Closing

I must admit to some sympathy with the sheriff who refused to enforce foreclosures:

When did you begin to think there was something wrong with the system?

I can’t emphasize enough how stunned people are. [Imagine] if you and your family are sitting in your house, watching TV on a Thursday night, and all of a sudden you hear a knock on the door. You go to answer it, thinking it’s a neighbor, and instead it’s me and six people in black suits and a battering ram telling you to get out of your house. It was that type of response I was getting at the door.

I got a bunch of stories. One in particular hit all the buttons. We went in, and standing in front of me is a young man, probably early 30s; he’s holding two 6-month-olds in his hands, in their diapers, both of them have colds; he’s got a 5-year-old, and an 11-year-old with his wife. And we’re there to throw him out.

He pulls out a lease he’d signed, which was all valid and notarized. The lease was entered into after the foreclosure had occurred—the case had gone through the courts, but this landlord was such a rotten person he kept renting the place out. If not for the steps we’d put in place, this guy was out in the street with these little kids.

This kind of thing was happening a lot?

I can give you a hundred anecdotes. Whereas these things used to pop up once in a blue moon, this was happening all the time. The number of places we went to where people had no idea; where the occupants were not the right people; where [the banks had] given us the wrong location—they sent us once to evict someone from a vacant lot, where the house had burned down two years before. It is numbers, situations and scenarios that we had never seen.

What do you do about people in this situation? It’s one thing to evict someone from their own home — the presumably know they are in default and have been getting court notices. But it’s horrible to hear about renter being tossed out onto the street like this.

One possible solution? Put in legal provisions that make it easier for the bank to take over renting the unit. As long as the renter pays their fees, they can either finish out the contract they signed, or have 90 days to move out.

Another? Make it easier for them to simply take over the mortgage. That was how Clarke Howard bought his first house. When he found out about the foreclosure, he called the lawyers and they made a deal for him to buy the house.

Either of those options works better — for the banks as well as for the occupants. I suspect it’s legal red tape and corporate short-sightedness that keeps it from happening.

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