Nobody is entirely sure what the fallout from the mortgage foreclosure mess will be. The problem is slowing growing wider and appears to be systemic, and could really hurt home sales and home prices in the United States. Today’s New York Times has an article by David Streitfeld and Andrew Martin (“Flawed Foreclosure Documents Thwart Home Sales“) that details some of the issues, I highly recommend reading it. From the article:
With home sales this past summer at the lowest level in more than a decade, real estate is ill-prepared to suffer another blow. But as a scandal unfolds over mortgage lenders’ shoddy preparation of foreclosure documents, the fallout is beginning to hammer the housing market, especially in states like Florida where distressed properties are abundant.
“This crisis takes a situation that’s already bad and kind of cements it into place,” said Joshua Shapiro, chief United States economist for MFR Inc., an economic consulting firm.
JP Morgan Chase, Bank of America, and GMAC/Ally are the three major mortgage servicers that have suspended foreclosures in 23 judicial foreclosure states in order to look into problems with their foreclosure practices. As a result, Fannie Mae is pulling many foreclosed homes off the market for fear they were improperly foreclosed upon. Further, some large title companies are no longer offering title insurance on properties foreclosed upon by these lenders, effectively rendering them unsellable, as lenders will generally not finance a property lacking title insurance.
Issues with clouded titles and improper foreclosure documentation threaten to completely upset the market for foreclosed homes. Fannie Mae is currently putting 30 to 90 day freezes on the sales of many foreclosed properties and a cavalcade of attorney generals and legislators are calling for investigations into foreclosure practices that will further paralyze the market.
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Debby Bodine
October 22, 2010 @ 12:26 pm
We already have a mortgage with GMAC/Ally and we truly need to refinance it. Please, I am begging to see if you could help. Thanks.
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