Foreclosure Reviews: Navigating the Upheaval

Given the daily headlines on the foreclosure freeze it’s easy to lose sight of that fact that most lenders are not putting a halt to their foreclosure processing. Earlier this week I sat down with my colleagues Jeff LIscher, NAR’s managing director of regulatory policy, and Paul Bishop, NAR’s vice president of research, to get their take on what’s happening with the foreclosure freeze. (See the video.)



Jeff’s first point was that there are thousands of lenders and only a handful are freezing their foreclosures while they review whether their past foreclosures were handled correctly.

So far, only a few major banks are implementing a moratorium while they conduct their reviews. Bank of America is the biggest. It’s halting foreclosures in all 50 states. J.P. Morgan Chase is halting foreclosures in about half the states. Same thing with GMAC Mortgage. But Wells Fargo, another big lender, isn’t implementing a freeze.

This isn’t to say the problem isn’t big. It appears to be very big. But it’s not all-encompassing, and I think that was Jeff’s point.
Paul reinforced this point by making clear the bulk of foreclosures are concentrated in just a handful of states, with just two, California and Florida, accounting for a third of all foreclosures. And California isn’t a pure judicial foreclosure state. It’s a hybrid in its legal processes for foreclosures.

The fact that California isn’t a pure judicial foreclosure state doesn’t mean we can expect there to be fewer reviews there. Far from it. But it remimds us that this latest crimp in the housing market is as location-specific as the housing market itself. (In a judicial foreclosure state, foreclosures are processed through the courts. Here’s a chart for you to see what the procedures are in your state.)

One thing the conversation with Jeff and Paul made clear is that, if you’re working with a client that’s trying to buy a foreclosed property, your client would do well to talk to an attorney. You just want to make sure your client’s interests are protected if suddenly the bank says it’s taking the home off the market while it reviews the paperwork that was generated when the home was foreclosed upon.

Dorothy Buse, a sales associate in the Orlando area I spoke with two days ago, says she’s had about a quarter of her listings pulled off the market because of these reviews. When this happens, she says, she immediately removes the listing from the MLS. That way there’s no confusion over whether the property is available for sale or not. In about a quarter of these cases, she already has an offer on the property. In these cases, she gives buyers a choice: they can withdraw and get their earnest money deposit back, no questions asked, or they can hold on and wait for the property to come back on the market with the understanding that the timeframe is indefinite. She has no way of knowing how long the property will be off the market.

NAR has written the heads of the U.S. Treasury Department, HUD, and the Federal Housing Finance Agency, which regulates Fannie Mae and Freddie Mac, saying the foreclosure problems give extra impetus to banks to redouble their efforts on loan modifications and short sales. Focusing on these options, NAR says, “will not only minimize losses to the owners of the mortgages, but also minimize harm to homeowners facing unprecedented financial challenges and avoid reversing gains being made towards the recovery of housing markets, especially in high foreclosure areas.”

With foreclosure problems mounting, emphasizing alternatives to foreclosure certainly seems like a win-win for banks and everyone else.

Access the article at: http://tinyurl.com/29du45q
Indianapolis Real Estate

The Fastest-Growing Cities In The U.S. - Indianapolis

Thanks to a business-friendly attitude, inexpensive housing and a strong cultural community, Indianopolis' population--now at 1.7 million--has increased at a rate that is 50% higher than the national average. That's faster than hot spots Washington, D.C., and Seattle, and nearly as fast as urban-planner darlings Portland or Denver. But while Portland and Denver may attract more young singles, Indianapolis boasts a growing population of educated, young married couples--many coming from cities like Chicago for the shorter commutes and lower cost of living--an arguably more attractive demographic since they will most likely stay, raise families and invest in the communities, boosting the area's growth even more.

Read the article at: http://www.forbes.com/
Indianapolis Real Estate

Now is the Time to Buy a New Home!

When supply exceeds demand, buyers have the upper hand–and that’s where we are now! The current supply of homes for sale now stands at 12.5 months, meaning that at today’s pace of home sales, it would take 12 and a half months for the existing inventory to sell.

 

For you as a buyer, this means lots of choices, lots of negotiating power and that smart sellers are fiercely competing for your business, both in terms of the price and the condition of their homes. 

