Over the past month we noticed that Bank of America has been resuming foreclosures on loans originated by Countrywide. As you may recall in October BofA voluntarily imposed a foreclosure moratorium following the robo-signing scandal. We actually expected an increase in activity as lenders began to catch up after these delays and were instead surprised to see foreclosure activity drop in April.
Even more surprising is just how old some of the foreclosures being resumed are.
In Contra Costa alone there are 123 homes now scheduled for trustee sale, with loans originated by Countrywide, where the foreclosure process began in 2008. That is 3 years of missed payments, interest and fees. In just this one county that totals $71.5 Million in original loans with balances now nearly $19 Million higher.
Although all of these 123 properties have active sale dates many are still being postponed. In fact the largest loan, where the total debt now exceeds the original loan amount by more than 1 Million dollars, has been postponing since January, and was just postponed again until June.
We remain as convinced as ever that these delays are simply part of the current game of Foreclosure Roulette. Hopefully someday soon lenders stop playing games and begin really dealing with the looming shadow of delinquent and underwater borrowers. Whether through loan modifications, short sales, or even foreclosure it’s time to move forward.