Banks Expanding Haults On Foreclosures

Three of the largest mortgage lenders have announced that they are halting foreclosures in the 23 states that go through the judicial process of foreclosure and require a judge's signature in to complete the foreclosure.  In the other 27 states, foreclosures were continuing as normal. 

On Friday, Bank of America announced that were expanding their hold on foreclosures to all 50 states and today (Monday) Chase announced that they were also expanding their review to include states that do not require a judicial foreclosure.

The 23 original states affected were:

1. Connecticut
2. Delaware
3. Florida
4. Illinois
5. Indiana
6. Iowa
7. Kansas
8. Kentucky
9. Louisiana
10. Maine
11. Maryland
12. Massachusetts
13. New Jersey
14. New Mexico
15. New York
16. North Dakota
17. Ohio
18. Oklahoma
19. Pennsylvania
20. South Carolina
21. South Dakota
22. Vermont
23. Wisconsin

While the banks have announced they are halting foreclosures, they will continue with the foreclosure process during the review process.  The purpose of their review is to make sure they were in compliance with all document reviews required for foreclosure.

The initial review was announced after the lender discovered that its employees may have signed affidavits on the basis of reviews done by other personnel.

"We have been assessing our existing processes," Bank of America said in a statement. "To be certain affidavits have followed the correct procedures, Bank of America will delay the process in order to amend all affidavits in foreclosure cases that have not yet gone to judgment in the 23 states where courts have jurisdiction over foreclosures."

Not all banks have halted their foreclosures.  Citigroup, a big player in mortgage lending said it is making no changes in its foreclosure procedures. "At this point, we have no reason to believe our employees haven't been following our procedures, so we do not believe a suspension is necessary," spokesman Mark Rodgers said in an e-mailed statement.

In addition to putting a halt on all pending foreclosures, the big 3 have also put a halt on any pending sales of properties they have already foreclosed on.  They are waving off Fannie Mae from selling any of the foreclosed homes whose loans they sold to Fannie. PNC Financial Services Group also announced that they are suspending sales of foreclosed homes on Friday,

How is this going to affect short sales?  We're not sure yet, but feel that if the banks know that they are going to have an indefinite freeze on all foreclosures, it will give them extra motivation to get the short sales approved and off of their books. 

If you have any questions regarding a short sale or foreclosure, please do not hesitate to contact our team. We specialize in San Diego Short Sales and Orange County Short Sales.