CNN Money Article: Most ruthless foreclosure states
CNN Money has an article listing both the most ruthless foreclosure states and the slowest.
In Alabama, late-paying homeowners can lose their properties to foreclosure at breathtaking speed - as little as 30 days after a delinquency notice is published.
In New York State, the process can drag on for well more than a year.
With foreclosures spiking around the nation, homeowners should learn the foreclosure laws in their states - what you don’t know can hurt you.
30 days seems fast, but usually the borrower is already 30 or more days late before the delinquency notice, so its really more like 60+ days. And it makes me wonder why banks lend in NY at all.
The article is mostly fluff, but this part was interesting:
One more wrinkle for home owners to note is that simply because they’ve lost their properties to foreclosure, it does not always mean they’re completely off the hook for their debts. If the auction sale brings less than the amount owed to the lender, it may still go after the borrower for the balance.
That’s called a “deficiency judgment,” and it’s a right that lenders do not enjoy in every state. As a practical matter, deficiency judgments rarely occur, but Jacobson knew of at least one case where it was invoked.
A couple owned a home that was totally destroyed in an earthquake. Its value to the lender fell to near zero and the owners had no insurance. The lender asked for a deficiency judgment - and won.
I suspect that the couple had a clause in their mortgage requiring them to keep insurance with the mortgage hold as one of the beneficiaries. Every mortgage I’ve ever seen requires this, because how else can the bank get their money back if the house burns (or falls down in an earthquake)? In this case the couple had probably broken the terms of the agreement and deserved the judgement against them.