What You Must Know About The Bank Foreclosure Scandal
As many of us are aware, many of the largest mortgage providers within the US have announced a suspension of foreclosure proceedings following a number of damaging claims.
These claims state that many banks within the US have been found guilty of forging official documents in an attempt to speed up the foreclosure of many mortgaged properties.
Since 2006, it is rumored that around 6.
4 million homes have been lost due to foreclosure, with an additional 4.
4 million homes in August of this year being listed as being in the foreclosure process.
Although issues with the recent recession heavily affected a number of banks and mortgage providers, it appears that some have taken drastic measures in an attempt to save money and time, resulting in millions of families finding themselves homeless and with a record of bad credit.
On Friday 8th October, it was reported that the Bank of America had halted foreclosures in 50 states within the US, while JP Morgan Chase have opted to halt foreclosure proceedings in just 23 states which equates to around 55,000 foreclosures.
In this case, all remaining foreclosure cases will be subjected to a judicial review before the bank in question is able to foreclose the property.
As JP Morgan is one of the smaller mortgage providers within the US, this startling statistic is just the tip of the iceberg.
Although at a first glance this hold on foreclosures may appear to be a blessing for homeowners who are facing foreclosure, it is sadly not that simple.
The current halt on foreclosures is going to be extremely costly for banks and mortgage providers across the country who will now be required to wait for a prolonged period of time to cease the homes they believed had been removed from their books and signed over to new owners.
However, with these families now stuck in limbo, their purchase for their new home will now either be delayed or cancelled indefinitely while their mortgage provider takes the time to review the documentation which should have been completed previously before the initial foreclosure.
Many mortgage providers are trying to diffuse the situation, claiming that it will just a few weeks for the issue to be resolved, but taking into consideration the reasons for the initial problem, this may not be strictly true.
Firstly, all banks will find that they need to take a considerable amount of time to review each document per foreclosure case and new sale.
This will take a considerable amount of time, calling for each provider to source in new staff members to decrease the overall waiting time but while they look to do so, many mortgage providers may be faced with legal action from mortgage-related investors and homeowners who are trying to force their lender to buy back the home which had previously been foreclosed on.
This will not only result in a major increase in documentation for all banks to complete, further increasing the waiting time for all involved; but will also enable attorneys the opportunity to lengthen the foreclosure process on behalf of their clients.
As many of us are aware, the housing industry has faced one of its lowest times since 2007 following the recession, with more than 30% of all real estate sales coming as a result of foreclosed homes.
However, the recent foreclosure scandal does not just affect those who are facing foreclosure or are in the process of purchasing a recently foreclosed home; but it also greatly affects those who work within the real estate industry.
There are many realtors who may already have sales in place for their clients to purchase a number of recently foreclosed homes.
Due to the halt on foreclosure proceedings by these providers, not only will their clients be unable to proceed with the purchase of their new home, but as the realtor now requires to wait for extra documentation, etc to be completed, their sales could become un-suspended for a great length of time or even cancelled altogether; causing a loss in sales.
This spells bad news for many small time realtors as the recent recession caused many small businesses to dissolve following a loss in profits as house prices crashed.
In short, it is clear to see that the recent foreclosure scam is not something which directly affects those facing foreclosure, but instead acts as a house of cards, affecting everyone who has some part in the buying, selling or dealings of foreclosure properties.
With more decreases in property sales expected until this current situation is resolved, it appears that the after effects of the banks actions are expected to only worsen as they opt to point the finger at who they think is really to blame-their customers.
These claims state that many banks within the US have been found guilty of forging official documents in an attempt to speed up the foreclosure of many mortgaged properties.
Since 2006, it is rumored that around 6.
4 million homes have been lost due to foreclosure, with an additional 4.
4 million homes in August of this year being listed as being in the foreclosure process.
Although issues with the recent recession heavily affected a number of banks and mortgage providers, it appears that some have taken drastic measures in an attempt to save money and time, resulting in millions of families finding themselves homeless and with a record of bad credit.
On Friday 8th October, it was reported that the Bank of America had halted foreclosures in 50 states within the US, while JP Morgan Chase have opted to halt foreclosure proceedings in just 23 states which equates to around 55,000 foreclosures.
In this case, all remaining foreclosure cases will be subjected to a judicial review before the bank in question is able to foreclose the property.
As JP Morgan is one of the smaller mortgage providers within the US, this startling statistic is just the tip of the iceberg.
Although at a first glance this hold on foreclosures may appear to be a blessing for homeowners who are facing foreclosure, it is sadly not that simple.
The current halt on foreclosures is going to be extremely costly for banks and mortgage providers across the country who will now be required to wait for a prolonged period of time to cease the homes they believed had been removed from their books and signed over to new owners.
However, with these families now stuck in limbo, their purchase for their new home will now either be delayed or cancelled indefinitely while their mortgage provider takes the time to review the documentation which should have been completed previously before the initial foreclosure.
Many mortgage providers are trying to diffuse the situation, claiming that it will just a few weeks for the issue to be resolved, but taking into consideration the reasons for the initial problem, this may not be strictly true.
Firstly, all banks will find that they need to take a considerable amount of time to review each document per foreclosure case and new sale.
This will take a considerable amount of time, calling for each provider to source in new staff members to decrease the overall waiting time but while they look to do so, many mortgage providers may be faced with legal action from mortgage-related investors and homeowners who are trying to force their lender to buy back the home which had previously been foreclosed on.
This will not only result in a major increase in documentation for all banks to complete, further increasing the waiting time for all involved; but will also enable attorneys the opportunity to lengthen the foreclosure process on behalf of their clients.
As many of us are aware, the housing industry has faced one of its lowest times since 2007 following the recession, with more than 30% of all real estate sales coming as a result of foreclosed homes.
However, the recent foreclosure scandal does not just affect those who are facing foreclosure or are in the process of purchasing a recently foreclosed home; but it also greatly affects those who work within the real estate industry.
There are many realtors who may already have sales in place for their clients to purchase a number of recently foreclosed homes.
Due to the halt on foreclosure proceedings by these providers, not only will their clients be unable to proceed with the purchase of their new home, but as the realtor now requires to wait for extra documentation, etc to be completed, their sales could become un-suspended for a great length of time or even cancelled altogether; causing a loss in sales.
This spells bad news for many small time realtors as the recent recession caused many small businesses to dissolve following a loss in profits as house prices crashed.
In short, it is clear to see that the recent foreclosure scam is not something which directly affects those facing foreclosure, but instead acts as a house of cards, affecting everyone who has some part in the buying, selling or dealings of foreclosure properties.
With more decreases in property sales expected until this current situation is resolved, it appears that the after effects of the banks actions are expected to only worsen as they opt to point the finger at who they think is really to blame-their customers.
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