We are talking about a case involving a mortgage field services company and the Illinois Attorney General. As we explained in our last post, mortgage servicers and lenders hire the field services provider to take care of a vacant pre-foreclosure or bank-owned property until it sells. Banks are not in the business of being landlords, but a property left to decay will not only lose value itself but will also lower property values for homes in the neighborhood. Field services companies are essentially in the business of preventing blight by, as one company put it, keeping properties secure, safe and well-maintained inside and out
We learned a few important lessons about lenders during the foreclosure crisis. We also learned about just how touchy the real estate market can be.
People take out second mortgages or home equity loans for all sorts of reasons. During the boom, a second mortgage was a way to leverage the equity created by rising home prices. The money would be used for home improvements, a vacation, a business start-up or any added living expense. When the recession hit, second mortgages, where available, were used to pay college tuition, for example, or to make ends meet during the job hunt.
The U.S. Supreme Court released its decision in Bank of America v. Caulkett on June 1, and just about everyone who has anything to do with bankruptcy has been talking about it ever since. The Court was asked to decide whether a Chapter 7 liquidation debtor can void a second mortgage when the collateral property is worth less than what the debtor owes on the first mortgage. The answer was unanimous: No.