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October 7th, 2010 6:21 AM by David W. Welch
By now you may have heard the three large lenders; Bank of America, JP Morgan Chase, and GMAC Ally have put foreclosures on hold in 23 states. Apparently, my concern that the banks really do not have any idea what they are doing is justified. Bank executives from these organizations have admitted to signing thousands of documents each month without actually making sure that appropriate procedures were followed. The only reason they have put foreclosures on hold in 23 of the 50 states is because of the courts. You see 27 states allow the foreclosure process to go forward without going through the courts. The other 23, Florida included, require foreclosures to ultimately be approved by a judge. I am not arguing for or against the merits of using the courts just stating a fact.
The banks have not been forced to stop foreclosures in these states, but put them on hold themselves until they can figure out how big their mess is. It is possible that many if not most of the foreclosures were completed correctly. They just have to be able to prove they did things correctly, because at some point they may have to prove it in court. The result of this is uncertain. I have heard estimates this will take anywhere from 60 days to six months. I have heard they are asking the REO agents to pull listings temporarily off the market. Because these are three very large banks, I expect we could see a noticible drop in bank owned properties here in Orlando. Depending on how long this takes, I am also hoping to see an increase in the number of short sales approved by these banks. I do have one customer who has had a contract on a Bank of America short sale for over 15 months that has suddenly come to life. Now, after all this time they are ready to issue an approval and close this file. I will be keeping a close eye on this over the next several weeks.
David Welch Real Estate Optimist, Orlando Real Estate, Any Home-Any Phone