December 2010 | Dave Corsi, MREIA's Legislative Awareness Chair
With the elections are behind us 2011 looms around the corner. For investors, 2010 has been anything but boring.
“Robo signings” has entered the American lexicon. Lenders were sent scurrying to locate the original promissory notes on properties they are looking to foreclose.
The American public awoke to the growing realization that Fannie, Freddie, the Fed and the Treasury have absolutely no idea what they are doing.
Foreclosures in the United States are projected to total 2.8 million for 2010
The government promoted loan modification regulations designed to save over 2,000,000 homes from foreclosure. Like most government plans, this program fell far short of projections.
Looking ahead to 2011? Regarding foreclosures and default filings, 2011 looks to be more of the same in the two million plus range.
In New Jersey, according to leading foreclosure attorneys, the timeframe for completing a foreclosure is approaching two years. That means two years of receiving no payments on a Note and Mortgage.
The Obama Administration’s policies have kept a lid on banks taking back properties via judicial foreclosures. Recently they encouraged banks to ramp up foreclosing on non-performing loans. Once the “robo signing” scandal erupted, Obama urged banks to slow down. Nevertheless, banks will have no choice but to restart the foreclosures in early 2011.
Coupled with the next big wave of sub prime loan resets due in mid 2011 we are faced with a problem that won’t be going anywhere anytime soon. Unfortunately, the same cast of characters who played a large part in creating this mess (the government) will look to “solve” the problem with new laws and regulations. This will most likely only make matters worse.
Be prepared for calls from “economically challenged leaders” for more government intervention.
In New Jersey Bill A359, “The Foreclosure Rescue Fraud Act” passed the state Legislature and is headed for the Senate (Senate Bill S1651). Provisions include the “ 82% rule” and coupling real estate investors with foreclosure consultants, two main reasons that MREIA along with the NJ Association of Real Estate Professionals, strongly opposes this legislation.
To read A359 / S1651 please go to: http://www.njleg.state.nj.us/ and in the “Bill Search” section (upper right hand side) input either A359 or S1651.
Reading the bill is only half the battle. Contact your State Senators and let them know your views on this and other legislation.
Best wishes for a Merry Christmas, Happy Hanukah, and a healthy and safe New Year.
About the Author
Dave is a Past President of MREIA, the current Legislative Awareness Chairperson and has made presentations at MREIA meetings and the Learning Annex.