A lot of concern has been seen lately about the recent Foreclosure Freeze that has been implemented by some of the larger lenders across the nation.
Here is what the North Carolina Association of Realtors has to say about it:
In response to recent queries about banks temporarily halting foreclosures to investigate improper procedures, NAR issued the following item. Please keep in mind that banks are unilaterally doing this nationwide. There is no federal policy involved.
In September and October 2010, several lenders suspended foreclosures in two dozen states due to questions about whether foreclosures were being processed consistent with applicable state law requirements. Concerns are being raised by state and federal elected officials, as well as consumer and fair housing groups, about the validity of ownership of mortgages that have been securitized and resold. At the center of the controversy is Mortgage Electronic Registration Systems (MERS). This firm is responsible for electronically tracking the transfer of assignment of mortgages. Class-action suits are being brought against MERS alleging that the use of the system circumvents state laws.
On October 1, 2010, Fannie Mae and Freddie Mac released statements regarding servicer compliance with foreclosure processing of Fannie and Freddie loans. In the releases, both organizations reiterated that servicers must comply with applicable state laws governing foreclosures. Although nearly all of the foreclosures in question are expected to be fixed eventually, the current situation is creating difficulties and a new hurdle to the recovery of the housing and mortgage markets. NAR members are reporting that upcoming sales have been delayed indefinitely or cancelled, to the detriment of all involved. Additionally, homes on the market without clear title will make sales much more difficult. While banking executives focus their attention on this problem, it is possible that servicers may be somewhat more receptive to approving loan modifications and short sales, since they avoid the foreclosure procedural problems altogether.
"This is a national issue that centers on whether lenders and loan services have complied with procedural requirements," says N.C. Association of REALTORS' Director of Government Affairs Rick Zechini. "Lenders Bank of America, PNC, JPMorgan Chase and GMAC, along with mortgage servicer Litton Loan Servicing, have announced that they will freeze foreclosures. Sen. Christopher Dodd, D-Conn, the chairman of the Senate Banking Committee, said he would hold a hearing on the issue next month. Here in North Carolina, NC Attorney General Roy Cooper has asked a total of 14 lenders to stop foreclosures until they confirm that their procedures are in compliance."
NAR has developed the following talking points that can be used when responding to queries:
-There's no way of knowing what percentage of foreclosures that were improperly processed were, in fact, inappropriate or wrongly taken. The assumption is that for most of them, this may be only a technicality and that the property ultimately would have been repossessed.
-For owners who believe their home was wrongly foreclosed, they may wish to contact a real estate attorney to investigate the possibility of a property claim. However, that could prove costly and time consuming - regulations vary by state.
-For banks, it may make sense to modify loans or agree to short sales to expedite disposal of inventory.
-For buyers, the assumption is that listed foreclosures come with clear property title but they should discuss any necessary contract contingency with their attorney. Foreclosures in limbo are likely to be withdrawn from the market.
-It's too early to tell if there's an impact on the market but we will be monitoring the situation. Information Courtesy of: North Carolina Association of Realtors
For a direct link to their website and this article please CLICK HERE