Throw the Lenders to the Courts

Over the past several years there have been attempts to let judges take over lender issues, such as those related to foreclosures and bankruptcy. Some states, like California and New York, have allowed judges to intervene in ruling on improper foreclosures, or in cases where lenders assign mortgages for which they have no documented proof of ownership. There is much controversy in allowing the courts to step in and help fix some of these housing-related issues, but I think it is high time we do so.

The courts, although not known for being expeditious in many instances, could revolutionize the housing crisis by appointing judges to focus specifically on these cases. Not only would it protect future homeowners from wrongful foreclosures, but it would send a message to lenders to be more thorough in their processes, and likely lead to more and quicker loan modifications and short sale blessings.

Call me simple, or maybe blame it on my law school education, but I don’t understand why so many problems take so long to remedy, when all it does is create more problems and batter our economy even further. There ARE solutions to problems, but it seems we don’t tend to implement them. Politicians talk about solutions until they are blue in the face, but why not just put one in place and see what happens. Things can’t possibly get any worse. If it doesn’t work, we’ll try something else – but we can’t sit around doing NOTHING!

So I say let the judges look at pre-foreclosure filings. Make the lenders prove ownership. Jumping through these hoops a few times will likely be a hassle, hopefully causing lenders to think twice about NOT looking at loan modifications or short sales as options for distressed sellers. The burden on the legal system and the expense associated with it would likely be temporary, and surely not as great as the current strain on housing and the costs of foreclosure.

What do you think?