subject: Weak Economy and Increasing Foreclosures [print this page] Weak Economy and Increasing Foreclosures Weak Economy and Increasing Foreclosures
The Republicans in the US have won a thumping victory. The Democrats failed miserably in the House of Representatives. Experts observe that the deteriorating economic health of the nation and the poor real estate scenario, including the rise in the number of foreclosures, are the main reasons behind this debacle.
It may be pointed out here that the US economy has been on a roller coaster ride for quite a while now. Unemployment is at its peak. As people lose jobs, even those with excellent credit scores are faltering on mortgage payments. Hence, foreclosures have peaked.
The Federal government had come up with a program by which loans of homeowners are being modified, first on a temporary basis, and then permanently. The program picked off on a slow pitch. Now it has picked up pace. However, a scandal has recently rocked the market.
Attorney generals of states say that banks had signed documents without verifying them properly. Hence, major lenders were asked to halt foreclosures totally. It also happened that servicers, who were supposed to hand over mortgage documents, did not do them personally. Many people lost their homes even though they did not have the right documents in hand.
MetLife Inc. said that it has not caused any harm to homeowners. The New York insurer said, "MetLife Bank verifies the accuracy of borrower information included in affidavits filed in foreclosure proceedings. We do not believe that MetLife Bank has material exposure to potential losses arising from challenges to its foreclosure procedures."
In whatever foreclosure proceedings, it has found any irregularity the lender has delayed the sale. In other words, it has followed the practices of some top US lenders like Bank of America and JP Morgan Chase. The two other lenders had already stalled foreclosures in some US states. Even President Obama has asked attorneys general to conduct a proper investigation behind the reasons for this.
It may be noted that MetLife has been the owner of a bank for a decade. This was revealed by William Wheeler, who is the CFO. There were two acquisitions two years ago. That included First Horizon's First Tennessee National Bank Association. Subsequently, the number of heads increased to 3,764. Even in '07, the head count was only 82. This was revealed by Federal Deposit Insurance Corp data. Experts observe that the situation will not improve till more jobs are created.
