Foreclosure Mills Temporarily on Hold
First it was GMAC (owned by Ally Financial), then it was JPMorgan Chase & Co and today it is Bank of America announcing the suspension of foreclosures due to documentation problems during the judicial foreclosure process.
From the Wall Street Journal:
Bank of America Suspends Foreclosures – WSJ – Robbie Whelan – 10/01/2010
Bank of America Corp. has suspended all foreclosure proceedings in 23 states starting Friday, the latest bank to stall the process amid documentation problems across the country.
The Charlotte, N.C., lender doesn’t know how many foreclosures this move could affect, a spokesman said. The bank wouldn’t say whether it suspected any errors in its documents.
“The assessment is not yet complete,” the spokesman said via email.
Note… the 23 States are not listed but they are states where foreclosures are handled through the courts, AKA Judicial States. Nevada is primarily a Non-Judicial state. (See Difference at the end of this article.)
Two “Robo Signers” admitted in court of signing off authorizations to foreclose without reviewing loan documents. One admitted to 10,000 a month and the other admitted to signing off on around 18,000 in one month.
I think it’s safe to say that there is no chance any one person could honestly handle more then 500 loan document reviews a month without cutting corners. Signing Affidavits stating that they were when you did over 10,000 in one month is pretty ludicrous in my opinion and I’m surprised it took this long for somebody to catch on.
Analysts weigh in on GMAC’s Foreclosure Snafu – DSNEWS.com – Carrie Bay 09/28/10
Last week, GMAC Mortgage’s parent company, Ally Financial, called for a halt on residential foreclosures and a suspension of REO sales in 23 judicial states that may have been impacted by what the company said was a glitch in its internal procedures.
Pay particular attention to the Analysts predictions concerning the slow down of the foreclosure process, higher costs involved and REO inventory being delayed from hitting the market. Certainly a VERY good indication that working on beefing up those short sale departments and avoiding foreclosures in the first place is the way to go.
On the flip side, look for tens if not hundreds of thousands of homeowners living in homes for free for a significantly longer amount of time, delaying the inevitable because of a Snafu. An uncontested foreclosure in a judicial state such as Illinois can easily take over 7 months during normal times and these certainly are not normal times.
Once again… this is in Judicial Foreclosure States but non-judicial foreclosure states may take notice.
JPMorgan Suspending Foreclosures – The New York Times – David Streitfeld – 09/29/10
In a sign that the entire foreclosure process is coming under pressure, a second major mortgage lender said that it was suspending court cases against defaulting homeowners so it could review its legal procedures.
Note the comment from the Florida Real Estate agent at the end of the article who is not paying the mortgage on their rental property.
Now that the lender has withdrawn the affidavit in her case, she was determined to press every advantage.
“I think they should have to answer for this,” she said.
Interesting…
Once again… I want to reiterate that so far these suspensions are in what we call Judicial States where foreclosures are handled in a court of law.
Judicial foreclosures are processed through the courts, beginning with the lender filing a complaint and recording a notice of Lis Pendens. The complaint will state what the debt is, and why the default should allow the lender to foreclose and take the property given as security for the loan.
Non Judicial Foreclosures -
Non-judicial foreclosures are processed without court intervention, with the requirements for the foreclosure established by state statutes. When a loan default occurs, the homeowner will be mailed a default letter, and in many states, a Notice of Default will be recorded at approximately the same time. If the homeowner does not cure the default, a Notice of Sale will be mailed to the homeowner, posted in public places, recorded at the county recorder’s office, and published in area legal publications. After the legally required time period has expired, a public auction will be held, with the highest bidder becoming the owner of the property, subject to their receipt and recordation of the deed. Auctions of non-judicial foreclosures will generally require cash, or cash equivalent either at the sale, or very shortly thereafter.
NEVADA is PRIMARILY a Non Judicial Foreclosure State so Please do not Read this Article and referenced articles thinking that because your Nevada home loan is serviced by GMAC, JPMorganChase or Bank of America that you have nothing to worry about right now and it’s all going to go away like a bad dream.
If you are a Las Vegas area homeowner and have stopped making your mortgage payments and confused on what to do, contact me to see if a Las Vegas short sale is the right alternative for you.
Paul Francis, CRS
Prudential Americana Group – REALTORS
Las Vegas Short Sales
702.592.3058
