The foreclosure crisis is running deep. All those residing in Southern Oregon are well aware of this. Here, the landscape has drastically altered and there is not one resident who is not directly or indirectly affected by the crisis.
This is the fifth year that the foreclosure crisis is running and the problems related to it are persisting and have not changed. The troubled home owners are finding it difficult to contact lenders and talk with them while letting it drag on for months if not years without any tangible results.
One of the victims is Beth Pederson, a resident of Klamath Falls. She has always been careful with her finances and cannot understand how she landed up in this mess. The threat of losing her house is looming large.
The most common stories are about borrowers overreaching themselves and buying houses well beyond their means. But neither Beth nor her home falls into that category. She had made a handsome down payment that was one-third of the price of the house. This left her with mortgage dues adding up to $70,000.
But because she missed out on one payment on the recommendation of her lender, she now owes to the bank (Bank of America) $137,000. There are many in the same boat. They have gone underwater with the worth of their property being less than what they owe. Beth has lost her equity for many years but thinks she is lucky to be still in her home. The entire system has betrayed thousands of others like Beth.
How did this happen? The mortgage services are generally one arm of the mega banks. They are not the owners of the banks that they service. The loans were bought by investors even before the ink was dry on the contract. The mortgage services were engaged to be the middlemen. It often makes financial sense to avoid foreclosure for those who invest as many recent studies have shown but for mortgage services it is otherwise; they gain by dragging on with foreclosure. Hence they avoid completing modification of loans on some plea or the others.
This has been prolonging the crisis in Oregon. Moreover, to make matters worse according to Oregon law, the services can keep on postponing foreclosures multiple times. They are not expected to complete modification talks prior to foreclosing. They are not mandated to even inform the homeowner of the new dates. This is at the root of the worsening of the crisis in Oregon. The foreclosure takes place without any monitoring by a neutral third eye and there are no conditions for mediation.
Oregon urgently requires protections that are put in place in other states of the USA.
Photo By umjanedoan