The Timeline For Foreclosure Has Changed

I am constantly looking on the web for foreclosure information which may be available to distressed homeowners. Trying to see if there's actually any help that might be available to a homeowner in (or on the verge of) foreclosure. In doing this I searched youtube recently and did some other blog searches and what I found mostly was some simplified time lines on the foreclosure process. Not a lot more that that. The general time lines given were pretty much the same across the board. What I found is that the majority of blogs and videos are failing to recognize the effect of the volume of foreclosures in the United States on a lender's ability to foreclose. The effect of volume on what would otherwise be the typical time table for the initiation and completion of a foreclosure. The majority of information found on the web gives a generic time table for what's going to happen and when - which in this environment is really not that helpful. Of course, all we need do is look in to the predicament of today's lenders to get a much different picture of reality.

There are many many mortgages which were bought by banks and lenders in what's called "mortgage pools". This is essentially the selling of a number of mortgages grouped and sold together. As a result of having purchased pools of mortgages from sub-prime lenders, a number of lenders now face potential liquidations. These purchases are sometimes coupled with the lender's own defaults which can deteriorate a lender's financial position. Bear Sterns is a good example of a company which is essentially defunct because of indirect and direct investments in mortgages. A company which was recently bought by JPMorgan Chase for little or no money. The reason for the Bear Sterns collapse was directly related to it's mortgage based holdings. And the question now becomes, exactly what happens to all of those mortgage based holdings as JP Morgan Chase takes over their operations. Well, of course, they don't dissolve automatically. But clearly the transition is going to add a significant amount of time delay in actually getting the defaulted mortgages foreclosed. Employees are being fired, new management is taking over old management, there are offices and boxes of paper work being moved and reassigned. So if Bear Sterns held your mortgage chances are JPMorgan Chase isn't coming to foreclose on your home any time soon.

In addition to failing lenders, takeovers, and reorganizations, there is the equally troubling problem of sheer volume. If you are a lending institution and suddenly the number of foreclosures you handled last year has suddenly doubled, how do you handle that added burden? Well you could reassign double the employees to cover it. Unfortunately, Wall Street firms have not hired but have rather fired more than 30,000 employees in the last seven months. So they actually have less labor to handle more defaults than they did when there were half as many! The solution is to put the newest foreclosures on the back burner while you push the oldest ones ahead. And in doing this you obviously change the time table of all the new foreclosures that you may need to do.

And who is filing all these foreclosures? Well of course attorneys like myself. Mostly in-house legal counsel. The problem with this is two fold. The first problem is that attorneys are limited in the number of cases they can actually handle. Maybe a twenty percent increase is possible without hiring additional help, but double the case load is probably not okay. Secondly, these lenders, already on the verge of financial ruin, are probably not running out with fists full of cash to pay (the more expensive) outside counsel the fees they want to do the additional work. All this leads me to imagine piles of cases in boxes in some in house counsels office that no one is working on – at least not just yet.

And last but not least, we have the court system. A precariously balanced machine which usually explodes when you add too much gas. What about this added burden? Double the case load in the courts is (in my mind) double the time for a case to reach fruition. So even if you have been served with foreclosure papers, the legal proceeding may get stalled in the court system. When you consider that many savvy borrowers are contesting the foreclosures in court, the court is being further burdened. In this economic jungle nothing is easy.

So the bottom line in all this is that anyone who today gives you some foreclosure time line in days, months, or even years, is not a critical thinker. Critical thinking tells me that this is not the norm and the time line is definitely longer than it used to be. How long? Long...Which all translates in to more time and more opportunities for homeowners to take action to try and save their home!

Foreclosure Slam: Stop Foreclosure Free, Save Your Home is a web site dedicated to free foreclosure help and free foreclosure advice for parties in foreclosure or behind on their mortgage payments. Our site includes the Save your Home From Foreclosure Survival Kit which is a free resource available without a download. No information is ever requested to use our site.

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Foreclosure Slam: Stop Foreclosure Free, Save Your Home

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