From Foreclosure to Free Home as Time Runs Out for Lenders

Written by Posted On Thursday, 08 October 2015 14:29

Five years of missed mortgage payments and the champagne comes out. The cause for celebration? Lenders exceeding the statute of limitations for completing the foreclosure process and the owners keeping the home – while not paying the mortgage for years. Many call it “getting over”; others call it a win for the “little guy” and others are just exhausted with the entire topic because in the end, banks just pass on costs to consumers anyway.

Since housing prices peaked in 2006, roughly 6.7 million Americans have lost their homes to foreclosure with another 800K+- in the foreclosure pipeline. Tens of thousands of homeowners have missed more than five years of mortgage payments, many of them clustered in states with judicial foreclosure proceedings like Florida, New Jersey and New York, where lenders must get judges to sign off on foreclosures. This neither fast or easy; in fact many homeowners in duress just stopped paying the mortgage knowing full and well that they could live in the home for an extended period essentially for free. As the years roll on, lenders are discovering that they may never be able to seize the homes because the state statutes of limitations have been exceeded.

Crazy? We think so and so does at least one judge:  

“No one gets a free house,” Judge Michael B. Kaplan of the United States Bankruptcy Court in Trenton wrote in an opinion late last year, reflecting what he characterized as a longstanding “admonition” he and others made during the foreclosure crisis. But after effectively ending a New Jersey homeowner’s foreclosure case in November because the state’s six-year statute of limitations had expired, he wrote in his opinion, “With a proper measure of disquiet and chagrin, the court now must retreat from this position.”

So no worries; don't bother with hiding assets or strategically defaulting. Just rely on the one constant - the slow, grind of the courts and the ability of tons of paperwork to do the work for you.

Read more at The Hank Miller Team site.





Rate this item
(0 votes)
Hank Miller, SRA

Hank Miller is an Associate Broker & Certified Appraiser in the north metro Atlanta area. Since 1989, real estate has been his full time profession. Hank´s clients benefit from his appraisal and sales experience; they act upon data, not baseless opinions. He is an outspoken critic of the lax standards in the agent community.

Hank remains an active certified appraiser and completes specialty work for FNMA, lenders and attorneys. He is a well-known blogger and continues to guest write for multiple industry publications as well as national outlets like the WSJ, NYT, RE Magazine, USA Today and others. He is a regular on public Q&A sites on Zillow, Trulia and many others.

Hank consistently ranks in the top 1% of all agents in the metro Atlanta area. He runs the Hank Miller Team and is known as much for his ability as he is for his opinions. He is especially outspoken about the lack of professional standards and expectations in the real estate industry.

Agent Resource

Limited time offer - 50% off - click here

Realty Times

From buying and selling advice for consumers to money-making tips for Agents, our content, updated daily, has made Realty Times® a must-read, and see, for anyone involved in Real Estate.