New Yorkers facing foreclosure just got an extra bit of breathing room, thanks to Attorney General Andrew Cuomo (who also just happens to be running for governor).
Amidst the robo-signing controversy and the announcement by Bank of America, GMAC, JPMorgan Chase and others that they will now delay foreclosures in all 50 states (up from the previously announced 23 states), Cuomo is asking the mortgage servicers:
“[T]o submit documents and information to his office on how foreclosure documents are prepared, verified, attested to and notarized, and how required notices are provided in the state.”
What does this mean for New York homeowners facing foreclosure? In the short run, it means breathing room. In the long run, it’s not clear. Once an issue like this gets into the public spotlight, it takes on political significance, particularly in an election year, and it often takes on a life of its own.
You may hear a lot of commentary about how the delays will only slow down the recovery which will hurt all of us. But I think that may be a misleading statement. The banks and mortgage servicers have been remarkably short-sighted. To recklessly deal with mortgages in this way and not think it could blow up in their face is just poor management and poor risk evaluation.
It’s the same approach to the mortgage business that got us into this mess in the first place. And the lack of any substantive change in the system or the players is what led to the current “robo-signing” problem. (Not to mention other problems we may not yet have heard about.)
Also, while many people safely in their homes may fret about a slower recovery, for a New Yorker facing foreclosure, it’s hard to not appreciate a little extra breathing room. And even if it does inure to Cuomo’s own political benefit, if you get to stay in your home then you probably are not so worried about which politician gains some marginal benefit from the issue.
If you’re dealing with New York foreclosure issues and have questions about how the current foreclosure fiasco might affect you, please feel free to contact me for a free initial consultation.
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