Home > Real Estate > Delayed Foreclosures Moving Back Into The Market

Delayed Foreclosures Moving Back Into The Market

— Photo Courtesy of http://cocoa-foreclosure-defense.com/

“The dam may not burst in the next 30 to 45 days, but it will eventually burst, and everyone downstream should be prepared for that to happen — both in terms of new foreclosure activity and new short sale activity,”Brandon Moore, RealtyTrac’s CEO.said in a statement.

The dam  that will burst   because of the postponed foreclosures that banks were hesitant  to proceed with during the robo-signing investigation on fradulent foreclosure documentation.  Lenders hit the pause button on foreclosures because they “were afraid that anything they did would be under a microscope,” said Eric Higgins, a professor of business at Kansas State University.

The majority of the delayed foreclosure processing  were in the states that have “judicial foreclosures”. The bankers with mortgages in these states bank stopped filing foreclosure if they were not 100% sure the documents were correct and could stand up in court.

Some homeowners  who  were in default  but did not receive their foreclosure notices were stuck in limbo during the  robo banking investigations.  They like many in Las Vegas  abandoned their homes when there was no bank communication  and they were not able to get answers and only reached  the automated voicemail  endless loop at their banks.

Many others  stopped paying their mortgage and remained in their home especially when the banks could not provide any further status of their foreclosures or when their mortgage was sold from one bank to another and their accounts were lost in the shuffle.

Others just squatted and did not pay for many months and years. In Florida, the average time was 861 days, and in New York it was 1,056 days — close to three years.

But now the regulators have come to a $26 billion settlement  with the banks to include  Bank of America, JPMorgan Chase, Citibank and Wells Fargo . which means that inventory which has been lacking in the market  have  been showing up in the market now as potential short sales and foreclosure properties and the flow of foreclosures will continue back into the market now that the settlement is in place.

Already for the month of  August  new   foreclosure  “starts” has been up and hit a record highs according to the Mortgage Bankers Association.

References:

Money.CNN.com
Real Estate. AOL.com
Money.CNN.com
Housing Wire.com
Bloomberg.com
Nolo.com

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