Acton Real Estate Blog – The Right (and Need) to Foreclose

By Victor Normand
Published: October 2010

Property foreclosure has touched the broad spectrum of homeowners all across the country.  What began as a problem limited to borrowers who had over extended themselves in order to buy a home, mostly involving lower income, often first time buyers, many of whom did not fully understand the consequences of variable rate mortgages, the limited re-financing options of low down payments, or the risks of an economic downturn, has spread through all economic strata by the effects of the recession and job loss.  From Subprime borrowers to cashiered executives, home foreclosure has become a painful reality.

Foreclosure is always the lender’s lease favored option.  It is the most costly and time consuming and complicated process even under normal circumstances.  Add to the mix some careless if not devious practices by some lenders and mortgages holders, which clouded titles, and foreclosure becomes a train wreck.  Loan modifications work sometimes to stave off foreclosure, though the track record among subprime borrowers is not good, and title issues, if they exist, remain to be straightened out at a later date.  Short Sales can save money if not time, though they require incredible patience while due diligence proceeds, and title issues must still be dealt with.

Stopping all foreclosures will bring all mortgage lending to a halt.

Despite all the frustration and downright anger caused by lenders as they move mortgages about the globe, and the subsequent calls for a halt to all foreclosures, reason must prevail.  In the first instance, when all else has failed, foreclosures need to happen, whomever ultimately is owed money on a defaulted mortgage in entitled to recourse, that’s the contract both parties agreed to.  In the second instance, if foreclosures are halted by law, even for a brief time period, alllending for homes will come to a halt, even for the best credits.  No bank or mortgage company will lend money on a home without the absolute ability to efficiently access its collateral.  Even small steps taken to halt foreclosures across the board could chill the mortgage.