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0 pointsquietsegfault2mo ago0 comments

Mortgage foreclosure is a legal process that takes a very long time and is very expensive.

0 comments

It doesn't take years, and it's less expensive than writing off the mortgage.

In judicial foreclosure states, the process can take 12 to 24 months, and longer if contested or if other periods apply. In nonjudicial states, timelines are shorter but still typically 4 to 9 months from default to sale.

Lenders incur legal fees, court costs, property taxes, insurance, maintenance, HOA dues, servicing advances, and loss of interest during the process. Industry estimates often put foreclosure costs in the tens of thousands of dollars per loan, excluding the loss from selling the property below the outstanding balance.

“Writing off the mortgage” is not the realistic alternative. Lenders generally compare foreclosure against loan modification, repayment plans, short sales, or deeds-in-lieu, because charge-offs are accounting outcomes after losses are realized, not an operational substitute for foreclosure.

groby_b2mo ago

Banks are perfectly well equipped to foreclose on you. Ask anybody who was around in 2008.

You don't usually skate by on years of non-payments, so I'd sticker the original claim with [citation needed]

Amezarak2mo ago

Don't know if this is what the OP is referring to, but: https://archive.is/2EObp

sounds like a very similar thing.

Here's another one on perpetual forbearances: https://www.wsj.com/opinion/covid-housing-relief-forever-rec...

This would seem to indicate that Covid forbearances are extending into 2026: https://www.hud.gov/sites/dfiles/SFH/documents/SFH_FHA_INFO_...

linuxftw2mo ago

Yeah, those are some of the programs I was referring to. The 'loophole' aspect that was mentioned on the podcast is that when the FHA does the 'loss mitigation' (aka, refi's the loan), there is not any kind of qualification as to whether the buyer will ever be able to make a payment on the new loan. It's just approved anyway, and the cycle can happen unlimited times.

I think they're looking at adding a means test, but I'm unsure.

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