by: Peter J. Gallagher (@pjsgallagher)
Tax sale foreclosures are rarely that interesting. This is purely my opinion, and I understand that buying tax sale certificates can be a lucrative trade, but I think I am probably not alone in saying that the field tends to be a bit dry. This is not always the case, however, and the best proof of this might be the recent decision in Lien Times, LLC v. Rader. (It is not what makes the case interesting, but Lien Times is a great name for an entity that buys tax liens.)
Lien Times started out with a fairly routine set of facts. Defendants fell behind on the taxes for their home, so the township issued a Certificate of Sale for unpaid municipal tax liens. Plaintiff purchased the Certificate of Sale. Plaintiff eventually foreclosed on the lien and the property was auctioned at a sheriff's sale . This is where it gets interesting.
Continue reading “If Courts Awarded Points For Creativity, These Defendants Might Have Received A Few!”
by: Peter J. Gallagher
Today, the Appellate Division provided another reminder that it is not “bad faith” for a lender to abide by the terms of its mortgage with a borrower. In Warner v. Sovereign Bank, borrowers fell behind on their residential mortgage and contacted their lender to request a modification. While their request was under review, the lender filed a foreclosure complaint. The lender eventually denied the borrower’s request for a modification, but the two sides entered into a forbearance agreement.
The borrowers claimed — without evidential support according to the Appellate Division — that the lender required, as a condition of its agreeing to review their request for a modification, that borrowers not list their home for sale. Therefore, after their loan modification request was denied, the borrowers sued the lender claiming, among other things, that the lender acted in bad faith by initially not allowing them to list their home for sale and for then not providing them with a timely answer about their request for a modification. The borrowers claimed that both of these actions prevented them from selling their home, which caused them to sustain a substantial loss of their equity.
Continue reading “It’s Not “Bad Faith” For Lenders To Stick To The Terms Of Their Agreements With Borrowers”
by: Peter J. Gallagher
The New York Times is reporting that the government is soliciting ideas for turning its glut of vacant, foreclosed houses into rental units that could be managed by private parties or sold in bulk ("U.S. Seeks Ideas On Renting Out Foreclosed Property"). The goal of the program would be to "stabilize neighborhoods where large supplies of empty, foreclosed properties have hurt property values" and "clear the nation’s balance sheet of real estate holdings that, because they have been difficult to sell individually, have hung over the housing market and stunted sales of existing homes and new construction." The request for ideas comes from the Federal Housing Finance Agency, the Department of Housing and Urban Development, and the Treasury Department, and you can click here to submit your ideas.
As the article notes, the percentage of homes owned by the government that are currently in foreclosure is somewhat staggering:
Of the 248,000 homes owned by Fannie Mae, Freddie Mac and the F.H.A. at the end of June, 70,000 were listed for sale, said Corinne Russell, a housing finance agency spokeswoman. The remainder were not yet on the market or the agencies had already received an offer from a prospective buyer.
But it is possible that hundreds of thousands of more homes that are now in the foreclosure process could come into the possession of the federal government in the next few years, housing experts say.
The government is now looking for a few good men ideas for how to deal with this crisis. Among those already proposed are "rent-to-own programs, in which previous homeowners or current renters could lease properties as a path to ownership, and ways in which the properties can be used to support affordable housing."
If you have any thoughts, be sure to let us know when you let the government know.