For Las Vegas homeowners worried about foreclosure, the media has painted the foreclosure scandal as a sort of “damned if you do, damned if you don’t” situation. That is, the minor benefit to homeowners of delaying foreclosures is vastly outweighed by the economic consequences of dragging out the foreclosure crisis.
However, maybe if we step back, it’s not all that bad. At least, according to an article by investment specialist John Tobey on SeekingAlpha.com. According to Tobey’s article, here are a few reasons why things may not be as bad as they seem.
- It demonstrates that the checks and balances in our legal system are working. The banks tried to short-cut the system. They got caught. And now they’re going back and (hopefully) doing it the right way. And we all get a reminder that rule of law is the basis for the effective functioning of our capitalist system.
- Foreclosure delay may actually be good for the market. In trying to short-cut the system, banks were potentially rushing too many foreclosures onto the market. And the oversupply is what brings the prices down. By having to take a timeout, go back and do things the right way, the foreclosure rate may actually end up being spaced out a little better from a market perspective.
- Guilt-free foreclosure delays. If Tobey is correct in his analysis, then Las Vegas homeowners (and all homeowners) facing foreclosure who benefit from the delay created by the moratorium should not feel any guilt. Not only because it’s not your fault but the banks’ fault for creating the problem. But because it will actually end up being better for the banks’ finances and the economy as a whole.
So if you’ve benefited from a delay in the foreclosure process, enjoy it while it lasts and use the extra time to build up some savings and deal with other pressing issues.
And if you have questions about the foreclosure or loan modification process, you should always feel free to contact a Haines & Krieger attorney at 702-880-5554 for a free initial consultation.