Foreclosure1 Blog

There is a saying that troubles do not come alone – they come in numbers. If the foreclosure slap is not bad enough it is followed by foreclosure fees and then tax demands. The New York Times reports that as more and more house owners default on their loan repayment schedule it is being suspected in legal circles that the lending companies prodding foreclosures are actually taking advantage of the borrowers hapless condition by burdening them with questionable fees. A legal expert from the University of Iowa, Katherine Porter has been scrutinizing mortgages. She is of the opinion that more than half chapter 13 bankruptcy suits mentioned fees that should never have been charged. The point is that families undergoing foreclosure are in such a traumatized state that they cannot think clearly and have no resources left to fight back. If they had the ability to spar foreclosures in a long legal battle they would not have succumbed to it!

IRS has further worsened matters by imposing taxes on the loan amount that is forgiven in foreclosure. This amount is taken to be income. The policy is absolutely insane.

The forthcoming years are going to be gloomy. About 20% of the sub-prime loans taken in 2006 will in all probability slip into foreclosure. The least that can be done is to see that the victims are not further victimized by wolfish lenders and hypocritical Uncle Sam.

The sub-prime mortgage plans were launched with the ostensible purpose of helping those without the credentials of availing of prime loans to get one and have a house of their own. This is the great American dream. Unfortunately greedy lenders, irresponsible and unwary borrowers and an indifferent government allowed matters to drift to such a situation that the entire country is rocking and ripples are being felt on the international scene. Initially teaser rates and no down payments attracted many to take loans. Lenders vied with each other to dole out loans tempted by high commissions and investment possibilities. The mortgages were made into packets to distant investors. The reasoning was that property prices could never fall. But when millions failed to meet increased interest rates and foreclosures sprouted up like mushrooms the entire socio-economic fabric began to shake. The borrowers are going down but they are dragging down with them the lenders and the government.

via

Related Posts

• House Foreclosures: Bay Area Foreclosed Houses and Investors
• Renters Caught In The Foreclosure Net Needs Help
• Foreclosure Process Differs from State to State
• Atlanta Under Dark Foreclosure Clouds
• Mass Auctions Indicative Of Foreclosure Intensity
• The Short Sale Alternative To Foreclosures