The amount of foreclosure properties and how long it takes to get them into the hands of responsible home buyers is a huge issue facing the recovery of the housing market and overall economy. Last week Bank of American announced it would stop the foreclosures in order to get their paperwork problems worked out. This led to other banks taking similar action. In gaining a better understanding of this issue and how it may affect our market here in Chester County, we wanted to share a few articles we found.
The first one is written by Jeff Corbett of TheXBroker.com. He writes:
This situation is really about A. The process of paperwork, specifically establishing proper chain of title to property, and B. Having a human being actually review documents they represented they have through notarization.
In regards to A. it is vital to establish a clear chain of title when a property changes hands to insure the claims against it (in this case a mortgage evidenced by a promissory note) are properly released or transferred. If a clear chain of title cannot be established (or is broken) claims may be rendered void, or in the alternative a property may seem to have a clear title when in fact someone has a legitimate claim against it.
In regards to B… At the same time, there has been such a crush of new foreclosures entering the system that banks were essentially having notaries rubber stamping foreclosure files as fast as they could without reviewing the files to insure they contained the actual documents and figures they were supposed to. One lender was using 7 or 8 notaries to notarize over 18000 files per month, obviously they couldn’t be thoughtfully reviewing that many files.
The second article is written by Ruth Ravve from Fox News who points out that there are as many as 120,000 new foreclosures every month. That’s huge. She writes in her article entitled “Foreclosure mess deepens…” :
Charles Brown of CB3 Financial says that instead of selling foreclosed homes, banks have been hanging onto them, waiting for the economy to improve. “These banks that have all this pent-up inventory will unleash it on the market, as soon as they see a minor uptick in real estate prices,” Brown said, which will, in turn, reduce housing prices even further.
Experts agree that we have not hit rock bottom yet. People are still losing their jobs. Homes are going into foreclosure at a rate of 120,000 a month. Many who feared foreclosure in their future say they tried to work with the banks for “loan modification” — but they “were denied or given the runaround,” Rep. Mike Quigley of Illinois said. The banks weren’t working with people so they made the problem worse. “Servicers are famous for delay tactics…like claiming the fax machine was out of paper,” he said.
If you come across any other good articles on this topic, please leave a comment with a link.
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Technorati Tags: Foreclosure, National Market
