Foreclosure mediation needs to end now

The destruction of home values caused by the Great Recession remains a drag on Rhode Island’s economy. And unfortunately, the actions of U.S. District Court Judge John J. McConnell have kept the state from recovering. More

To continue reading this article, please do one of the following.



PBN Editorial

Foreclosure mediation needs to end now

Posted 9/30/13

The destruction of home values caused by the Great Recession remains a drag on Rhode Island’s economy. And unfortunately, the actions of U.S. District Court Judge John J. McConnell have kept the state from recovering.

Judge McConnell put a halt to the foreclosure process in federal courts, ordering lenders and homeowners to enter into mediation, with the expectation that lenders would modify loans – read reduce principle – allowing people to remain in their homes.

This approach would seem to be a humane solution to the significant human suffering caused by the bursting of the housing bubble and the near collapse of the financial system. But in the long run, this approach is wrong-headed and prolongs the sickness of the real estate market. Oh, and it also short-circuits the correct and deliberate functioning of the law.

The 1st Circuit Court of Appeals took that stance in its June ruling that told Judge McConnell to go back to the drawing board. While considering just what to do, he has asked that those in the process – more than 800 cases by last count – continue with the mediation. As far as an impartial observer can see, this approach is not getting any closer to solving the problem, but it is enriching attorneys on both sides of the aisle.

It is time that this approach ends. Rhode Island’s real estate market appears to be improving, but it still has a long way to go. The Ocean State has one of the largest gaps in the nation between its median home price now and at the peak in 2006. One can lay much of that difference on Judge McConnell’s stay. And with the market being artificially supported by the order, there are many people who cannot find a new, more affordable home. •

Calendar
PBN Hosted
Events

Please join PBN on September 10th for the 3rd Annual Fastest Growing & Innovative Companies program at Rosecliff Mansion in Newport. Seating is limited so be sure to register early.
Advertisement
Purchase Data
Book of Lists
Lists
Book of Lists cover
PBN's annual Book of Lists has been an essential resource for the local business community for almost 30 years. The Book of Lists features a wealth of company rankings from a variety of fields and industries, including banking, health care, real estate, law, hospitality, education, not-for-profits, technology and many more.
Data icons
Data can be purchased as single lists, in either Excel or PDF format; the entire database of the published book, in Excel format; or a printed copy of the Book of Lists.
  • Purchase an e-File of a single list
  •  
  • Purchase an e-File of the entire Book of Lists database
  •  
  • Purchase a printed copy of the Book of Lists
  •  
    National
    Local
    Latest News
    Advertisement