It's time for lenders to step up and solve this problem. Yesterday's headlines stated foreclosures up 121%. Two more banks have been taken over by the FDIC. And still lenders take the hard line on delinquent borrowers as evidenced in the increasing foreclosure rate. No individual with outstanding debts owed to them would reasonably continue to take such a hard line stance. It's time to quit focusing on the "pay or else" and begin to focus on the "how can we help you stay in your home". Keeping people in the home with continued payments is a far better option than taking a huge loss on a property. The fear I have in the back of my mind is that, when all the foreclosures are done in the next several years, the banks will then go after the former borrowers for the losses causing another crisis as all those who have gone through foreclosure will then file bankruptcy which will decimate further their credit, but more importantly, spin of to wipe out all the other debts they've continued to make payments on leaving those creditors holding the bag.
The cycle can be ended immediately if the lenders will begin to expend the energies wasted on the foreclosure process toward retention of home owners. They could also shorten the process by putting some effort into the sale of REO properties and short sales. ActiveRain is filled with blogs and comments of the frustration of trying to sell properties where the lenders are involved with untimely delays, voluminous addendum for purchase contracts, and last minute cutting of Realtor fees to name a few. I personally know of a cash purchase which the lender dragged out over 6 weeks to close when the buyer had the ready cash in hand. It appears to me like the lenders are pushing for a bailout by sabotaging all efforts made to resolve the problem.
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