Exercise In Futility
Bank Lawyer’s Blog:
When consumer advocates last year called for a 60-to-90 day nationwide moratorium on residential loan foreclosures, we thought that it was a dumb idea. Holden Lewis of Bankrate.com also questioned the utility of such a moratorium and asked an embarrassing question.
For
example, if a six-month halt to all foreclosures merely delayed a
consumer’s foreclosure for six months instead of preventing it, that
homeowner would rack up seven months of unpaid interest charges instead
of one month.
Who would be responsible for paying the extra amount: the servicer, the investors who own the loan, the borrower?
Our guess was "the lender."
A Massachusetts law that went into effect last month extends from 30 to 90 days the "right-to-cure period" before a lender on a 1-to-4 family mortgage loan can foreclose on a defaulting borrower. According to Housing Wire, the immediate effect of the law was to reduce the number of foreclosures,…