Large legal balance in non judicial states

[Gil Ganz]

Hey
I have been seeing something that seems weird to me, I see assets in tapes i get that are from a non judicial state, one that is also quite a quick foreclosure one, having a large legal balance on top of the UPB.
For example an asset in Texas worth 70k (CMV a little bit higher) with the total legal balance being 110k. How does that makes sense? Isn't the foreclosure process so quick in Texas that it should not reach such a large sum? (Both in absolute value and in compared to the house value)

[Andy Mirza]

Originally posted by @Gil Ganz:

Hey
I have been seeing something that seems weird to me, I see assets in tapes i get that are from a non judicial state, one that is also quite a quick foreclosure one, having a large legal balance on top of the UPB.
For example an asset in Texas worth 70k (CMV a little bit higher) with the total legal balance being 110k. How does that makes sense? Isn't the foreclosure process so quick in Texas that it should not reach such a large sum? (Both in absolute value and in compared to the house value)

Just because the note is in a quick to foreclose, non judicial state, doesn't mean that the lender is in a hurry to foreclose. The lender has to be active to make the timeline move quickly. A lot of banks and hedge funds are slow moving because of bureaucracy because of their size. They also tend to try to get the asset re-performing by doing a loan mod for the borrower. Once they've exhausted those attempts, they'll proceed with FC but interest and fees have racked up in the meant time.