Freeing Foreclosures 1


As many may have heard, many major lenders are freezing foreclosures.  Current sellers may benefit in the short-term from fewer foreclosures on the market, which account for large percentage of transactions currently.  RealtyTrac estimates that distressed sales account for a third of the residential real estate market, and depressing home prices by about 26%.

Many sellers have seen how a high number of distressed sales could affect their transaction, especially during an appraisal when there are a nominal number of resales which may not be direct comparables, too old, or located too far to be used.

This benefit may be short-lived however.  Banks will address “robo-signers” which is at the heart of the matter.  The term has been recently used to refer to employees of lenders’ employees who signed off on court / foreclosure documents without reading them first (the term refers to how employees automatically sign the large number of documents automatically, like a robot).

Mr. Cordray, of Ohio, last week became the first attorney general to sue a mortgage servicer, when he filed suit against GMAC Mortgage LLC. The suit also named as a defendant GMAC employee Jeffrey Stephan, an alleged “robo-signer.”

Once lenders have resolved these issues, foreclosures could start coming back to market, making the benefit for resales short-lived.  As we approach the winter, the benefit altogether could be altogether diminished by the historically slower winter months.

Some attorney generals hope to address the issue of beyond robo-signers, and prevent foreclosure when homeowners are in the modification process.

See the full statistics.

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Sherwin L. Sucaldito, REALTOR®
@properties
Member of The Institute of Luxury Home Marketing
Member of the Real Estate Buyer’s Agency Council, ABR
Certified Residential Property Manager, CRPM

Creative Commons LicenseFreeing Foreclosures” by Sherwin Sucaldito is licensed under a Creative Commons Attribution-No Derivative Works 3.0 United States License.

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