This past week I completed advanced training in foreclosure defense. The recent statistics are ridiculous. Since April 2008, there have been approximately 250,000 foreclosure filings in the State of Maryland. Odds are that you know somebody who has gone through a foreclosure or is about to go through a foreclosure.
It’s going to get worse. The foreclosures are affecting the middle class and “good” loans. Commercial real estate is about to take a hit. And, if you remember two years ago, the foreclosure crisis managed to bring the entire global economy into a recession.
Some homes can be saved. Others cannot. The wisdom is determining which is which.
It seems like a no-brainer. The banks want their money back and the homeowners want to stay in the house. If the homeowners can afford anything reasonable, the banks are better off reducing their profits by modifying the loan and getting some income rather than spending huge sums on the foreclosure process and ending up with a damaged property when the angry homeowner rips the sink off the wall before they are evicted.
From my experiences, the most frustrating part about foreclosure defense is trying to get someone from the bank on the phone who can talk about a loan modification or even negotiate a deal. That’s why I’m very pleased with the new mandatory foreclosure mediation passed by this year’s General Assembly. It forces the banks to come to the same table as the homeowner to discuss options. It doesn’t violate anyone’s right to contract or their right to private property. It simply forces them to talk for two hours, even if no agreement is reached.
That’s all my clients and I want!
A large Democratic majority voted for the bill. Delegates Kipke and Schuh also voted for it and I thank them for it. The third member of our delegation voted against it.
The good news from the recent training was the large number of attorneys who have stepped forward in this crisis to take on pro bono clients and go to bat for the little guys. It’s stuff like this that makes me proud to be a lawyer.
Do I have any solutions at the governmental level to the foreclosure crisis? I have a few suggestions, mostly procedural tweaks to the current system.
Do I have any solutions at the individual level? Yes. Deal with the situation as early as possible. Take a realistic look at your finances. Is your mortgage payment 35% or less of your gross monthly income? If yes, you’re probably okay. If not, look into getting a cheaper house. Squirrel away at least two months worth of mortgage payments for a rainy day. And banks, I’m embarrassed even to have to tell you this: a positive cash-flow is better than a negative cash-flow. Talk to the people, they want to pay you.
Protect your future. Vote Chiappelli.
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