By next Tuesday, attorneys general from 40 states are expected to begin joint foreclosure investigations of each state’s largest banks and mortgage firms. Officials will look into fraud allegations like forged documents, fake social security numbers, and numerous transferred mortgages on individual accounts.
On Friday, Bank of America issued a foreclosure freeze. Initially the freeze hit 23 states but was soon after extended to every state in the nation. While the foreclosure freeze is in effect, banks are covering the costs of maintaining seized and foreclosed properties. The freeze also disables banks from recouping expenses on bank-owned sales. Bank-owned properties generally sell fast and at higher bidding prices than anticipated.
House hunters looking for fast bargains will find the foreclosure freeze a definite stall and prolonged inconvenience. Not only are potential home buyers affected by the foreclosure freeze, real estate agents will feel the impact as well because the foreclosure market was a large niche filled with fast sales that closed with nice profits.
In August, banks and lenders took possession of a record 95,364 homes. They filed foreclosures on 338,836 homeowners or one in every 381 households.
State attorneys general have already filed lawsuits and called for foreclosure moratoriums.
The foreclosure freeze would leave a great number of properties vacant and unattended until the freeze is lifted. This may be a positive for homeowners whose foreclosures may be found fraudulent. But treasure hunting foreclosure investors, however, may find that foreclosure purchases will become much more difficult because the legal review of the foreclosed properties may find restitution for those homeowners whose homes and properties may prove to be unlawfully seized or foreclosed.
Nevada ‘s housing market has been hardest hit with foreclosures. Senate Majority Leader Harry Reid asked other banks to follow Bank of America’s example. Reed suggested the banks go review their practices and “ensure they are not unfairly targeting homeowners in Nevada and across the nation.”
In addition to Bank of America, PNC and mortgage servicer Litton Loan Servicing also placed a freeze on foreclosures while they review documents. All of the banks who willingly or forcefully participate in the foreclosure freeze will review paperwork on almost half a million mortgages.
Comment and add to the story without registration, but keep the comments meaningful please. Links are not accepted.
