There are several type of title cloud issues which are rearing their ugly head. The biggest two are:
- “Ops! I Changed My Mind I Don’t Want Your Home” and the
- “How Did This Extra Lien Get On My Home”.
In this article we’ll cover the first one…
Federal Reserve Board Governor, Elizabeth Duke, tackled this in a recent speech according to Housing Wire. She detailed a disturbing trend: Banks abandoning properties in severely troubled markets even before completing the foreclosure process, leaving the cities stuck with “toxic titles” and trashed vacant homes. “In the most devastated neighborhoods, some lenders do not even complete the foreclosure process or record the outcome of foreclosure sales because the cost of foreclosing exceeds the value of the property,” Duke said. These “toxic titles,” she added, have placed a large number of properties in legal limbo.
This is made even worse by the fact that the homeowners facing the foreclosure has moved out while the bank continues to seek payment indefinitely since they never took possession of the home, which in theory should offset some of the outstanding balance. Tack on the HOA bills plus delinquent taxes and the bill keeps climbing. This makes a bad situation worse for both the homeowner and local community.
As Neil Garfield mentions, “The reason banks can walk away is that they don’t really own it anyway, even if they received a certificate of title from a foreclosure sale. These banks are merely picking the low hanging fruit and taking property where they can get away with it.”
Next up “Mystery Liens”
- The Bank Slayer
