Friday, February 17, 2012
The report is only the latest in a series of incidents involving bad actors in the foreclosure crisis. Last year, I called for a moratorium on home foreclosures after Bank of America, JP Morgan Chase and Wells Fargo signed affidavits initiating foreclosure against borrowers without verifying the information they contained. In fact, problems have been so rampant that banks now require many buyers of foreclosed homes to sign contracts absolving the bank of liability should irregularities appear with the original foreclosure.
In light of these negligent practices, the $26 billion settlement last week between the U.S. Department of Justice, state attorneys general and the major banks raises as many questions as answers. For instance: If a house is illegally foreclosed upon and subsequently sold by the bank, who owns the home? The new buyer or the original owner? Untangling this mess might require new consumer protections, not just a payout from the banks accused of wrongdoing.
The best way to prevent foreclosure problems, however, has always been to prevent foreclosures in the first place. Offering families facing foreclosure the same bankruptcy protections enjoyed by business speculators is one place to start.
As it stands today, a single family that buys a home in a housing
development is treated differently in bankruptcy court than a
businessman who bought 10 units in the same project. If and when the
housing bubble bursts, the underwater speculator is able to seek
bankruptcy relief on all 10 units, while the owner of the single home is
left out in the cold. There is no good reason that homeowners should
face this discrimination in bankruptcy or be treated differently than
commercial interests. If it's good enough for business, it should be
good enough for homeowners. READ MORE
The article is incorrect. Homesteads are exempt from $25000 in Louisiana to value of home in Florida.
Note: For lots more from reliable sources on the impacts of the financial crisis on homeowners, click here.
------------------------------------------------------------------------------------The article is incorrect. Homesteads are exempt from $25000 in Louisiana to value of home in Florida.
Here is a not-up-to date listing of exemptions:
