April 2014

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ZONE(-ING) DEFENSE — With March Madness in full swing, now is a great time to review how local zoning ordinances can turn a mortgage servicer’s foreclosure layup into a blocked shot. Many U.S. states rely on a judicial process for foreclosing on real estate title that is similar to a traditional lawsuit.1 This process means that even without debtor resistance, getting to the foreclosure sale may take months; add resistance and it may take years. In that interim, the servicer may decide not to pursue active property management or the appointment of a receiver to manage the collateral, as these measures tend to involve additional legal and management fees and expenses.  On the surface, it may appear to the servicer that the property is being adequately managed by the current owner. But what lies beneath the surface? (more…)