Will people game the new foreclosure rules?

Undoubtedly. The new law prohibiting a foreclosure to go forward after an offer on a short sale has been accepted will be gamed to some degree.

I don’t think it will be a big problem, the lenders are pretty good at processing short sales these days. The seller takes a somewhat smaller hit to their credit with a short sale, they may be able to stay in the home a month or so longer, and that’s about it.

It will be a bit more costly for the lenders when short sellers wait until a week or two before the scheduled action to list their homes, but they will still do better than if the home had become an REO.

I don’t have any sympathy at all for the lenders, I do have some sympathy for humans in dire financial circumstances. And make no mistake about it, the vast majority of people facing foreclosure are in bad shape. There are probably the equivalent to “Welfare Queens” driving new Cadillacs , I haven’t encountered them. And no one I know in the business has. Sigh.  A few Bankers sentenced to 25 to life might make me less sympathetic to ordinary people having rough times, but I doubt it.

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I am a Broker Associate with Creative Property services (CPS) in Sebastopol Ca. My father was an Appraiser and expert witness based in Oakland Ca for many years and I grew up having the basics drilled into me. I enjoy what I do and I am good at it. I managed income property in Oakland for a number of years and was licensed to run a collection agency for more than a decade. I have also worked as a credit manager and as the senior collector at the test center of a Bank . I have been commenting for years at "Calculated Risk" and on other Real estate Blogs including the defunct "Sonoma Housing Bubble" Blog. The best job title I ever had was "Chief Garbler". My Email Address is "StoneForHomes@Gmail.com" and my cell # is (707) 364-2477, please don't call before 7 AM or after 8 PM unless we have a deal in progress.

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One thought on “Will people game the new foreclosure rules?

  1. mikewilliamsenmikewilliamsen

    I really don’t see much difference in the new foreclosures rules. The banks ignored the last round, I expect they ignore these as well.

    Big question Tom: I believe the “new law” states they must halt the trustee sale if the short sale is “approved” by the lenders, not just the acceptance of a short sale offer by owners. I’d love to be wrong on this one, so don’t be shy about challenging my statement.

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