Banks' Dirty Secret: Letting Foreclosed Homes Decay Sparks Outrage

FOR IMMEDIATE RELEASE

Banks' Dirty Secret: Letting Foreclosed Homes Decay Sparks Outrage

Hollywood, FL - September 11, 2025 - As of July 2025, 187,000-208,000 per Grok and ChatGPT, homes in foreclosure are contributing to billions in annual losses due to prolonged and inefficient short sale processing by lenders. These delays, marked by inconsistent procedures and repetitive paperwork, often lead to buyer cancellations, forcing realtors to restart the process. Lenders' practice of dual tracking-pursuing foreclosures while delaying short sales-exacerbates losses, violates laws and regulations, and burdens taxpayers who absorb part of the financial impact.

Key Issues:

Deterioration: While many homeowners remain in their homes without paying the mortgage during the excessively long process, some abandon their properties, which then fall into disrepair and deteriorate. Lenders appear apathetic to the additional losses caused by their negligence, resulting in thousands of dollars in lost property value.

Excessive Approval Times: Short sale approvals took 4-9 months from 2008-2014, averaging six months when lenders adjusted to the workload. Since the 2022 market crash, caused by Federal Reserve interest rate hikes, lender inconsistencies, redundant documentation requests, and expired paperwork due to lenders' delays have worsened. Additionally, in their unlawful dual tracking, lenders turn files over to "foreclosure mills" to hasten foreclosures, adding another layer of communication and complications to an already time-consuming and complex process.

Dual Tracking - Unlawful Practice: The unlawful practice of dual tracking is practiced with impunity by most lenders and their "foreclosure mill" attorneys as they continue foreclosures while evaluating short sales or loan modifications. Under the Dodd-Frank Act and the Consumer Financial Protection Bureau (CFPB) regulations since January 2014, "If a homeowner submits a complete short sale or loss mitigation application more than 37 days before a scheduled foreclosure sale, servicer must pause foreclosure sales."

Realtor Challenges: Realtors invest significant time marketing properties, showing homes, and preparing extensive paperwork, yet receive no compensation if short sales are denied and properties proceed to foreclosure. Foreclosed homes are assigned to Realtors as Real Estate Owned (REO) listings, rewarding those REO Realtors for minimal effort.

Financial Impact: Extended processing increases carrying costs (unpaid mortgages, HOA fees, taxes, insurance), with foreclosures costing banks up to an additional $50,000 per property-more than short sales. The banks' losses are often mitigated by taxpayers, who may also bear part of these losses through mortgage insurance programs like FHA (MIP), VA (Guaranteed), Conventional Mortgages (PMI), Fannie Mae, and Freddie Mac.

Historical Context: The 1999 repeal of the Glass-Steagall Act of 1933 with the Gramm-Leach-Bliley Act reinstated risky (fraudulent) lending practices prevalent before the Great Depression. This repeal triggered the 2007 housing crash as millions of homeowners entered foreclosure. The Certified Distressed Property Expert (CDPE) designation, recognized by the National Association of Realtors and most banks, was created to help realtors navigate the complexities of short sales.

Edward Goldfarb and Deborah Franza-Cowart of United Realty Group, with over 900 short sale and loan modification approvals, emphasize the need for reform. "This systemic inefficiency costs billions and harms homeowners, realtors, and taxpayers," said Goldfarb. "Streamlined processes, better communication, and reduced documentation demands would preserve property values and minimize losses."

Media Contact: Edward Goldfarb, Realtor - CDPE, NASSPro, Equator Certified
United Realty Group
Phone: (954) 605-8427
Email: EdGoldfarb@Realtor.com
Website: Stop4ClosuresNow.com
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Edward Goldfarb PA - United Realty Group
1830 Radius Dr Apt. 809, Hollywood, FL 33020
EdGoldfarb@Realtor.com
954-605-8427

About Goldfarb and Franza-Cowart Based in Hollywood, FL, Edward Goldfarb and Deborah Franza-Cowart have a remarkable record of over 900 approved short sales and loan modifications since 2008. Leveraging CDPE expertise to navigate complex distressed property transactions. Edward Goldfarb, a realtor's realtor, has written numerous articles on pre-foreclosure properties and bank procedures. Edward has served as a distressed property panelist at national and regional seminars, and has been quoted in USA Today, Miami Herald, and other newspapers, as well as interviewed by NPR. Deborah Franza-Cowart is one of America's most effective distressed property negotiators with a near perfect record of approvals.

This release was published on openPR.