Should struggling homeowners get years, not months, to work out their problems?
That's exactly what a proposal now being hotly debated on Beacon Hill right now would do, turning what is now a months-long process into one that could drag on for years.
But you first have to cut through a fair amount of baloney - from both the activists and the banks - to figure that out.
A coalition of anti-foreclosure activists and union officials wants to give homeowners facing foreclosure the chance to make their case to a judge.
As it stands right now, lenders in Massachusetts simply have to file a petition to foreclose if you fall behind on your payments, and, within a few months, your home could be on the auction block.
And that's more in theory than in actual practice, with state land court already so backlogged it now takes on average just over 11 months from the time of the first foreclosure notice to auction.
"Banks and lenders, through their predatory practices, put people in positions where they can too easily rip away their homes and their property," Tim Sullivan, spokesman for the AFL-CIO of Massachusetts, argued at a State House hearing yesterday, according to this account in State House News. "How do we make it harder for them to rip away the American Dream?"
OK, there is clearly a fairness issue here. But if the experience in other states that have judges review foreclosure cases is any indication, we are looking not a minor tweak here, but a pretty sweeping overhaul of the state's current foreclosure system.
The real debate here should be whether we want to give homeowners as much as two to three years to work out their problems, rather than a few months time.
While no one is laying it out like this, they should be. For that is what the experience has been of other states that have gotten judges involved in the process.
Surprisingly, the banking industry reps that were at yesterday's State House hearing were as ineffective as they were indignant, at least from the typically thorough State House News account I am relying on here. (The other lame argument, put forth by the court officials, is that, thanks to budget cuts, they don't have the resources do this.)
The bill, if passed, would add a few months to the foreclosure timeline, one local banking group argued.
Really? The numbers tell a much different story.
In New York, a state where judges have to sign off on foreclosures, the backlog of cases has grown so dramatically that it now takes an average of 1,019 days for a bank to give the boot to a homeowner who has stopped making payments, RealtyTrac finds in a report just released this morning.
Do the math, that is nearly three years. In New Jersey, which also had judicial review, it takes 964 days, or well more than two years, while in Florida the average time from foreclosure notice to auction is 806 days. Moreover, the foreclosure timelines in New Jersey and New York just keeps growing - in New York it expanded 37 percent over the past year - even as the overall number of foreclosure cases has dropped 60 percent over the past two years
Let's get real with what we are talking about here. Maybe homeowners should get their day in court. But it's not a small change we are looking at here.
