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Adven⁠t⁠ures ⁠i⁠n Foreclosure Law

By: The James Madison Institute / September 13, 2011

The James Madison Institute

Blog

September 13, 2011

By Andrea Castillo, JMI Intern & Florida State University Senior in Economics 
This summer, for the third year in a row, I spent my days working at a law firm acquainting myself with the finer details of mortgage foreclosure law. Despite my humble status as a data entry assistant, my time spent poring over case files has helped me to become familiar with the basic sequence of events in a run-of-the-mill foreclosure action.When I first started working at the law firm in the summer of 2009, the foreclosure proceedings seemed to be relatively straightforward: the attorney would file a complaint against the delinquent borrowers, summonses of service to all related parties would be issued, a judge would sign off on a motion to issue a judgment against the borrower, and a sale of the property would close the file. Every step seemed to have a purpose and the ratio of filings to closings remained constant and manageable.As my time with the firm has progressed, so too has the complexity of necessary court filings in an average foreclosure action. Following the political fallout of the 2008 housing bust, politicians ignorant of foreclosure law and the intricacies of the housing market rushed to pass quick legislation, such as the Homeowner Affordability & Stability Plan, that they thought would patch up the problem. Instead, these last second legislative actions seem to have only made matters worse.Now, in the summer of 2011, foreclosure proceedings are laden with a glut of excess requirements that only serve to stall the process. Lenders, mortgage servicers, attorneys, and even borrowers are all faced with higher court costs and longer judicial proceedings as a result of this foolhardy legislation.It is clear that these programs that were supposed to help distressed borrowers and alleviate problems in the housing market are doing neither at a very high cost. The question is: when will our politicians start to notice?