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Why Is It So Easy For Banks To Go To Court & Foreclose On Property Loans In The USA?

A friend of mine is on the verge of losing his home for the sake of some $25,000 USD debt ( about five payments on his mortgage, he had a bad trading year last year, didnt everyone?) BankOne in Florida went to court and got a judge to award foreclosure in days, how come USA families can so easily lose their homes ? in the United Kingdom, this "house repossession" is an absolute "last resort", the U.K the courts do not allow families to lose homes so easily. I am disgusted at the situation there in the USA. The laws need to be changed, may pal and his wife/kids are worried sick and we are trying to help him! does anyone know a good lawyer whom specialises in Foreclosure ? Wait a minute! The answers here show lack of understanding of the situation, the man owes 5 payments, thats $5 grand a month, if he was so irresponsible and could not afford the mortgage, he would not have that house in the first place! after 5 missed payments his house is in foreclosure. The U.K Government does not allow the courts to do this so soon! So my question is when are last resort "repossession" measures activated in the USA ? after two or three months ? Thanks Real estate Guy, I am asking because I want to know the reasons, I am comparing the situation to what would happen in the U.K. The man is no "dead beat" either, lets not get personal about someone you dont really know okay ? Are all the thousands of people currently going through Foreclosure in the USA "irresponsible deadbeats whom dont know their dimes from their $5 dollar bills RG ? You are very offensive mate! Are the Sub-Prime, crashed & broke banks MANAGERS, All DEAD BEATS TOO ? You tell me, you seem to have all the "answers" efflandt- who is talking about "gambling" his repayments are $5,000 USD per month, when he took out the mortgage his income was over $100K a year. He has a bad year in 2007 and his income drops and he falls 5 months behind with the repayments and the bank goes to throw him out of his home, its all over the news, thousands of AMERICANS are going through it after the economic downturn started, lesson over,do you get it now ( economic downturn equals a drop/fall/shortfall in your income ) ? dont talk to me about gambling again!

Public Comments

1. Wow.... what ever happened to personal responsibility? If your friend hadn't invested money that should have been liquid.... he wouldn't have had this problem. He did not act responsibly. This is totally his fault. The laws in the US are also geared to "last resort" for home repossession. One of the most basic laws of investing is not to invest money you'd need in less than ten years. Help your friend grow up. Help him in need..... but don't let him think this is the banks fault. He'll screw himself again!
2. Part of what makes America's economy strong over the long haul is that we generally do not have laws geared toward bailing people out of their poor choices. Your friend is either in a house he can't afford or invested his money recklessly. Neither means he is a bad person but hopefully he learned a lesson. He may need to rent for a while in order to repair his credit and figure out what he needs to to differently next time.
3. it is an obligation to repay your debt - no matter if it's a house, a car, a washing machine. If you bought it and do not repay they come take it to get their money. People need to stop living outside of their guaranteed means of living (the "for sure" income, not the possible income from trading). The person is talking about gambling because you said bad trading year which implies he depends on investments as income... investments are gambles on the market instead of in casinos. A mortgage of $5,000 for anyone is just more than necessity. For those people I have little sympathy. That's not living in your means, that is wasteful in my opinion. I'm sure they could have survived just fine with a house 1/3 the price. To answer when it happens - after 30-days late it is in default. http://activerain.com/blogsview/459697/New-Maryland-Foreclosure-Process I don't know if this is just for Maryland or all states... After 90-days they move toward repo. They then wait 45 more days after the notice was sent out (135 days total). He could possibly get a loan or refinance to help the situation. Also, I think bankruptcy would prevent the bank from taking the house... but I'm not positive about that. http://www.ptla.org/foreclos.htm
4. that is why the USA is #1. The dead beat owes money. Period. And why are YOU asking these questions. Why isn't he? Why don't you loan him the money and then what would you do it he stopped paying you? If you think the problem is over when the bank gets the house, read on: http://www.washingtonpost.com/wp-dyn/content/article/2008/04/11/AR2008041101914.html
5. We may feel sorry for people who get in over their head. But if he gambled away money he needed to exist, it was his own fault, and he should not be rewarded for his gross error in judgement with government handouts. He should only invest money that he can afford to lose, or with a long enough time span that he can make up for it. It might be different if he lost his job or something. We already pay enough taxes for people on the goverment dole. Sure, I easily lost $25,000 in my retirement savings at the end of last year, but that was down from over $50,000 gain earlier in the year. But that is extra money with plenty of time to get through volitility before I need it in the distant future. PS: Here in the states you are in default of your loan if you are more than 1 month late. $5000/mo is way more home than I could afford. My loan payments, tax/insurance, and utilities add up to $1500/mo. So maybe he bought more home than he could afford.
6. Because many families buy houses that they really can't afford. He would have been better served to be investing most of the 5k per month to secure his future. A house payment like that is ridiculous. Simple rule, don't buy things you can't afford.
7. The law states that items that are purchased on installments (homes, cars, appliances, etc) remain the property of the lender until the very last payment has been paid. If I have a car loan that states 48 payments and I make 47 of them and never pay another penny, they can repossess my car even though I've paid almost all of the loan off. Five missed payments is considered a serious delinquency. One late payment can often be forgiven but when five payments are missed, the lender questions the ability of the borrower to make up the missed payments and keep the account current in the future. In an accounting aging schedule, anything over 120 days past due is considered a disaster. There are tables and statistics that show the liklihood of repayment when an account reaches a certain amount of time past due. The percentage of accounts that are brought up to date after becoming 5 months delinquent is tiny. Was your friend at least making partial payments during this time or did he not pay a penny towards his obligations? This is not be be rude but the lender gave your friend a mortgage according to terms that they both signed off on. Those terms spelled out very clearly the amounts of the payments, the due dates of the payments, and what would happen if the payments were not met. It is not the bank's fault that your friend had a bad trading year. For people who rely on commissions or salaries that can vary based on sales, it is so important to have a significant cash amount in the bank to cover any downturns or bad months. If I didn't pay my rent for 5 months, do you think my landlord would still let me live here? Heck, no! I would get a 30 day eviction notice as soon as the rent was 30 days late. Like they say, there is no free rent. The laws are fine. Our country was founded on the notion that you honor the documents you sign and you honor your obligations. A bad trading year does not negate your friend's obligations to make his house payments. The bank lent him the money in good faith and he has not lived up to the terms of the deal. It's that simple. It sucks to lose your house but it is not the bank's fault. If you can't make your payments, you don't get to keep whatever it is you bought.