subject: Current Situation Of Foreclosure Crisis And Its Impact In Late 2011 [print this page] The crisis of foreclosure properties, which occupied Centre stage in much of 2010, is expected to be resolved only far into 2011.
A company which keeps track of foreclosure trends noted that the foreclosure count declined by 21% from October to November last year. According to the Tribune group of newspapers, the decline is due to the announcement by major lenders that they would freeze foreclosures till they conduct a satisfactory review of foreclosure procedures internally so that they are abiding by the law.
The robo-signing scandal and allegations of malpractice broke out mainly against large servicers which are financial institutions that make agreements with the original lenders for collecting mortgage payments. In places like Arkansas, majority of mortgages are locally serviced. This means that the right of collecting payments rests with the bank where a homeowner takes a mortgage.
But the point to note is that servicers in the issue have undertaken measures for protection of rights of consumers in response to the commotion over faulty paperwork as well as other issues. Such improvements inspired Fannie Mae and Freddie Mac, which are the government sponsored agencies that underwrite bulk of mortgages in the nation, to advise lenders to resume foreclosures by November end in 2010.
However, one group is still probing the scandal. A national task force, consisting of regulators with the Department of Housing and Urban Development (HUD), The Federal Trade Commission, US Department of Justice as well as a team of attorneys general of 50 states, began conducting a probe in October into foreclosure practices. Their main concern was with actions that were taken when borrowers defaulted on mortgage payments. Lenders are required to give a chance to homeowners to start plans to get current with their mortgage payments so that they can avoid foreclosures and get a chance to retain their homes
According to the Tribune, the task force is still conducting their investigation and it is expected that they will reveal their findings in this year. Not many are ready to speculate on the contents of their findings, but all agree that the findings will have an impact on whether the foreclosures will resume without a pause or whether there is need to correct faulty procedures and lenders need to further adjust their foreclosures processes.
One group that has been hurt by the foreclosure scandal are investors who have made agreements to purchase homes, but cannot close the deals until lenders are convinced of finalizing such sales. Clearing up the foreclosure mess will certainly aid economic recovery. To homeowners must be offered chances of loan modification and the help to retain their homes. At the same time, investors waiting to buy foreclosures must be allowed to complete their transactions.
