Recently, four large mortgage lenders, PNC Financial Services Group, Bank of America, J P Morgan Chase, and Ally (formerly GMAC) suspended the processing of real estate foreclosures in 23 judicial foreclosure states due to concerns that they were not being processed according to state laws. And while Minnesota is NOT one of those 23 "judicial foreclosure" states, one of the servicers, Bank of America has "extended it's review" of it's foreclosures procedures in all 50 states.
The 23 states judicial foreclosure states are: Connecticut, Delaware, Florida, Hawaii, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Nebraska, New Jersey, New Mexico, New York, North Dakota, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota, Vermont and Wisconsin.
Foreclosure process in Minnesota, Part 1
Foreclosure process in Minnesota, Part 2
Foreclosure process in Minnesota, Part 3
Consumer groups, fair housing groups, federal, state, and local elected officials raised concerns about the validity ownership of mortgages that have been resold over time, in some cases, multiple times.
The problems revolve around procedures at Mortgage Electronic Registration Systems (MERS) which is a company that is responsible for electronically tracking the transfer of assignment of mortgages when they are sold from one lender/servicer to another. Class-action law suits have been filed against MERS for their system which circumvents state laws in many cases.
In recent press releases, both Fannie Mae and Freddie Mac raised concerns regarding compliance with foreclosure processing of their insured loans and stated that servicers must comply with all state laws governing foreclosures.
Although most of the foreclosures in question will eventually be fixed, the current state of limbo is likely to hinder the recovery of the housing and mortgage markets. Many pending home sales have been delayed or cancelled. This will also make it more difficult to resolve issues and sell properties with known title problems. However, this situation may provide a "silver lining" for some homeowners as mortgage servicers will be more receptive to approving loan modifications and short sales because they avoid the problems associated with the foreclosure process altogether. What does this mean for those who are looking for homes for sale in Minnesota? Short sales and loan modificaitons are more likely to be approved as servicers struggle to show a profit and keep stockholders happy. Foreclosures in Minnesota will continue to be processed, but they will be given more scutiny and take a little longer to process than in the past as servicers double-check to ensure that their procedures and systems comply with state laws. Foreclosures Halted in 23 States How to Avoid Foreclosure, Part 1 How to Avoid Foreclosure, Part 2 How to Avoid Foreclosure, Part 3 Send via email to friends and family! 
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