The foreclosure process is notorious for taking time, especially over the last 12 to 18 months, but for some states using a non-judicial process, the cause of delays may be different than a judicial foreclosure but still take up some time.
At the Mortgage Bankers Association’s National Mortgage Servicing conference in Grapevine, Texas, a panel of foreclosure experts sat down to break down the reasons for the delays often experienced with non-judicial foreclosures.
Caren Jacobs Castle, partner at Castle Law Group, started the session by discussing the federal, state and local regulations that affect the servicer’s ability to proceed. Castle advised the room of servicers that, in order to avoid regulatory delays, it’s crucial to keep their ducks in a row and be prepared with all paperwork prior to the foreclosure process.
“The more information servicers can provide attorneys at the beginning of the foreclosure will help minimize delays,” Castle advised.
“Sometimes I just want to say ‘can we just stop with all the new law?’” quipped Lance Olsen, managing partner at Routh, Crabtree & Olsen.
Legislative issues are also a key factor in non-judicial foreclosure delays. It’s crucial that servicers prepare themselves for pre-foreclosure mandated notice requirements (state specific), state mandated pre-foreclosure contact requirements and state mandated mediation requirements. State laws are also mandating cessation of efforts or time to appeal, which could cause issues in the process as well.
Process delays also include issues dealing with the poor documentation of affidavits, assignments and Due Diligence requirements.
The panel closed with a reminder that another huge player in the non-judicial foreclosure process continues to be the Consumer Federal Protection Bureau. “The CFPB will be the new reality for the next decade,” added Susan DeMars Milazzo, executive director at the California Mortgage Bankers Association, in an indication of potentially longer delays as more regulations come into force.