This comes from the son of an Appellate Court Judge so I tend to be defensive of the judges...However, this seems wrong!!!
A judge in South Carolina has placed all foreclosures in that state on hold as of this week so homeowners could "mitigate their losses and perhaps modify their loans". Do you know who this really helps? JUDGES - all it does is reduce their case load. But it's their JOB to review these cases individually rather than to make blanket decisions, and this judge is simply lazy and derelict in her duty. This damages the real estate market by forcing lenders to have bad loans on their books for longer periods of time and thus makes new mortgage money less available for new buyers. Like many judges, this one is acting as if she is all powerful and has the authority to make law rather than merely interpret and apply it.
Certainly, spomehting must be done about the foreclosure crisis and crowded court dockets, but is this the solution?? For example, New York, New Jersey and Connecticut have mandatory foreclosure mediation programs. Mediation is typically non-binding, so many believe that they do not have any strength, but this is not true!! In some instances, the foreclosure is dismissed if the lender does not offer and participate in mediation. Mediation delays the foreclosure for may months. That is one bonus as it may allow time for a short sale etc. Another benefit is that when you get lender representatives, court personnel and the distressed home owner together, only good things can happen as there is a human element to all of this. Mediation certainly cannot hurt and it can never plce the home owner in a worse position, so why not at least try it?? Too frequently, I have had clients state that they do not want to particiapte...this is not advisable.
If mediation works only 10% of the time (an arbitrary mumber - I do not know the actual statistics) then given teh scope of this huge problem...isn't it a valuable tool??
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