More Banks May HAVE to Sell at Foreclosure
Filed Under Auctions, Foreclosures |
It is the norm for big banks foreclosing in Massachusetts to use the process simply as a title clearing procedure. The way it works is that there is minimal marketing and the bid process involves the foreclosing attorney “bidding the debt” or bidding the full amount that the bank has into the property. Very often the debt is more than the value of the property in this market. Next the bank takes the property back and then puts it in queue for disposition through their REO department.
Once the property hits the REO department the first order of business is to evict anyone in the property. In some cases those evicted are the former homeowners but in many cases the evicted are tenants. A proposal that would require “just cause eviction” for lenders would prevent those evictions. Lenders are not equipped to be landlords. If this were to become law you can bet that the foreclosure process will change significantly in Massachusetts.
On the surface it seems like this could be a long way down the road, but the fact is that Massachusetts law makers have been hustling to do something, anything, to turn the foreclosure tide. We might see this become reality sooner rather than later.
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