Foreclosure Backlogs Could Take Decades To Clear Out

We have a client who purchased a commercial property at a foreclosure action by a second mortgagee. Now his LLC owns the property subject to the first mortgage and the first mortgagee is foreclosing in Kings County. Our client wants to settle the case and pay off the first mortgage but disputes the amount due. Both sides want the next step to occur – the appointment of a referee to compute. An order to that effect was submitted to the court over a year ago. It has not been signed and the court is reporting that there are delays of more than one year in processing foreclosure documents. It is a curious thing when the parties would like to know the amount required to settle and it is the court that is causing the delay and preventing progress. The system is broken.

It is not a good thing for homeowners or lenders to be in this situation. Yes, homeowners may be living rent free but there is a constant worry hanging over their head and interest continues to accumulate. We are working with many homeowners to try to help them resolve these types of problems with workouts and modifications.

Here is a USA Today article about the delays in the courts.