Just released on October 8, 2010... Bank of America is stopping foreclosures in all 50 states effective immediately. Foreclosures in 23 states were halted the previous week, as those foreclosures processed through the courts needed to undergo paperwork reviews. Then, last week, BOA announced it was halting the process in all 50 states.
Reasons cited for the moratorium include processors approving foreclosure paperwork without properly reviewing it, and banks changing locks on homes which were not even in foreclosure, while the homeowners were inside. (We know of someone who personally encountered this on a Friday afternoon, only they came home to find they were locked out of their house and it took three days to sort out.)
In the years leading up to the housing crash, investors hungered for risky mortgages that banks would bundle and re-package into securities. This market drove banks to initiate more and more riskier mortgages, as quickly as possible. The massive amounts of shoddy paperwork that accompanied this process are now being exposed. Analyst Christopher Whalen predicts the country has slogged only a quarter of the way through the massive foreclosure process at this time.
What will the impact be on our market?
Of course for those in foreclosure, this means they can stay in their homes longer. But if the mortgage is not redeemed, foreclosure will still be imminent.
For buyers, it might mean that the foreclosed home planned to be purchased may no longer be an option, as the foreclosure, if reviewed, could be determined to be invalid. There is a lot of uncertainly right now in this area.
For sellers, this means less competition, as fewer foreclosures will be hitting the market for a period of time. And less competition equals higher prices. At least for now.
More to come on this recent, hot topic.
AN UPDATE TO THIS POST CAN BE FOUND HERE.
Comments