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Smoke is causing FIRE

By
Real Estate Agent with Client First, Realtors - Canton, MI

As the media discusses whether or not there should be a foreclosure moratorium, Rome is burning. Much has been made in the past couple of weeks about robo-signers, and the potential problems of foreclosure in some states. While there is some smoke that some banks have cut corners in the judicial process, there are no claims that I know of that the homes were wrongly foreclosed on for non-payment. The only claims I know of that have been made to date are whether or not the bank employee fully reviewed all documents before signing a court affidavit.

Now, not fully reviewing all documents prior to signing that you have is serious, it does not change much. The concern of course is that the bank that is foreclosing on the property, may not be in fact the title holder of the property... but another bank is. Chain of Title is a serious issue, but it does not erase the fact that the home was foreclosed on for non-payment. Like I said earlier... there is some smoke that there is an administrative problem at some banks in their foreclosure procedures... and this smoke is causing FIRE!

Today, a client who has been looking at Bank Owned and Short Sale homes called me very concerned with the media reports about the foreclosure issues that some banks are having. This buyers concern is causing them to stop looking at homes for now. They are concerned that if they buy a Bank Owned home, they could find themselves one day facing a knock at the door asking them to move out because the bank that sold them the home did not rightly own it.

As much as I tried to explain that this could not happen, because we live in a state that forecloses on by Advertisement and not Judicial Review, that a Title Search and Title Insurance policy would cover such an incident, and that even if it was determined that another bank had title to a property they would not want the property back but would seek compensation from the foreclosing party. None of my persuasive explanations would bring comfort during this conversation.

So, Media please report accurately. Washington please bring closure to this issue quickly. NAR Please inform the publc.... before this fire engulfs any new life in this real estate marktet that have sprout recently.

 

When you choose Scott Petersen and The Petersen Team to handle your Canton/Plymouth real estate needs, you choose a  Realtor® who is not just an expert, but someone who really cares about you and your family. Buying or selling a home can be a very exciting and yet stressful. We will work to achieve your goals and objectives, bringing our years of industry expertise and old fashioned "blue collar" hard work. In this difficult market, we are proven producers selling in the multi-million dollar range year after year.

 We are very familiar with today's market and specializing in Short Sales, REO, Bank Owned, and all types of real estate in  Wayne County , Oakland CountyLivingston County, and Washetenaw County we specialize in Canton,   Plymouth, Northville, Livonia and Novi.

Scott A. Petersen
Remerica Country Place

www.scott-petersen.com
spete05@gmail.com

Posted by

Scott A. Petersen
Client First, Realtors

www.scott-petersen.com

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John Mulkey
TheHousingGuru.com - Waleska, GA
Housing Guru

Scott - This is more serious than just an issue of how the paperwork has been handled. I have at least 50 recent articles on this topic outlining some pretty serious problems with the potential to cloud titles on thousands of properties.  Even some of the title companies have backed away from insuring foreclosures. There are already numerous lawsuits including some class-action ones of significance.  And of course most states' attorneys general are looking into the matter.  I don't think this problem will go away quickly or quietly.

Oct 18, 2010 02:55 PM
Scott Petersen
Client First, Realtors - Canton, MI - Canton, MI

@ John: Lawyers filing lawsuits... Politically elected AG's investigating in a political season... who would have thought.

There may be some accusations of chain of title... but this does not change 90% of the material facts that these homes are in default and the former owner (mortgagor) does not have standing to overturn their foreclosures for non-payment. The lawyers that are contesting the foreclosures are simply delaying the inevitable on a technicality. With all of the slick packaging and bundling of the mortgage back securities, it must be a difficult task to establish who the true owner of the debt is. While it is difficult it is not impossible. As soon as the chain of title can be established the foreclosure will resume.

Now Banks have the responsibility to file correct documentation for their legal proceedings.. and I believe they will correct these past wrongs. BOA just announced that they are refiling 35-40k foreclosures with corrected documentation.   I do not believe that buyers of REO properties run the risk of purchasing a home that they will find several months down the road the seller did not own in the first place.

I agree with you that Title insurers are taking most of the risk. As long as we are recommending that our buyers purchase a  Gold Eagle or Title Policy without exceptions, there is little risk to the Buyer for a Title that is found to have issues later. I spoke to two of my Title Companies that I deal with this week.. and they are continuing to write policies on REO's. As long as they are issuing policies.. I am recommending to my Buyers to buy.

Oct 19, 2010 02:49 AM