how do you get the banks to speed up the foreclosures?

Question

hello to all. i have a question for all of you new york state investors. i live and invest in the buffalo, ny area. there are many, many properties that are in some stage of foreclosure here in the western new york area, but have not completed the foreclosure yet. in fact, i personally know of several that have been in foreclosure for over 5 years. anyone have any idea why this is???? other states foreclose in just a few months to a couple of years. there is a house on the next block over from me that has been in foreclosure since 2009 and it still has not been thru the total process so it can be bought. the bank is paying the taxes and mowing the lawn, but there has been no paperwork filed on this place since october of 2014. and this house is just one of many i know of. how do i get the bank to either sell them to me, or finish what they started and finally foreclose so it can be bought? any one have any ideas?

Steve Babiak · Answer

It takes long to foreclose in some areas for an assortment of reasons, and when the defaulted borrowers are aware of the methods they take advantage and will use them sequentially and in tandem. But there is little that you as an investor can do to speed things along.

Some of the reasons: state law requires a minimum waiting period of delinquency before the foreclosure can be filed; to file, state laws require certain consumer notices be sent to the delinquent borrower, and some time is allotted to that; sheriff sales might only be allowed in one day per month in some counties; court system can get backed up, so that a postponement in one month can mean that the next hearing date is months later, missing many possible sheriff sale dates; borrowers will use bankruptcy; borrowers will attempt loan modifications and there is now law that prohibits "dual tracking" (bank can't negotiate a loan mod and simultaneously pursue sheriff sale).  That's just some of what goes on ...

Chris Martin · Answer

Check public records to see what's going on. The owner could have filed bankruptcy, etc.

Mark Elliott · Answer

thank you to all for the comments. some of the answers i already knew. dealing with banks can be he rabbit hole described, yes, but it certainly sounds like the lawyers are the cause of the problem. here  in western new york, one of our lovely politicians has decided that he will start putting signs in the front yards of the " zombie" houses with the name of the bank on the sign just to embarrass them into doing something about it. a lot of good that will do. all he has done is increase the calls to the banks. it his his profession that has caused the problem with all of the red tape the banks must go thru just to foreclose on a dead beat that doesn't want to pay for the house he mortgaged. what really needs to be done by the politicians is to make things easier for the banks to take back what rightfully belongs to them instead of having to go thru hell to cater to someone who doesn't have the responsibility of a grapefruit. i just really hate to see these houses sit for years and years empty and fall a apart. by the time we investors actually get a chance to buy them and rehab them, the amount that the bank is able to get out of the poor rundown place is pennies on the dollar. thanks again to all the answers

Adam Johnson · Answer

A common misconception is that as soon as a home mortgage goes into default and becomes vacant that it is bank owned.  In NY, which is a lien state, the borrower owns the home technically even if they don't live there any more.  Ownership takes place after a very long and painful process which has become longer and more painful as a result of a strong attorney effort to make it that way.  Homeowners in default hire an attorney to fight it, the bank has to fight it, then they file bankruptcy and get a stay in place, you get the idea.  The bank can't do ANYTHING with regards to selling the property until they own it.  They also can't give you any information or communicate with you because the property is involved in a legal process and their are privacy laws in place that prevents discussion without the explicit consent of the borrower/defendant.

In addition to property management, we do property preservation work.  We are the guys you see mowing the lawns, putting band-aids on the roof, etc. while this process takes place.  You may have even seen one of my crews in your area and asked them questions.  We are bound by legal agreement and can only reply that we are there on behalf of the mortgage company to perform services at their direction.  We can't say the word "foreclosure" either.  We get approached almost daily by neighbors and investors trying to pump us for information.  It is frustrating for many, but trial lawyers have secured their careers by making sure that every "i" is dotted and "t" is crossed, then checked and double-checked.  It sucks, but that's just the way it is.  Ownership doesn't transfer until after the property has gone to the auction at the court house steps.  If that hasn't happened, the bank doesn't own it yet.

Ron S. · Answer

It's funny...we used to complain that foreclosures happenned too fast, and now we complain that they take too long.

Why would you think the Bank is going to do anything? They can't sell you a house they don't own, and can't talk to you about a house That's a waste of time and brain cells in my opinion, trying to talk to the bank.

Michael Noto · Answer

Your best bet to get foreclosures before they hit the market is to develop relationships with very small local banks or credit unions who are looking to unload foreclosures on notes that they hold.

Dealing with the bigger banks is one big rabbit hole that will lead nowhere.

Curt Davis · Answer

Sadly I dont think there is anything you can do. If you know who the bank so you can try to send them a letter or call but that is a very long shot.  If it a large bank you can basically forget about it.

how do you get the banks to speed up the foreclosures?

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