Foreclosures and Real Estate Market Stuck in Limbo
Real Estate market is far from recovering as foreclosure properties are in indeterminate state. Statistics in October depict that sales of homes fell by 2.2 percent compared to earlier month. According to National Association of Realtors, currently 10.5 months of inventory is pending as per October figures. After much overvaluation, the house prices and interest rates are at an all time low. Even though houses are cheap and decent number of population can afford closing on a house, there are several snags. If someone is willing to buy a house, fewer lenders are willing to take the risk.
Explanation for this lies in stagnant foreclosed properties and issues related to it like increasing unemployment rate and ambiguity related to Real Estate recovery. Recent documents scam has put everything and everyone related to foreclosures in a spin. Due to paperwork issues, moratorium was issued in several states in the country. It took almost two months to investigate into the problem. The repercussions are delay in the overall process, added inventory, growing monetary costs for the lender, below average interest rates and home prices. Rectifying and streamlining all procedures may take another four to five months.
In a recent report, mortgage giants Fannie Mae and Freddie Mac asked lenders to resume foreclosures with immediate effect. However, considering the time taken to re-file overwhelming number of cases in the court and rationalize internal processes to avoid future hitches puts an uncertainty mark on how soon the orders from the mortgage giants could be pressed into action. About 230,000 cases are to be re-filed in the various states that require a court approval. Lately, Ally Financial mentioned they were able to file only about half of their 25,000 erroneously processed cases until date.
JP Morgan & Chase had confirmed in a recent report that they would start re-filing their pending foreclosure cases by November. Similarly, Bank of America was supposed to re-file about 102000 cases by November too, but, in both cases, it didn’t materialize yet. When Bank of America was asked to comment on the delay, an executive blurted a blunt answer “We will be opening the valve soon.” According to another Bank of America employee, reason for the delay is being overcautious with reviewing and re-filing of documents and working closely with newly hired law firms to make sure all procedures are followed correctly. However, no affirmative answers were provided as to when the foreclosure process will restart in full swing.
Source: Original post: http://www.mostlyforeclosures.com/blog/foreclosures-and-real-estate-market-stuck-in-limbo.html on MostlyForeclosures.com, your source of foreclosed homes.
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