The Survey Said, “Auction, Postpone or Cancel,” A Foreclosure Enigma

Results of the latest government foray into the housing crisis have recently been reported. It seems that only 342 sales were completed through September. The Home Affordable Foreclosure Alternative (HAFA) program premiered in April with great anticipation.

The new process for deciding foreclosures?
It finally seemed a program had been put in place to deal with escalating homeowner defaults. Realizing modifications were getting nowhere, it appeared legislation had finally arrived to address the non-response from lenders and provide answers which consumers were seeking. A time line was published along with parameters enabling homeowners to qualify. Now it seems that the people and institutions which the program was to address never got the email.

In fact most of the attempts to address the high rates of mortgage defaults and foreclosure have met with less than satisfactory results. Maybe the reason can be attributed to the size and scope of the problem. When the sky begins to fall, providing a quick and equitable solution to a problem may seem good in theory, but in all practicality proves useless.

A condo was in foreclosure for 15 months
The major benefit which has been provided to consumers by the government was similar to the discovery of rubber. It was unintended. The benefit being bureaucracy and delay. In most cases. In a recent post, I wrote about the unfair process. Some lenders seem to be very lenient and bend the rules like a rubber wishbone and other lenders enforce the default process to the letter of the law.

Draw Straws

On Monday, November 29, a total of 18 properties were scheduled for foreclosure in Pasadena. The auctions were to be held at various courthouse locations in Los Angeles County. How many do you think actually went back to the bank or were sold to a third party. If you said “zero” you are correct. 16 were postponed and 2 were canceled. When you hear the housing market can’t find a bottom and it is a result of the shadow inventory, this is what is being referred to. The properties in foreclosure which are not being foreclosed upon.

No delays & foreclosed in about 122 days

As stated before, empirical data seems to suggest the lender will have their own policy in regards to foreclosing. If I am in the unfortunate situation of being late on my house payment and have received a “Notice of Default” what do I do? I know confusion reigns supreme at this point. Do I stay or do I go? Do I attempt a Short Sale or take my chances with Foreclosure? The uncertainty of forecloure could be much worse than the eventual action.

1 thought on “The Survey Said, “Auction, Postpone or Cancel,” A Foreclosure Enigma”

  1. I love how much opinion you have about certain topics in the industry. The goverment is messing things up in all areas of the real estate industry. The recent $600 billion they dedicated to buying mortgage bonds has actually caused mortgae rate sto go up .5% in just two weeks!

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