Our Ontario foreclosure defense lawyers were interested to see an editorial in the Wall Street Journal promoting an idea that we've heard before: guaranteeing foreclosed homeowners the right to rent their homes for a few years after a foreclosure. Economist Dean Baker promoted the idea in an April 11 commentary for the Wall Street Journal. Baker says he proposed the idea in 2007, but took the opportunity to promote it again in the editorial tied to the health of the housing market. He writes that allowing people to stay in their homes after foreclosure would benefit the homeowners/renters, the banks and the overall housing market by encouraging stability and possibly incentivizing lenders to be more serious about loan workouts.
Baker suggests that state foreclosure laws could simply be changed to give foreclosed borrowers the legal right to stay on as renters after foreclosure. The rent would be set at market rate by independent appraisals, and they would be treated like any other renter. For a set period of time, they would be guaranteed the right to stay in the home even if it is sold. This would provide security and continuity for the borrowers, he says. For the banks, it would create responsible stewards and discourage the vandalism and lack of upkeep that drives down foreclosures' values. He also believes this could give banks a stronger reason to negotiate loan modifications seriously. And, he notes, it could be implemented without more government funding or bureaucratic structure.
As Gardena foreclosure defense attorneys, we do see some merit to this plan. However, we believe Baker is ignoring the much bigger problem of why we have so many foreclosures in the first place. We strongly disagree with him that HAMP has failed because it's bureaucratic. In our experience, HAMP hasn't worked because it contains no provisions to ensure that lenders follow the rules or treat borrowers fairly. Indeed, lenders have been openly flouting the rules, denying loan workouts for no good reason and inventing thinly disguised reasons to delay action until the borrower is broke. Before advocating a new system that banks are sure to resist, we think it's better to at least try to fix problems with the existing system.
Howard Law PC dedicates its practice to addressing those problems for homeowners across California. We represent borrowers who are fighting foreclosures they believe they could avoid if their loan servicers were willing to seriously consider a loan modification. Our Aliso Viejo foreclosure defense lawyers frequently hear from borrowers who have been denied a HAMP modification for no reason or no true reason, or who have been denied a chance to make trial modifications permanent even though they meet all qualifications. We believe this is a form of predatory lending, and we fight back by suing the lender in a court of law to get fair consideration. We also represent people who have been foreclosed without any chance to discuss alternatives with their lenders, as is required under California state law.
Howard Law offers free, confidential case evaluations, so you never have to worry about future obligations or price if you speak to us about your case and your rights. To learn more or set up a meeting, send us a message through our website or call 1-800-872-5925 today.