Are foreclosures good for banks?

Representatives of banks and mortgage lenders will say over and over that they don’t want to foreclose on homes. They will say that it’s much cheaper and easier for them to keep paying homeowners in the home and that foreclosure is a last resort. If that’s true then why do stories like¬†Jennifer Ryan-Voltaire’s keep surfacing over and over and over again?

Jennifer is currently battling a foreclosure because her bank lost a single-tax document she sent them several times. During a hearing, the bank’s lawyers said that the only reason they foreclosed is because they were missing one document:

Voltaire tried calling Wells Fargo. She says she knew Wells Fargo had said it was missing a tax document again and had scheduled a foreclosure. But she says she faxed the document to the bank and a call center worker confirmed that Wells Fargo now had all the documents it needed and that it would call off the foreclosure sale.

Does buying a house really make you a property owner if one misplaced tax document puts you into foreclosure? Virginia’s foreclosure process is clearly broken. Unfortunately, our elected officials have only exacerbated this problem by making Virginia’s already fast foreclosure process even faster:

Last year, the state legislature overwhelmingly passed a law making it easier for lenders to defend themselves when accused of giving homeowners too little warning of impending foreclosures.

The process moves so quickly in Virginia – one of the fastest states in the nation – that homeowners can receive less than two weeks’ notice that their house is about to be sold on the courthouse steps.

Virginia needs to get serious about property rights. Families shouldn’t lose their homes because of administrative errors. We need to reform Virginia’s foreclosure process so that paying homeowners can stay in their homes.

Are foreclosures good for banks? Obviously not, and I don’t think banks relish kicking families out of their homes. But if the foreclosure process does not allow paying property owners to stay in their homes, then we need to change the process. Banks and mortgage lenders are struggling with the housing mess in their own way and i’m sure they can understand the need for reform.

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