Many homeowners are being taken to court by their lenders long after their houses were taken in foreclosure. How? Lenders are filing new motions in old foreclosure lawsuits and hiring debt collectors to pursue leftover debt, plus court fees, attorneys’ fees and tens of thousands in interest that had been accruing for years.
1. If a property has a $400,000 mortgage and is only worth $230,000 following the housing crisis, what amount is the underwater amount?
2. According to the article, Freddie Mac is targeting “strategic defaulters.” Explain this term.
3. According to a recent government audit, what is the recovery rate of deficiency judgments?
4. What can be a potential down side for borrowers when a bank forgives a deficiency judgment?
Kelly, K. (2013). Lenders seek court actions against homeowners years after foreclosure. The Washington Post, June 15 (Retrievable online at http://www.washingtonpost.com/investigations/lenders-seek-court-actions-against-homeowners-years-after-foreclosure/2013/06/15/3c6a04ce-96fc-11e2-b68f-dc5c4b47e519_story.html?hpid=z2)