Court Steps In To Forestall Foreclosures

Posted on June 24, 2008
Filed Under Foreclosure Homes |

In a unique way a Philadelphia court stepped in to forestall foreclosure. When lenders started foreclosure proceedings against Aaron Brokenbough there was nothing he could do except silently await the Sheriff’s sale. This was the end of the road for all foreclosure victims. The lender would gobble up the house that was their home. But all that became history when the court passed an unusual order. It stated that the sale cannot proceed without a last minute effort to bring about a settlement between the lender and the borrower. The matter did not end here. The court gave some teeth to Aaron’s stand by providing him with the services of a volunteer attorney as well as a housing counselor. Aaron sees a ray of sunshine peeing behind the clouds. He was overwhelmed. 36-year-old Aaron fell behind his payments when he lost his job and his wife fell ill incurring heavy expenses.

Philadelphia is one of the many growing cites like Los Angeles, Baltimore, New Jersey, Trenton and others that are taking the initiative themselves to tackle the foreclosure menace. More cities are on the warpath with the number of foreclosures crossing half million and 3 million falling behind in mortgage payments. While politicians rage and rant debating in Washington, many of the cities in the vortex of the crisis are taking matters into their own hands. The locality concerned is at the direct receiving end of the blight from foreclosures. Douglas Palmer, the Mayor of Trenton categorically stated, “We can’t wait on the federal government. We’re taking action.”

The cities are being forced to act at the gunpoint of foreclosures. Last November a Conference of Mayors observed that during the year the metropolitan regions had lost about $166 billion as a result of the fall out from foreclosures. Tax revenue collection fell, jobs were slow and consumer spending was at an all time low. Equity on houses sharply fell. The amount excluded the loss from crime, arson and other illegal activities that abandoned foreclosed units attracted. To try to make up part of the loss the cities have begun to sue the lenders. But it is no easy task to take them on, as these are federally regulated firms.

In January Cleveland sued 21 important banks for predatory lending. Baltimore took on Wells Fargo for the same reason. Wall Street has been blamed for this proliferation of greedy lending practices.