fish in the small pond theory 🙂