"In most of the 7,400 cases we analyzed for our earlier investigation, it's possible to determine how much a foreclosed homeowner lost because their lender used an allegedly illegal calculation method. But in more than 1,250, the math is impossible to fully unwind. In these instances, the added amount from the lenders' calculations was then baked into the minimum bidding prices at auction."
"After seeing those prices, no third-party bidder made an offer. Instead, the bank (or investors) that had held the original mortgages were able to purchase these 1,250 properties for $1,000 or less. In some instances, a third-party bidder presumably would have emerged if the minimum bidding price hadn't contained the added interest - and former homeowners could have received cash stemming from a bid above the minimum."
Of 7,400 foreclosure cases, most allow determination of how much a homeowner lost due to lenders' allegedly illegal interest calculations. In more than 1,250 cases the math cannot be fully unwound, and the added amounts were baked into auction minimum bidding prices. After seeing inflated minimums, no third-party bidder made an offer, allowing banks or investors that held the original mortgages to repurchase about 1,250 properties for $1,000 or less. In some instances a third-party bidder might have emerged absent the added interest, which could have produced cash proceeds for former homeowners. Brooklyn has a rule to curb minimum-bid inflation; other counties lack similar rules, leaving legal concerns unclear.
Read at New York Focus
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