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Outrage: ‘Walkaways’ Can Hurt Homeowners

Facing foreclosure, Archie Stewart abandoned her Cleveland home of 25 years nearly two years ago feeling ashamed and defeated. But as bad as her situation was, it’s worse now: Stewart found out that her name remains on the house’s title because HSBC Bank, which started to foreclose, never followed through.

That left Stewart, 62, a former home health care provider who lives on Social Security, liable for the debt and the property. She only learned that she remained the owner when she applied for subsidized senior housing and was rejected because she still owned a home.

Now the house is considered a public nuisance after being vandalized. And a lien remains on it for more than it’s worth. Stewart has no way to remove her name from the title, and no one else wants the property. “I want them to give me my name back,” she says.

Stewart’s situation is not unique. Homeowners in many cities are now victims of so-called walkaways, in which mortgage servicers begin the foreclosure process but don’t follow through, says Claudia Coulton, a professor of social work at Case Western Reserve University. “I don’t think anybody knows the magnitude of this problem,” she says.

Under current law in most states, homeowners stuck in a walkaway situation have little recourse, says Kermit Lind, a clinical law professor at Cleveland State University who is working to propose state-level legislation to change that.

Michelle Diament is a freelance writer based in Memphis, Tenn.

 

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