A short sale client of mine in Port Orange, Florida has been hearing and reading the headlines about major lenders halting their foreclosures. Well, two of them GMAC and Bank of America have started the process back up again. GMAC took a respite that started 2 months ago. BofA is estimating only a few more weeks until they are up and running.
The issue was that some of the legal documents had not been processed properly and claims had not been verified. Some claim this is a "fraud against the court" and may invalidate huge numbers of foreclosures. Maybe so. But this will likely not effect anyone who is in foreclosure right now. Yes, the attorneys general of many states, if not all, are calling for some sort of action that may slow things. But rest assured, doing nothing is a foolish choice.
Whatever problems exist with the foreclosure processes will be fixed. If you delay action now, there will likely be a larger judgment against you due to increased holding costs, missed payments, and a further depreciated asset.
I advised this customer that to wait and see what happens is not the right thing to do or the wise thing to do. Yes, it is great living rent free but there is always a price to pay in the end.
The government corruption and greed that got us here will take a long time to overcome. But delaying the process of getting all of these properties sold will only lengthen the effects and further harm our gravely injured economy. Everyone involved in real estate - lenders, owners, PMI, investors, and Realtors need to move forward as quickly as possible. The courts need to be more careful as well as the attorneys - but getting the feds involved is how this started, and we do not need heavy involvement again.
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