State By State Foreclosure Info Released
OAKLAND, CA - With the foreclosure crisis in the headlines for over two years now, it is easy to assume that it must be nearing the end. Unfortunately, this crisis is far from over. To date, 2.5 million homeowners have already lost their homes and another 5.7 million are at imminent risk of foreclosure. Looking ahead, independent analysts have projected that between 10 and 13 million foreclosures will have occurred by the time the crisis abates. The reality is that many of these foreclosures can and should be avoided. All too often, troubled mortgages are sent to foreclosure, driven by a system biased in favor of foreclosure sales over sustainable loan modifications, even when foreclosure is more costly. While states have been hit hard by the current crisis as foreclosures drain resources from already-strapped budgets, states are in a strong position to stabilize local housing markets. By exercising their exclusive control over foreclosure laws, states can adapt an existing industry standard, “mandatory loss mitigation,” to require that servicers assess whether foreclosure is in the financial interest of the investor before proceeding to foreclosure. Although mandatory loss mitigation standards exist in many parts of the market now, lack of enforcement has diminished their impact. When inserted directly into state foreclosure laws, a mandatory loss mitigation standard will function as a low-cost, high-impact foreclosure prevention tool that ensures foreclosure is a last resort. This report highlights the unique opportunity for states to level the playing field by imposing common sense standards on all foreclosing parties.
The Center for Responsible Lending is a nonprofit, nonpartisan research and policy organization dedicated to protecting homeownership and family wealth by working to eliminate abusive financial practices. CRL is affiliated with Self-Help, one of the nation's largest community development financial institutions.About the Center for Responsible Lending
