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February 07, 2011

Stalling the Foreclosure Process: The Complexity Behind Bank Walkaways

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A new report from Case Western Reserve’s Center on Urban Poverty and Community Development documents the problem of so-called bank walkaways in Cuyahoga County, Ohio.

The report, titled Stalling the Foreclosure Process: The Complexity Behind Bank Walkaways, takes an in-depth look at stalled foreclosure cases in Cuyahoga County in order to describe the factors involved in delayed foreclosure cases. Foreclosure cases that remain unresolved for long periods of time can result in serious spillover damages, incurring costs like unpaid taxes, unpaid utility bills, nuisance abatement assessments, maintenance, and in the most severe cases, could include fire damage or demolition.

The researchers examined the court records of 999 stalled foreclosure cases (cases where a decree of foreclosure has been granted but the property did not go to sheriff’s sale for over 180 days), finding that 56 percent of these stalled foreclosure cases could possibly be considered bank walkaways. The researchers also found that the possible bank walkaways are more likely to be vacant, tax delinquent, and demolished.

When considering the status of a foreclosure case in court, the researchers determined that cases where a plaintiff (the mortgage lender or subsequent note holder) took no action for 180 days or more after receiving a foreclosure judgment, and cases where a plaintiff dismissed a foreclosure judgment for reasons that did not involve resolving the mortgage lien, among other scenarios, could possibly be considered bank walkaways.

“It’s difficult to pinpoint exactly what’s going on with a foreclosure case,” reports Michael Schramm, co-author and Research Associate at the Center on Urban Poverty. "Paper and electronic court records might be missing details, and plaintiffs often only give boiler-plate reasons for their actions. But defining the problem and outlining how to recognize it is the first step in finding the solution.”

Click here to download the file.

For questions or comments about this report, please contact Michael Schramm at 216-368-0206.

This work has been possible using the Center's freely available, social, economic, neighborhood and property information database, NEO CANDO, can be found on the web here.