The New York Times has a story about the abuses of the foreclosure system that have become overly-apparent in the deluge of foreclosure activity that has followed the wave of subprime mortgage ARM-loan resets. This is a long article, but an important read for any of you that are personally facing foreclosure or have friends or family that are in the process.
The most important part of the article is the focus on the impact of “foreclosure mills” and the fees tacked on during the foreclosure process that are the responsibility of the borrower. If you are going through the process do not take what the lender or servicer says at face value. Get some help, step back from the process, and question anything that seems “off”.
From the New York Times “Foreclosure Machine”:
The reality is very different. Behind the scenes in these dramas, a small army of law firms and default servicing companies, who represent mortgage lenders, have been raking in mounting profits. These little-known firms assess legal fees and a host of other charges, calculate what the borrowers owe and draw up the documents required to remove them from their homes.
As the subprime mortgage crisis has spread, the volume of the business has soared, and firms that handle loan defaults have been the primary beneficiaries. Law firms, paid by the number of motions filed in foreclosure cases, have sometimes issued a flurry of claims without regard for the requirements of bankruptcy law, several judges say.
