Few things in life are really fair.
But one of the most overlooked stories in the U.S. foreclosure crisis may be the strikingly large, and at times grossly unfair, disparities in how homeowners are treated depending on where they live.
- Some states handle foreclosures mainly though the courts. Others use a nonjudicial process. Still others allow both judicial and nonjudicial foreclosures, though one process is likely to be more common than the other.
- Some states allow lenders to pursue deficiency judgments. Others don't.
- Some states offer loans and grants to certain homeowners to help them try to avoid foreclosure. Other states offer no such aid.
- Some states allow a redemption period of up to one year. Others have no such rule.
- In some states, a foreclosure can be over and done with in 30-60 days. In other states, the process can drag on for nine months or longer.
All of these differences mean some homeowners have multiple opportunities to delay or forestall a foreclosure and stay in their house -- rent free -- for quite a long time, while other homeowners in similar circumstances can be whisked through the process from default to out-the-door with hardly any chance to find a sofa to sleep on, much less an apartment to rent.
In the end, the outcome is the same. The homeowner loses the home and the bank sells the home to someone else. But the process and its disparities raise some troubling questions about equality of treatment under the law.
Do you think the foreclosure process in your state is reasonably and relatively fair to homeowners compared with how they might be treated elsewhere? Why or why not?