KeyBank, which owned the second mortgage, foreclosed on the woman anyway, despite the fact that it would lose far more money than if it had just walked away. Cox runs the numbers:
After spending over $4,000 on foreclosure costs and legal fees, it purchased my client’s interest in the property at its foreclosure sale (there were no other bidders for this worthless second interest) and it did evict this woman from her home at the beginning of October. She is now living in the basement of her daughter’s house. Since the interest in this home that it purchased was still subject to the outstanding first mortgage, it then paid $50,000 to the first mortgage holder so that it could own full title to the property as it made plans to re-sell it. Thus, at this point it had over $54,000 invested in gaining full title to this property. Last week, KeyBank listed this property for sale for $44,000. It will surely net no more than $40,000, if it can sell it at all. This will leave the bank with a real cash loss of over $14,000, a woman living in her daughter’s basement who was willing to pay at least some level on her second mortgage, her community with an empty and devalued property in its midst, and a very sour taste for all of us who try to help these people.
This, to put it kindly, is idiotic. You’d think Key Corp.’s shareholders might have something to say about that. Oh, who am I kidding?
Read Cox’s whole piece, which is one of the better op-eds I’ve read in a while. Here’s hoping we see more from him.
— The bottom 99 percent are doing poorly in the wake of this finance-led recession. The top 1 percent are doing just fine—and that includes many (most?) of our elected representatives.
I almost don’t need to say this, but you think there might be a connection between that and the lack of urgency on the unemployment front?