Thursday, June 03, 2010

Delays in recording foreclosure deeds

We receive many calls inquiring about the status of foreclosed properties. Tenants, neighbors and other interested parties might witness the foreclosure auction at the property and call seeking contact information for the new owner. Many times we (and our registry records) are unable to assist because of delays in recording foreclosure deeds.

It's my understanding that in most foreclosures, the high bidder is required to sign a memorandum of sale that allows 30 days to close the purchase which is completely understandable. But most foreclosure deeds seem to be recorded long after that 30 days have passed. In an attempt to learn just how much longer that is, I examined foreclosure deeds recorded for property in Lowell during 2008 and 2009 and noted the auction date for each. There were 379 foreclosures in Lowell in 2008 and they took an average of 109 days from auction to recording of the foreclosure deed. In 2009, there were 238 foreclosures and they took and average of 67 days from auction to recording the foreclosure deed.

These times seem quite long, especially when you consider that in almost all cases, the buyer at the auction is the foreclosing lender. One of the problems with delays of this type is that the property remains in a type of ownership limbo which is detrimental to tenants and neighbors. Unfortunately, with all the other issues swirling around our current economic crisis, no one seems all that interested in this particular issue.

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