Foreclosure Auctions: Turf War Ensues Between Local Municipalities and Private Foreclosure Auction Firms (Opportunity Knocks for Foreclosure Business Owners)
Unless you’re in the real estate business – and deal with foreclosed properties specifically – most have no idea what happens when a home is foreclosed on. Right now, there’s somewhat of a turf war going on when it comes to dealing with foreclosed properties. All eyes are on Illinois because new legislation around who actually conducts foreclosure auctions affects homeowners directly.
This presents an opportunity for astute foreclosure clean up business owners.
BUT . . . one of the main reasons we bring this to your attention is to enlighten homeowners who have been, or are about to be foreclosed on, of how this new home foreclosure legislation could affect them.
Who Evicts Homeowners When a Home is Foreclosed On
As explained in the ChicagoTimes.com article, Illinois lawmakers have 2nd thought about foreclosure bill:
When a foreclosure is filed in court, judges appoint someone — typically the local sheriff’s office — to oversee the proceedings, from handling the eviction to filing paperwork and reselling the home.
And, this is where the power struggle ensues. You see, local counties around the country routinely charge for their involvement in the home foreclosure process (eg, handling evictions, etc.). They call these “administrative fees” and often runs a few hundred bucks. This money goes back into the county’s general fund.
And, with the loss of property tax money that disappears when a homeowner defaults on their mortgage, a lot of counties are hurting for money now. Furthermore, as the above-mentioned article points out, local municipalities are literally raking in from $1 to a few million dollars a year in these foreclosure “administrative” fees.
And this is why they don’t want private companies – who are vying for this business – to take over. This is what the new law will do. As the article explains:
The new bill would tweak the existing law by transferring power from judges to the plaintiffs — banks or mortgage lenders — who could streamline the sales process and avoid paying county administrative fees by hiring a private company to mediate the foreclosure.
Foreclosure Cleanup Business Tip: Many counties use some of these funds to hire foreclosure cleaning businesses to trashout/maintain foreclosed properties).
How the Newly Proposed Illinois Foreclosure Bill Could Affect Homeowners
Time Equals Money: And face it, anytime the government – on any level is involved with a procedure – the wheels grind slowly. So the argument put up by private companies is, we can get a property back on the market and ready to be sold quicker than if a home was handled as a “Sheriff’s sale”.
Property Value: This protects surrounding property values. A foreclosure in a community affects everyone’s property value. But, the quicker a home is resold, the better for the whole neighborhood because then home values can start to stabilize, which is the first step to recovery.
Save More Homes: Another argument put forth by private firms that auction off foreclosed properties is that if the foreclosure process is handled quicker, many homeowners may be able to work things out with their lender to perhaps even save their home.
I don’t know if this particular argument holds water, as most homeowners need MORE time to save their homes during the foreclosure process; not less.
Neighborhood Safety: The final argument put forth by private companies who want to handle the sale of foreclosed properties is that it will SAVE counties money. Why/how? Well, again, the quicker a home is resold, the less money the county has to spend to maintain the property.
When a property is foreclosed on, it could spend months or even a couple of years in this market, before it is resold or rented. The longer it’s empty, the more chance there is for trouble – everything from vagrants and vandals to general maintenance problems.
So while it all seems to be a “money grab” — to use the words of one attorney who heads a company that conducts foreclosure auctions – on both sides, private companies just may be a bit better equipped to handle the job.
What do you think?
Foreclosure Cleanup Business Owners: How This Law Could Benefit You
This presents another golden opportunity for foreclosure cleanup business owners, for it’s another pipeline to more business. How/why?
Contact title companies, foreclosure attorneys and even your local sheriff’s office and let them know you’re available to handle trashouts, lawn maintenance, boarding up and securing of foreclosed properties, etc. Because, when a home is foreclosed on, all of these foreclosure-type services are definitely needed.
P.S.: Finally, an easier way to get foreclosure cleanup work is here. The Property Preservation & Real Estate Industry Contracting & Subcontracting Directory includes over 1,500 industry contacts to help you get more work – quicker and easier.
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Copyright © 2010 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.