Facebook foreclosures may soon reach US
When it comes to Facebook, people expect pokes, polls and pictures. But for those facing foreclosure, Facebook users may soon be receiving notice by online social network. According to Time magazine, the “Facebook foreclosure” is coming soon to a financially depressed neighborhood near you.
Facebook foreclosure began in Australia
In 2008, an Australian court ordered a mortgage lender attempting foreclosure on a home to serve the defaulting owner via Facebook. Only a backup copy of the notice was required at the physical address in Canberra. This court ruling set a precedent. Facebook foreclosures followed in New Zealand, Canada and England, particularly in cases where the defaulting parties could not otherwise be located.
Facebook is happy to oblige
Facebook spokesman Barry Schnitt remarked in 2008 that the online social networking giant was “pleased to see the Australian court validate Facebook as a reliable, secure and private medium for communication.” As the Australian borrowers had not activated privacy protection on their Facebook accounts, the court ruled that the Facebook foreclosure procedure was appropriate. Because borrowers in the Australian and English cases responded to the notice within minutes, lenders consider the Facebook method of serving legal notice effective.
Facebook foreclosure soon to reach US shores
Physical foreclosure notices are a matter of public record in the U.S., which all but eliminates most privacy concerns of a Facebook foreclosure. Time indicates that debt collectors already use Facebook wall comments to track delinquent borrowers down. Moreover, a recent poll found that 81 percent of U.S. divorce cases involve evidence gleaned from Facebook, Twitter and other social networks.
Joseph DeMarco, co-chair of the American Bar Association’s division on cybercrime, noted that online social networks can be an ideal way to reach individuals who “seem to exist only online.”
Recent concerns over the practice of “robo-signing,” in which U.S. banks and lenders automatically foreclosed on properties without first reading the files to ensure potential mistakes were avoided, have cast shadows of doubt on the viability of the Facebook foreclosure process. Mishandling loan modification applications and other documented cases of impropriety among U.S. mortgage lenders have also served to damage the industry’s reputation. The prospect of foreclosure service being as easy as sending a Facebook message, minus additional checks and balances, doesn’t instill critics of the mortgage lending industry with confidence. Considering that the recent U.S. ruling on robo-signing may actually loosen the requirements for mortgage lenders, experts believe there’s good reason for concern.
Daniel Hamilton of the consumer advocate group Big Broth Watch in London sees Facebook foreclosure as a logical step for mortgage lenders, even if it falls short of being desirable when compared with the old standard of serving physical notice on a property.