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NEW SURGE IN PHANTOM MORTGAGE FORECLOSURES?
A recent article in the Miami Herald notes the spike over the past 3 months in foreclosure filings in South Florida and other key states.  The article which derives much of its information from reports by Attom Data Solutions shows a more than 35% year over year increase in foreclosures.
The theory for the increases has to do with credit crunches resulting from various economic issues that are causing borrowers to be late with mortgage payments or even underwater (once again).
Our office however is seeing instead the surfacing of old mortgage defaults - defaults that go back as much as a decade - on mortgages that usually have been traded amongst investors.  We call these "Phantom Mortgages".  These investors may feel that the time is right to foreclose and bring the property to market.
So why the delay by the investors?
There can be several reasons for delaying a foreclosure.  Carrying costs is a primary one.  Lenders do not want to pay taxes, insurance, maintenance and association fees on a vacant home.  Delaying foreclosure may not save on real estate taxes or insurance, but maintenance and association fees not being paid for 6, 8 or 10 years is a huge savings.  In addition, the market value is ... more

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