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Illegal foreclosures on soldiers could slow housing recovery

In exchange for risking their lives, military members enjoy some very basic financial protections under the law, but not all financial institutions observe these laws.

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Imagine being an active service member and enduring battle abroad. Many of you have served in the military and know the difficulties of daily life of those that dedicate themselves to defending our nation.

Imagine your wife calling you with your youngest child crying in the background and his sister throwing a tantrum in the other room. Your wife is in tears because she’s gotten a foreclosure notice.

You’re doing the best you can to hold it all together from so far away, but you were just talking with your buddy about the Servicemembers Civil Relief Act (SCRA) about how legally, even in states that don’t require it, only a judge can authorize a foreclosure and only after hearing where you’re represented.

Nonetheless, the bank violates the law and kicks your wife and children to the curb, takes back the house where you built a small tree house for the kids, skipped rocks on the river with your wife, held countless barbecues and last kissed your wife goodbye when you were called to fight abroad.

Coming home to no home…

That’s not a horror story, it’s the story of Sgt. James Hurley who since before his return to the states in Decmeber 2005 (two years after Bush signed into law the revised SCRA) has had his home foreclosed on (sans judge) and sold by the bank for only $76,000.

Sgt. Hurley’s battle with Deutsche Bank is not an isolate incident. Service members are returning home to foreclosed houses without a judicial ruling, interest rates above 6% (also illegal under SCRA), evictions not in line with SCRA and more.

We take it with a grain of salt that foreclosure rates are up, but there are protections in place to protect service members against specific bank and landlord actions and Deutsche Bank (alongside several others like Morgan Stanley) are blatantly violating SCRA and getting away with it. We are appalled not only at the bank’s behavior but their directly giving a reason for more governmental oversight and regulation (oh boy, this should be fun).

How dare you abuse our defenders this way and how dare you beg Uncle Sam to micromanage you and slow down the housing recovery? Realtors, please get to know SCRA so you can stand up when you see wrongdoings! For the SCRA summary, click here and for the full text, click here.

Lani is the Chief Operating Officer at The American Genius - she has co-authored a book, co-founded BASHH and Austin Digital Jobs, and is a seasoned business writer and editorialist with a penchant for the irreverent.

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21 Comments

21 Comments

  1. Aaron Catt

    January 27, 2011 at 8:17 pm

    How again does this story support the headline with regard to “could slow the housing recovery”.

    Yes, the behavior and violation of the SCRA is appalling, but I’m interested in seeing how this could slow recovery. Are these types of violations making up a significant amount of distressed real estate? What concentrations or percentages of these violations have a direct impact on stabilizing housing?

    • Lani Rosales

      January 28, 2011 at 1:07 am

      Aaron, I probably wasn’t very clear, so let me elaborate…

      When you take a patriotic situation and turn it into a news soundbite (as Sgt. Hurley’s has been), people begin to say, “how dare banks treat our soldiers this way?” and they’re right- how dare they?

      But then, people start saying, “we have to do something about it!” and a rally cry begins. People begin looking deeper into SCRA violations and say that the banks are out of control (which they are). So far, so good.

      But then come the talking heads that say that the banking industry needs more regulation and there needs to be more committees formed to oversee and micromanage banking. From there, it’s easy for governmental agencies to go ahead and step in to other banking issues since they’re already there and before you know it, Uncle Sam’s tricky sticky fingers are in all facets of finance. Still see no problem? That’s fine, let’s keep going.

      So then, the government has stepped in to regulate and then regulate some more and the system becomes overwhelmed because (for example), servicers have limited processing staff and governmental programs like HAMP have proven to be a complete failure.

      So yes, I see this patriotic symbol as a potential talking point for politicians who seek deep regulation which ultimately slows the already fatigued industry (partly their own fault, I’m certainly not excusing them) and stresses the entire system, potentially slowing the recovery of the housing industry. We’re bouncing at the bottom and might be able to recover in the next three years, but if Sticky Fingers steps in, the gears will get all gummed up!

      What do you think? 🙂

  2. MH for Movoto

    January 31, 2011 at 12:35 pm

    This is the kind of thing that’s just so reprehensible in every way that it completely takes my breath away.

  3. naplesflorida

    February 3, 2011 at 10:28 am

    What a shame.

    I was drafted for 2 years in the South African army and we got nothing other than dicipline out of it.

