Even though the Federal Government has spent billions trying to help homeowners stay in their homes in the wake of the widest sweeping recession of my lifetime, many are still falling through the cracks. Some places it’s worse than others.
The Tri-State Defender reports on a bill Congressman Steve Cohen has introduced to help homeowners, and some of the realities that struggling homeowners face in this tough economic environment.
From the article:
Usually, a homeowner who misses a mortgage payment has about 15 months before the home is sold at auction, according to Lender Processing Services Inc., which tracks mortgages.
Tennesseans in trouble, however, are riding along the foreclosure fast-track. The typical foreclosure timeline is just two months in this state, Realtytrac, another group reports. Borrowers behind on their mortgage payments don’t have much time to come up with Plan B: a loan from a family member, a second job, or even a short sale.
Why? In many other states, judicial foreclosures are the norm. A company has to go to court to secure a writ of execution to sell a home. Then the home is scheduled for auction, a process that can that can take months. In Tennessee, out-of-court proceedings are most often used. A clause in a mortgage or deed of trust authorizes the lender to sell the property, if the borrower defaults. After the homeowner misses a payment, the trustee assigned in the deed of trust has the authority to begin the foreclosure process and advertise the property for sale.
WOW. Did anyone know that you could lose your home after missing just one or two payments? That’s pure madness!
Thankfully, there may be a solution.
The Preventing Homeowners from Foreclosure Act also would help fund local outreach efforts to make distressed homeowners aware of the program and of special loss-mitigation tools that may help them save homes.
The homeowner-lender conferences seek to ensure that financial institutions are using the loss-mitigation tools put in place by the Treasury’s Making Home Affordable program, the U.S. Department of Housing and Urban Development, Federal Housing Administration and other entities, to help qualified homeowners stay in their homes.
This won’t fix the problem we have here in Tennessee, that will be up to the State Legislature, but at the very least it may provide some relief and assistance to homeowners who are struggling under the weight of their mortgages. We can’t continue to let people who have spent years and thousands of dollars to keep their homes lose them to an economy that is acting more and more like a Black Hole every day.
Kudos to Congressman Cohen on the effort. I hope it passes soon.