Tuesday, November 18, 2014
Robosigning and deficiency judgments on foreclosed homes, and debt collectors
The New York Times has a major story Nov. 15 by Gretchen Morgenson, concerning deficiency judgments for foreclosed homes. In most states, borrowers can be pursued for them, particularly Texas and Florida, but not California. The link is here.
Fannie Mae has hired debt collection firms to go after borrowers when foreclosure papers had been signed by a “robo-signer redux” process. That means that proper documentation for the foreclosures may be lacking.
Way back in 1992, James A Wiedemer had explained the dangers of deficiency judgement in his Michigan-published “A Homeowner’s Guide to Foreclosure.” This used to be a danger even with unqualified assumptions (or “simple assumption”), which the FHA put a stop to on its approved loans around 1994.