The housing crisis continues to be an obstacle to the economic recovery. Hundreds of thousands of homes continue to face foreclosure, but for a variety of reasons, mortgage companies are reluctant to foreclose.
If a mortgage company forecloses on a home they have the full responsibility of maintaining the dwelling. Adding additional dwellings to a mortgage company’s inventory does little to help the market. If the house sells at a loss this affects the net worth of the mortgage company.
Mortgage companies, who do not foreclosure, may have the benefit of having the homeowner continue to live in the home, and pay for upkeep insurances and taxes. The homeowner will also be responsible for paying any homeowner’s association dues. Technically, if the house is not foreclosed, the house still belongs to the homeowner, whether they are paying their mortgage or not. The homeowner’s association dues are the responsibility of the homeowner. Only filing for bankruptcy will temporarily prevent the association from collection.
The foreclosure deadlock may soon be coming to an end. According to a news article posted on the Huffington Post website on May 18, 2011, written by Shahien Nasiripour:
A set of confidential audits made by Washington DC federal auditors on the nation’s five largest mortgage companies accuse them of defrauding taxpayers in their handling of foreclosures on homes purchased with government-backed loans. “The five separate investigations were conducted by the Department of Housing and Urban Development’s inspector general and examined Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial, the sources said. The audits accuse the five major lenders of violating the False Claims Act, a Civil War-era law crafted as a weapon against firms that swindle the government. The audits were completed between February and March. The internal watchdog office at HUD referred its findings to the Department of Justice, which must now decide whether to file charges.”
According to the article, the five firms have already offered $5 billion to compensate for all the claims. All 50 state Attorney Generals have jumped into action making claims on behalf of their states. Some speculate the firms will have to pay as much as $20 billion before it is all said and done.
All of the government entities involved will certainly fight for the revenue, but others argue the money should be returned to the debtors who lost their homes in the illegal foreclosures.
Rather than punishing banks for their misdeeds, the current administration is focused on helping troubled borrowers, hoping to stem the tide of foreclosures and increase consumer confidence.
Many state officials want the firms fined and the money paid to the state, No one knows who will win the battle for control of the funds, but it is unlikely that the funds will help with the current foreclosure crisis.
If you are facing foreclosure filing for bankruptcy may offer you protection. If you need help filing for bankruptcy, contact a bankruptcy lawyer.
If you need relief from the stress of debt and you live in or around the metropolitan areas of Riverside or San Bernardino, California, contact us at www.betterbankruptcy.com .We will help you find a bankruptcy attorney in your area who will answer your bankruptcy questions.
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