    At least here there is the GI bill

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Austin

Austin tops the list of best places to buy a home

When looking to buy a home, taking the long view is important before making such a huge investment – where are the best places to make that commitment?

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Looking at the bigger picture

(REALUOSO.COM) – Let us first express that although we are completely biased about Texas (we’re headquartered here, I personally grew up here), the data is not – Texas is the best. That’s a scientific fact. There’s a running joke in Austin that if there is a list of “best places to [anything],” we’re on it, and the joke causes eye rolls instead of humility (we’re sore winners and sore losers in this town).

That said, SelfStorage.com dug into the data and determined that the top 12 places to buy a home are currently Texas and North Carolina (and Portland, I guess you’re okay too or whatever).

They examined the nerdiest of numbers from the compound annual growth rate in inflation-adjusted GDP to cost premium, affordability, taxes, job growth, and housing availability.

“Buying a house is a big decision and a big commitment,” the company notes. “Although U.S. home prices have risen in the long term, the last decade has shown that path is sometimes full of twists, turns, dizzying heights and steep, abrupt falls. Today, home prices are stabilizing and increasing in most areas of the U.S.”

Click here to continue reading the list of the 12 best places to buy a home…

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Housing News

Average age of houses on the rise, so is it now better or worse to buy new?

With aging housing in America, are first-time buyers better off buying new or existing homes? The average age of a home is rising, as is the price of new housing, so a shift could be upon us.

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aging housing inventory

The average home age is higher than ever

(REALUOSO.COM) – In a survey from the Department of Housing and Urban Development American Housing Survey (AHS), the median age of homes in the United States was 35 years old. In Texas, homes are a bit younger with the median age between 19 – 29 years. The northeast has the oldest homes, with the median age between 50 – 61 years. In 1985, the median age of a home was only 23 years.

With more houses around 40 years old, the National Association of Realtors asserts that homeowners will have to undertake remodeling and renovation projects before selling unless the home is sold as-is, in which case the buyer will be responsible to update their new residence. Even homeowners who aren’t selling will need to consider remodeling for structural and aesthetic reasons.

Prices of new homes on the rise

Newer homes cost more than they used to. The price differential between new homes and older homes has increased from 10 percent traditionally to around 37 percent in 2014. This is due to rising construction costs, scarcity of lots, and a low inventory of new homes that doesn’t meet the demand.

Click here to continue reading this story…

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Housing News

Are Realtors the real loser in the fight between Zillow Group and Move, Inc.?

The last year has been one of dramatic and rapid change in the real estate tech sector, but Realtors are vulnerable, and we’re worried.

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Why Realtors are vulnerable to these rapid changes

(REALUOSO.COM) – Corporate warfare demands headlines in every industry, but in the real estate tech sector, a storm has been brewing for years, which in the last year has come to a head. Zillow Group and Move, Inc. (which is owned by News Corp. and operates ListHub, Realtor.com, TopProducer, and other brands) have been competing for a decade now, and the race has appeared to be an aggressive yet polite boxing match. Last year, the gloves came off, and now, they’ve drawn swords and appear to want blood.

Note: We’ll let you decide which company plays which role in the image above.

So how then, does any of this make Realtors the victims of this sword fight? Let’s get everyone up to speed, and then we’ll discuss.

1. Zillow poaches top talent, Move/NAR sues

It all started last year when the gloves came off – Move’s Chief Strategy Officer (who was also Realtor.com’s President), Errol Samuelson jumped ship and joined Zillow on the same day he phoned in his resignation without notice. He left under questionable circumstances, which has led to a lengthy legal battle (wherein Move and NAR have sued Zillow and Samuelson over allegations of breach of contract, breach of fiduciary duty, and misappropriation of trade secrets), with the most recent motion being for contempt, which a judge granted to Move/NAR after the mysterious “Samuelson Memo” surfaced.

Salt was added to the wound when Move awarded Samuelson’s job to Move veteran, Curt Beardsley, who days after Samuelson left, also defected to Zillow. This too led to a lawsuit, with allegations including breach of contract, violation of corporations code, illegal dumping of stocks, and Move has sought restitution. These charges are extremely serious, but demanded slightly less attention than the ongoing lawsuit against Samuelson.

2. Two major media brands emerge

Last fall, the News Corp. acquisition of Move, Inc. was given the green light by the feds, and this month, Zillow finalized their acquisition of Trulia.

…Click here to continue reading this story…

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