The continuous injection of cheap foreclosure homes into the housing market of Houston, Texas is expected to slowdown as several mortgage servicers opted to halt foreclosures in the area. The decision came after Bank of America released a statement that it has temporarily stopped foreclosures in several areas of the U.S.
Mortgage firm Litton Loan Servicing is one of the local servicers that announced its decision to put foreclosures on hold while it re-evaluates documents related to these residential properties. Litton is joined by another local firm, Stewart Title, which has announced that it has temporarily halted the sale of Houston foreclosure homes, TX.
Despite the good intentions behind the move, some real estate-related businesses have stated that halting proceedings of foreclosed homes in Texas will not help and will only make things worse for troubled homeowners. According to officials from other mortgage firms, the moratorium will only delay an inevitable situation.
The good thing that some mortgage professionals see in holding off the unloading of foreclosure houses for sale is that most troubled families will likely get a chance to spend the holidays in their own houses. This, according to them, will be some consolation.
The halt will also delay the entry of cheap foreclosure homes into the housing market which is often blamed for the decline of property values in the Houston residential industry. Mortgage professionals have stated that the issue regarding the validity of foreclosure documents has put the whole mortgage industry in a bad light.
According to mortgage servicers, the controversy started during the housing crisis when a huge number of mortgage loans were taken out. Banks and lenders were unable to cope with the paperwork needed for the hundreds of thousands of loan applications. Servicers have added that for those who were not hit directly by the foreclosure problem, the issue will eventually affect them in the future.
Housing analysts have stated that home prices will decline further in six months or right after the documents issue is sorted out. They stated that cheap foreclosure homes will then flood the market in huge numbers and prices will be dragged down worse than before. They further added that the scenario will probably be good for buyers, but for sellers and the overall housing market, that kind of situation will not be positive.