Lenders Pursue Mortgage Payoffs Long After Homeowners Default - BusinessWeek
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While there are no statistics on the number of deficiency judgments approved by courts, the Federal Deposit Insurance Corp. tracks the amount banks collect after defaulted loans were written off.
These mortgage recoveries rose 48 percent to a record $1.01 billion in the first nine months of last year compared with the year-earlier period, according to the Washington-based regulator. Recoveries on defaulted home-equity loans almost doubled to $392 million, the FDIC data shows.
The figures don’t include money retrieved by trusts overseeing mortgage-backed securities, such as the one that holds the loan on King’s former home, or efforts by distressed- asset funds and companies that buy bad loans to profit from collection rights. Judgments such as the one levied against King usually tack on court fees, fines and interest.
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To those of you looking at doing a short sale on your property...be careful. Make sure you have an attorney look over the paperwork or that there is language in the bank letter specifically addressing them persuing you down the road. 5 years is a long time for your bank to get their act together and file.