It was over quick in a Nassau courtroom Nov. 9 – a few homes sold as foreclosures while 76 other auctions were held off.
It’s been more than two weeks since the state’s chief judge ordered attorneys for foreclosing lenders to file sworn statements saying they’ve taken “reasonable steps” to verify details of the case.
But such filings have been submitted only in about five auction cases out of scores of pending sales, court officials said. That has led to mass postponements of auctions in state court in Mineola, part of an effort to make sure borrowers don’t lose their homes due to lenders’ sloppy documentation, including “robo signing,” in which lenders’ representatives sign foreclosure documents without knowing the facts.
All this has made buying foreclosures a more risky venture for two real estate investors at the auctions Nov. 9, especially when borrowers challenge their foreclosure judgments after the auctions.
“We’d be panicking,” said Shoba Prakesh, a Plainview-based real estate agent who’s been bidding on foreclosures for three years. “Too much torture.”
Her fellow investor, Chacko Varghese from New Hyde Park, said the documentation issues come on top of other common risks in buying foreclosures, such as former homeowners who refuse to leave. On one of his foreclosure buys, a lawyer and his bedridden wife forestalled eviction for two years, even as Varghese was paying property taxes and mortgage payments on the house.
He’ll continue bidding on foreclosure auctions because good deals balance troublesome ones, he said, but “it’s not an easy business.”