Foreclosures slow down as banks come under scrutiny
Foreclosures slow down as banks come under scrutiny
Banks are slowing down on their foreclosures as they come under heightened scrutiny due to allegations of improper foreclosures and irregular paperwork signing. Courts are now seeing an almost 75% drop in court cases, which usually number around 200 cases a day, but has since dropped to 50 a day after state inquiries are conducted to investigate state law violations.
Banks and lenders have been under fire lately for not following proper and legal procedures in thousands of home foreclosures. State attorneys have been warning mortgage companies to follow state laws and regulations strictly after revelations that banks and loan servicers are speeding up the foreclosure process through forged signatures and other irregularities in the paperwork have surfaced.
The state probe into these defective paperworks is seen to be at least partly responsible for a number of foreclosures halt. There has been a remarkable decrease in the number of cases and homes being scheduled for foreclosures and auctions at least for the last month. In Lee County, Fla., circuit courts report that just three weeks ago, 402 out of 578 scheduled foreclosures were canceled which ups the ratio to 2 out of 3 from the typical 1 out of 3 foreclosure rate.
Big mortgage firms are also following the banks' lead in suspending foreclosure sales in some states and have even made efforts to review documents and refile some of them.
Loan servicers and lenders are required to verify foreclosure documents and that homeowners sign the affidavits in a notary public. But there were claims that banks expedited the process by having robo-signers sign on thousands of affidavits.
Ally Financial's GMAC mortgage is now reviewing their foreclosure standards and relevant guidelines in an effort to curb the anomalous practice. It has also suspended foreclosure operations in at least 23 states and has made efforts to correct and review each foreclosure case.
Meanwhile, Bank of America is preparing to refile 102,000 foreclosure affidavits in 23 states that require court approvals, but the rest of the 27 states would have to wait until it completes its review process.
