Philadelphia Measures To Tackle Foreclosures

April 14th, 2008 | Tags: Foreclosures

Philadelphia has found a unique method to tackle the problem of increasing foreclosures. It will not impose a hold on foreclosures but take steps to slow down the legal steps. This will have the same effect of allowing time to the borrowers to get their bearings and find a solution so that they are not evicted from their houses. This came from the mouth of no less a person that the President Judge of Common Pleas Court - C. Darnell Jones II. He was aware of the legal constraints and limitations to the present one-month stay of the Sheriff. Keeping this in view the novel plan has been initiated regarding court supervision of properties that are owner occupied.

The non-residential properties will go through the normal foreclosure process that will end up with a court auction if no deal is in the meantime worked out between the banks and the borrowers. But suits dealing with residential units will run along a separate track that would allow the foreclosed householder to avail of free legal advice as well as counseling in this matter. An administrative order is scheduled to come into effect.

This novel plan was sketched out by the lenders, the housing advocates, the city fathers and related social service organizations. Since 2004 meetings have been held under the aegis of a steering committee set up by the court. On 27th March a resolution was passed seeking a hold. On that same date another announcement cancelled the April sales and sought longer stay.

The lenders had argued that the imposition of a moratorium on foreclosures would compel them to down shutters – which would not be beneficial to the economy as a whole. They welcomed the suggestion made by Jones. It would allow the banks to collect their legitimate valid dues and at the same time would not push foreclosed victims over the brink. In this way the borrowers were acknowledging their responsibilities and yet the problem of vacant properties would not be overwhelming the community. Time is given for negotiation without upsetting the apple cart.

Sheriff Green is combing through the details of each property that have been listed for April and May sales so as to locate the genuine residents. In one instance an investor bought 10 units, took equity and then slipped into foreclosures. The concern is not for these types of borrowers.