Should Foreclosure Laws Separate Vacant Properties?

Foreclosure laws currently don’t differentiate between vacant and occupied properties, meaning that lenders cannot simply foreclose on a vacant property but must follow the laws that are designed to protect homes that are still inhabited. This increases the REO costs for the lender, which in turn has a negative effect on housing recovery. In addition, existing foreclosure laws do not allow those in the lending industry who want to address blighted properties to move more quickly to address these homes.

A longer foreclosure process is not helpful if the house is empty. Lenders, servicers and REO managers are now working together to try and change the legislation related to vacant foreclosed homes at both federal and state levels. This article outlines the idea of creating different foreclosure laws for vacant and inhabited homes.

SOURCE: Mortgage Servicing News, 7/5/11

URL: http://www.mortgageservicingnews.com/msn_features/-1025517-1.html