Does this surprise anyone else? After the huge announcement from GMAC Financial about a week ago that they would stopping foreclosure in 23 state, and counting, amid concerns that employees signed affidavits about loan documents without personally verifying the files.
JP Morgan Chase has halted about 50,000 legal foreclosure procedures siting similar concerns as GMAC. This could seriously affect the foreclosure process depending on what the review discovers. In addition the basic halt of foreclosures by this two massive financial institutions, how will this affect the so called "shadow inventory" from coming to market? I'm an agent in San Diego, California and unfortunately my state isn't on the list of states where GMAC is going to halt foreclosures. But this doesn't mean that some of my fellow AR members in other states can't benefit from this news not to mention their clients.
Following is a table of the affected states.
Connecticut Florida Hawaii Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Nebraska New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Pennsylvania South Carolina South Dakota Vermont Wisconsin
More than likely California isn't on this list due to the use of Deeds of Trust that don't fall into judicial foreclosure. Furthermore, there's no guarantee that the foreclosure process will reemerge in a better version after all is said and done but for the moment some homeowners will benefit from this suspension in proceedings. Also, if it's proved that proper reviews weren't done on foreclosure files it will open the questioning of thousands of previous foreclosures. This stoppagewill impact real estate in the 4th quarter and possibly into 1st & 2nd quarters of next year. I'll try and get an update out as soon as I can get some more information but for now all we can do is wait and see.
I leave you with these questions... Will this suspension of foreclosures impact your local real estate market positively or negatively? How will affect the national market? And what sort of legal ramifications will come about as a result of these internal reviews for banks and consumers? I look forward to every ones answers.
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