Indianapolis Real Estate

Foreclosure Update

It has been widely reported in the news that several of the large national lenders have stopped foreclosure proceedings in a number of states, including Indiana. This has resulted in some listings being withdrawn from the market and closing delays. MIBOR has been in continued contact with the National Association of REALTORS® Washington Lobbying Office, communicating the concerns of MIBOR members.


Up to this point, the following is what we have learned from NAR who is closest to this situation.

• There’s no way of knowing what percentage of foreclosures that were processed, were inappropriately or wrongly taken. The assumption is that for the most of them, this may only be a technicality and that the property ultimately would have been repossessed.
• For owners who believe that their home was wrongly foreclosed, they may wish to contact a real estate attorney to investigate the possibility of a property claim. However, that could prove costly and time consuming – regulations vary by state.
• For banks, it may make sense to modify loans or agree to short sales to expedite disposal of inventory.
• For buyers, the assumption is that listing foreclosures come with clear property title, but they should discuss any necessary contract contingency with their real estate agent. Foreclosures in limbo are likely to be withdrawn from the market.
• It’s too early to tell if there is an impact on the market, but we will be monitoring the situation.

MIBOR will continue to monitor this situation closely, and will pass on information as it becomes available.
Indianapolis Real Estate

Interest Rates - September 2010

Mortgage rates once again set new record lows in early September and remained below 4.4% throughout the month. As economic activity gains momentum, rates will rise to keep inflation at an acceptable level.

Indianapolis Real Estate

Foreclosures Halted!

The foreclosure mess threatened to become full-blown chaos Friday as the nation's largest bank, Bank of America, halted all foreclosure procedures nationwide, raising the pressure on other lenders to do the same.

Bank of America is the first U.S. bank to institute a nationwide moratorium on foreclosures as anger grows at how lenders have prepared documents to support evictions. The halt on foreclosures will take effect on Saturday and also includes sales of foreclosed property.

Separately, PNC Financial Services Group Inc. is halting most foreclosures and evictions in 23 states for a month so it can review whether documents it submitted to courts complied with state laws.

An official at the Pittsburgh-based bank confirmed the PNC decision, which was reported earlier by the New York Times. The official requested anonymity because the decision hasn't been publicly announced.

The moves come amid mounting political pressure on big U.S. banks to examine foreclosure-documentation problems. Bank of America's decision comes amid revelations that the banking industry had used "robo-signers," people who sign hundreds of documents a day without reviewing their contents, when foreclosing on homes.

In a statement released Friday, Bank of America said it will stop foreclosure sales until “our assessment has been satisfactorily completed. Our ongoing assessment shows the basis for foreclosure decisions is accurate. We continue to serve the interests of our customers, investors and communities. Providing solutions for distressed homeowners remains our primary focus.”

Indianapolis Real Estate

Foreclosure Proceedings Come Under Fire

Mortgage industry heavyweights slow pace of properties entering REO pipeline

In response to the recent “robo-signing scandal,” JP Morgan Chase and Co., put 56,000 foreclosure filings on hold last week, following similar actions by Ally Bank (formerly GMAC Mortgage) in 23 states, including Illinois, Florida, New York and Ohio.

This temporary crackdown on the part of various states attorney generals is due to allegations that tens of thousands of foreclosure documents were essentially “rubber stamped” or signed without adequate review or scrutiny. Among the state officials who have initiated investigations, IllinoisAttorney General Lisa Madigan has demanded a meeting with JPMorgan Chase to address her concerns that the company violated the state's Consumer Fraud Act.

Vowing to hold banks accountable, Madigan said in a recent statement: “With JP Morgan now acknowledging possible abuses in preparing court documents, the impact on homeowners in our state and across the country could be great.”

Despite recent findings “that in some cases employees in our mortgage foreclosure operations may have signed affidavits about loan documents on the basis of file reviews done by other personnel – without the signer personally having reviewed those loan files,” Chase spokesman Tom Kelley, contends, “We believe the accuracy of the factual loan information contained in the affidavits was not affected by whether or not the signer had personal knowledge of the precise details.” He added that Chase has “begun to systematically re-examine documents we have filed in current foreclosure proceedings to verify that the affidavits and other documents meet the standard of personal knowledge or review where that is required.”

Chase has requested that the courts hold off on entering judgments in pending matters for a few weeks until their review process is completed.
Indianapolis Real Estate