Uncontested Foreclosures Resume in New Jersey

David Voreacos and David McLaughlin from Bloomberg recently reported on a development that we all knew was coming.  Chase, Wells Fargo, Citigroup, and Bank of America were given permission by Superior Court Judge Mary Jacobson (in Trenton, NJ) to resume “uncontested” foreclosures.

All of these lenders, as well as Ally Financial and OneWest Bank, were ordered to review and improve their foreclosure processes by the New Jersey Supreme Court back in December.  As you might expect, this was due to the lenders’ roles in the robo-signing debacle that rocked the mortgage industry in 2010.  According to the Bloomberg report, the banks were to be monitored by a “special master” (whatever that is) – retired judge Richard Williams.

The article points to two main points that seemed to satisfy the court that the lenders had satisfactorily improved their foreclosure processes:

  1. Documents filed by lenders were done so by persons actually authorized to act on the lenders’ behalf
  2. Foreclosure paperwork was personally reviewed by real live humans

Wells Fargo spokeswoman Theresa Schrettenbrunner said that resuming foreclosures would help communities in situations when the lender couldn’t help homeowners stay in their homes, by preventing vandalized and neglected properties.  Schrettenbrunner said in an email,

“Now that the New Jersey court has validated Wells Fargo’s foreclosure processes, we will resume these practices for the benefit of New Jersey’s communities.”

I agree that sometimes foreclosures are necessary, and that some level of foreclosures in the market will be helpful in the real estate industry recovery.  But it continues to amaze me that these lenders don’t pursue short sales with the same enthusiasm that they do foreclosures.  Maybe it will take more “contested” foreclosures, to force banks to negotiate short sales instead of fight for foreclosures!

 

 

 

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