Judges Frowining At Haste In Foreclosure Legal Procedures

Posted in Foreclosure, January 11th, 2008 |

Judges at Maryland High Court hinted that would intervene to change the foreclosure notification procedure, as it seems to be unduly hasty in favour of the lender. This is against the background of the increasing foreclosure crisis. The argument is that since the circumstances have changed the rules of the mortgage industry need to be altered. This was the opinion of Judge Dale R. Cathell while listening to the arguments of a foreclosure case in Maryland Court of Appeals.

Joyce Griffin from Pasadena was the victim whose house had been foreclosed two years ago. The case was about the speed in which it was disposed. According to present laws a house can be sold about two weeks from the date of notification. In most states there is no provision for providing proof of receipt of the notice. Thus the law seems to be in favour of the lenders and seeing to it that they do not wait too long to realize their dues. But the recent crisis has thrown up another issue about who should be protected – the lender or the borrower. The situation and environment is totally different from what it was half a century ago. Some way has to be found to put the brakes on the speed of the foreclosure process.

As per Sate rules the notice is to be published in a daily newspaper and information to be sent via regular mail and certified mail at least 15 days before the sale date. There is no provision as to what the lender should do if the mail does not reach the borrower on time. Deepak Gupta the advocate strongly argued that proof of delivery is a must in such cases. Gupta was representing Joyce Griffin who claims that she first found out about the fate of her house when the new owner pasted a handwritten notice on her door. The plaintiffs initiating the foreclosure case said that the letters sent via certified mail had returned unclaimed; this happens in 9 out of 10 cases. House owners intentionally ignore the warnings. The firm has stacks of such letters in their offices.

The regulations of the State have come in for all round criticism from the public and officials. Foreclosures have become and epidemic. The legislature is expected to tackle the issue during this year’s session.