Bank of America, announced, this week, that it is extending its suspension of foreclosures, that has forced millions out of their homes, to all fifty states. An immediate effect of the action, could ultimately be a temporary stay of execution and lay the groundwork, despite the turmoil, for a real estate recovery. The pause in the foreclosure process will be brief as they ensure their processes and paperwork are in order before entering court. To add to the uncertainty and confusion, Bank of America has not halted the sale of foreclosed properties.
This has caused other mortgage holders, even those with no known problems, to follow the lead of the nation’s largest bank. Increased pressure from the courts, Congress, and other government agencies, have forced lenders to view defaulting homeowners with a different perspective, and seek innovative solutions to the mammoth problem.
In their pursuit of rapid home repossessions, some lenders and their attorneys have been accused of not following proper procedures, and using questionable foreclosure methods. Lenders’ flawed paperwork, have caused some of the highest foreclosure levels in recent history. In California, Nevada and Arizona, along with twenty other states that require judicial review of foreclosures, evictions are expected to slow sharply, as state and national law enforcement officials investigate the ever increasing crisis.
What was originally considered to be sloppy paperwork; has now emerged as a blatant disregard for mortgage lending laws, as well as foreclosure statutes. In their haste to reclaim houses, and bypass existing laws, mortgage finance companies have created stricken neighborhoods across the country. But, as the foreclosure system is revamped many homeowners are hoping the eviction will never happen. The fear of a large number of foreclosed homes entering the market will undermine sales and plummeting real estate prices will never find a bottom line.
Homeowners, facing foreclosure, are expected to hire attorneys as they become aware of mortgage holder’s problems. It is possible that they will fight the procedures in court to evict them from their home. It is expected that homeowners already ousted from their property may challenge the eviction in court claiming improper procedures. If the court finds in their favor, this could prove to be a dilemma for the family who bought the foreclosed property.
G.M.A.C. And J. P. Morgan Chase
Meanwhile the nation’s fourth largest mortgage lender, G.M.A.C. Mortgage lender is having its share of problems. Old Republic National Title, a leader in the title insurance business, issued a statement o their agents to cease writing title insurance on properties foreclosed by GMAC. G.M.A.C. as well as, J.P. Morgan Chase, have acknowledged “missteps” in the foreclosure process and have suspended foreclosure proceeding in twenty-three states where court approval is required.
J. P. Morgan Chase admitted that this involves at least fifty-six-thousand properties nationwide which it describes as a “technical paperwork problem with improper documentation” has hired hundreds of lawyers and executives to sort through the mess. Stating that they can fix the problem, J.P. Morgan Chase has refused to suspend any foreclosure proceedings.
The U. S. Treasury Department in response to demands from the Attorney Generals in several states for an investigation, has asked regulators to “investigate these troubling developments.”
Representative Alan Grayson, a Democrat of Florida, noted that the breakdown in the system unsuccessfully asked the Florida Supreme Court to halt all foreclosures in the state.
Harry Reid, Senate Majority Leader, and Edolphus Towns, D. NY, head of the House Committee on Oversight and Government Reform, asked mortgage lenders across the country to freeze foreclosure proceedings after the announcement by Bank of America.
The Senate Banking Committee, lead by Christopher J. Dodd, will be holding a hearing on foreclosures on November 16, 2010.
Gold Mining and Nightmares
While legal firms all over the United States are finding goldmines in the foreclosure mess, real estate agents are not so lucky. The real estate market is basically on “hold” at the present time and the agents find themselves caught between the confused and often angry buyers and sellers. This situation has become a nightmare that surely keeps many awake at night. After all, a real estate agent is also home owner. If the market is “on hold” how do they pay their mortgage, as well as satisfy their customers.
It is going to take awhile to sort through the foreclosure disaster, hopefully, the banks and lending institutions have learned a valuable lesson and will insist that quality work, and adherence to real estate foreclosure laws, are extremely important. There are no short cuts, the financial institution has a responsibility to follow the mortgage lending laws in every state they choose to conduct business