Foreclosure bill doesn’t go far enough to prevent zombies

From HousingWire:

Senate to consider wide-ranging bill to address zombie foreclosure “crisis”

Mortgage lenders and servicers could soon have a whole new set of responsibilities for maintaining foreclosed homes, as Sen. Bob Menendez, D-NJ, introduced a new bill on Friday that would address what his office calls the “zombie foreclosure crisis.”

Zombie foreclosures are homes that are vacant or abandoned during the foreclosure process, and in the last several years, several states have undertaken efforts to stem the rising tide of abandoned homes.

In many cases, the town or city in which the property is located is left on the hook for maintaining the abandoned property due to the property being left in “legal limbo,” Menendez’s office said.

Late last year, Menendez and his fellow New Jersey senator, Cory Booker, D-NJ, sent a letter to the heads of the Department of Housing and Urban Development, the Federal Reserve Board, the Consumer Financial Protection Bureau, the Federal Housing Finance Agency and others, telling the agencies that the prevalence of zombie foreclosures in the state is seriously impacting the state’s residents and its economy.

According to Menendez’s office, New Jersey had the highest foreclosure rate in the nation in 2015 with over 35,000 foreclosure filings. Menendez also noted a recent report from RealtyTrac, which showed that he state has the most vacant zombie foreclosures in the nation with 4,003.

“Zombie foreclosures threaten our communities and scare away new homebuyers and investors, which leads to neighborhood blight and plummeting values of surrounding properties,” Menendez said Friday.

“We need to do all we can to keep families in their homes and ensure mortgage lenders are invested in the communities they serve,” Menendez added. “This legislation stands up for New Jersey’s struggling homeowners, and prevents the banks from turning their backs on borrowers, on their neighbors, and on the community at large.”

Menendez announced the bill in East Orange, New Jersey, surrounded by housing advocates and local officials, all of whom pledged their support for Menendez’s bill.

“Our neighbors and neighborhoods are still trying to recover from the foreclosure crisis and the outbreak of zombie foreclosures that have menaced our communities,” said Staci Berger, president and chief executive officer of the Housing and Community Development Network of New Jersey.

This entry was posted in Foreclosures, Housing Recovery, National Real Estate, New Jersey Real Estate. Bookmark the permalink.

17 Responses to Foreclosure bill doesn’t go far enough to prevent zombies

  1. grim says:

    In order to really address foreclosures, they would need to set a mandated foreclosure timeline significantly shorter than the current.

    You fix the zombie problem by foreclosing swiftly.

    NJ caused the zombie problem by sandbagging the foreclosure process.

    Why is there no discussion of the fact that many of the things NJ did to stall foreclosures and keep homeowners in houses they couldn’t afford was the real factor in creating this backlog?

    Move to non-judicial foreclosure. One of the major reasons California was able to quickly reverse it’s crisis was that foreclosures are rarely handled by the courts, and foreclosures take approximately 100 days.

  2. Anon E. Moose says:

    Non-judicial FK? Why do you want lawyers’ kids to starve? [I kid, I kid]

    “Stir up much strife among they people, Lord, lest thy loyal servant perish.”

  3. grim says:

    Foreclosure is the solution, not the problem.

    Just keep repeating the mantra until you understand.

  4. Anon E. Moose says:

    Interesting Brexit news, from ESPN of all places. On the even of the Wimbeldon fortnight, the beating the GPP has taken has directly impacted the value of the prize money, particularly to the international group of top contenders.

  5. Anon E. Moose says:

    Redux [3];

    even => eve

  6. Anon E. Moose says:

    Grim [3];

    Completely agree. Been with you on that train from the beginning.

  7. Ben says:

    One thing I have noticed is that when there isn’t much of a balance looming on the property slated to be foreclosed, it happens pretty damn quickly. On the other hand, my grandmother has a home in Bergen County. My uncles both live in it and the mortgage and taxes haven’t been paid in 6 or 7 years. One of them is a hoarder and has absolutely decimated the property. The bank still hasn’t come knocking.

  8. Bye Bye EU says:

    Think of the added cost to a loan because of this bill. It’s like a hidden indirect tax put on mortgages to pay for the upkeep of forclosures. Just pass the cost onto the middle class that has to take out loans to purchase a home.

  9. We should just outlaw home mortgages. Pay cash and actually own your home from day one or rent, it’s up to you. Homes are unaffordable and rarely paid off because the gubmint got in the lending game. Same problem as college edumacations.

  10. Boris Johnson for VP? He and Trump can buy hair coloring in bulk. He was born in NYC.

  11. Essex says:

    just sit back and watch it all burn

  12. I think I hear some gnashing of teeth outside.

  13. D-FENS says:

    Blood in the streets. Get your money ready.

  14. 30 year realtor says:

    While searching for properties to bid on at sheriff sales all over North Jersey I come across foreclosure actions started in 2008 and 2009 regularly.

  15. 30 year – If you wandered over to Morris County you’d find that’s the majority of them. The banks would tank the neighborhoods and turn their good loans bad if they foreclosed with any swiftness. And then what would you do with all that REO and no buyers or renters? Instead of cash for keys the banks should entertain something novel like a deed for rental lease exchange. The occupants could pretend like they still own their house.

    While searching for properties to bid on at sheriff sales all over North Jersey I come across foreclosure actions started in 2008 and 2009 regularly.

  16. The ride down is far from over. Consider shorting TIF, SIG, DISCK, UAL, AAL, AME

    Blood in the streets. Get your money ready.

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    Bonne continuation à vous. Amicalement

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