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U. S. Foreclosed Homeowners Go To Court On Their Own

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Saving your home from foreclosure is increasingly a do-it-yourself project.

Lawyers are scarce and free legal assistance is overwhelmed in New Mexico, so a community center here is offering an hourlong class in how to download the correct forms, decipher the lingo and mount a defense, however tentative and primitive, against a multibillion-dollar bank.

“I don’t see success for someone like me who doesn’t understand the law,” said Skylar Perea, a senior care aide who fell behind on her payments during the eight months she was out of a job. “But it’s better than nothing.”

In New Mexico, New York, Florida and the 20 other states where foreclosures require a judge’s approval, homeowners in default have traditionally surrendered their homes without ever coming to court to defend themselves. (In the 27 other states, including California, Nevada and Arizona, homeowners have a much harder time contesting a foreclosure even if they want to.)

That passivity has begun to recede. While many foreclosures are still unopposed, courts are seeing a sharp rise in cases where defendants show up representing themselves.

One factor driving the increase is the changing nature of foreclosure.

When people went into default in 2008, it was generally because of the exploding cost of a subprime loan. Unable or unwilling to handle sharply higher payments, the homeowner walked away with little protest.

Now many defaults are prompted by stretches of unemployment like Ms. Perea’s. These owners do not have the resources to come up with all their missed payments at once. But if they can persuade their lender to restructure the loan instead of seizing the house, they have a chance of staying put.

In New Mexico, this is where the hourlong workshops come in. “When you cannot pay, this is called ‘a breach of contract,’ ” Angelica Anaya Allen, director of the nonprofit Fair Lending Center, explained to a small but diverse group one recent morning.

Young and old, solo and in couples, the homeowners in Ms. Anaya Allen’s class were all in breach, clutching special-delivery packages from their lenders announcing that the machinery was now engaged to evict them. They took notes, asked questions — is the courthouse the building on Fourth Street with the blue roof? — and were resolute if not quite eager for battle.

An interesting development, I wonder how sympathetic the judges are to these DIY defendants?

Although to be honest I suspect the chances of winning are remote.

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

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