Thank You Deontos: This is the elephant in the living room. Once addressed it will be the largest title problem the country has ever seen. There is no continuity in the chain of title. There can’t be any such continuity.
The phrase “toxic title” is a good one. Use it even in your correspondence.
The reason Banks can walk away is that they don’t really own it anyway, even if they received a certificate of title from a foreclosure sale. These banks are merely picking the low hanging fruit and taking property where they can get away with it. This situation is fraught with city and state actions against the financial institutions for abandoning their responsibilities as owners. Lack of maintenance and failure to pay taxes are easily explained by the fact that the “Bank” never advanced one penny for the loan. They have no intention of going from zero investment to an investment of tens of thousands of dollars per house.
The Fed Is (Finally) Talking About Toxic Titles
By Mary Kane 12/10/09 9:04 AM
It looks like the problem of banks walking away from distressed properties is finally getting some serious attention. Federal Reserve Board Governor Elizabeth Duke tackled the subject in a recent speech, Housing Wire reports. She detailed a disturbing trend TWI has been following since January 2008: Banks abandoning properties in severely troubled markets even before completing the foreclosure process, leaving the cities stuck with “toxic titles” and trashed vacant homes.
“In the most devastated neighborhoods, some lenders do not even complete the foreclosure process or record the outcome of foreclosure sales because the cost of foreclosing exceeds the value of the property,” Duke said.
These “toxic titles,” she added, have placed a large number of properties in legal limbo.
Complete article:
http://washingtonindependent.com/70383/the-fed-is-finally-talking-about-toxic-titles
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