While Wall Street might be recovering it is clear that Main Street is not. That is not an unusual disconnect, but it does represent a reason for a spike in bankruptcy filings.
According to CNN and other sources, despite government and lender efforts to halt foreclosures, in the third quarter of this year 937,840 homes received a foreclosure letter, whether a default notice, auction notice or bank repossession notice. This according to RealtyTrac. This means that 1 in every 136 homes in the United States were in foreclosure during the 3rd quarter. This is a 5% increase from the second quarter, and a 23% jump over the third quarter of 2008. The numbers are down slightly for September, but not by much.
These statistics are disturbing for a number of reasons, not the least of which the stats demonstrate that foreclosures are rampant, and there does not seem to be any end in sight.
As what happens with most bulk operations, this is resulting in less oversight by mortgage servicing companies that tends to follow debtors into bankruptcy. As a result, the automatic stay is violated in aggressive, and sometimes unusual, ways, as the mortgage companies work at recovering not only properties but in recouping their losses.The bottom line is that this plow-through philosophy in regard to mortgage loans in default, and the systematic drive to recover losses by the mortgage servicing companies, results in bad bankruptcy practices.
Although I agree that Servicers need more oversight and that their "crappy" practice routinely follow debtors into chapter 13. I absolutely disagree that Servicers are saddled with "losses" per se'. Just like in roulette (just got back from Vegas) they have multiple ways to win.
Posted by: Patches | October 20, 2009 at 11:53 AM
That they have multiple ways to win is so true indeed. However they really do follow so many into into chapter 13.
Posted by: Don Endriss | March 30, 2011 at 02:03 PM