Home Foreclosure News: Banks Halt Foreclosures in All 50 States
Unless you’ve been under a rock the last few days, you’ve probably heard about major banks halting foreclosures in all 50 states (ie, Bank of America and a few others). Why are banks stopping foreclosure proceedings?
As one article puts it, it’s a a “technical” paperwork problem with . . . mortgages with improper documentation.”
Basically, because there are so many foreclosures happening now and in the recent past, banks have been accused of illegally foreclosing on properties by not having all of their paperwork t’s dotted and i’s crossed (eg, not using a notary).
While many believe that many of these foreclosures will eventually happen anyway, some banks are trying to get ahead of possible legal actions many might bring and get their houses in order before proceeding with any more forelosures.
After all, many homeowners have simply abandoned their properties and would have faced foreclosure anyway. As the article linked to above states:
The average borrower that Chase has foreclosed on, these people added, has not made a payment on the mortgage for about one and a half years — a figure that they say is also consistent with the industry.
What Does this Halt on Foreclosures Mean for the Average Homeowner?
It means that many may have a chance to save their homes. One homeowner who wrote in to this blog said that she’d actually gotten permanent modification. Her mortgage payments were reduced from $1,578 per month to just over $900. And her new interrest rate? An eye-popping 2%.
But, it wasn’t all roses. Her mortgage was extended by 10 years — from a 30 to a 40 year. The main thing is though, she said, that she could keep her home and her payments were made affordable.
For others who might not be able to stop foreclosure or get a permanent home loan modification, it may mean financial “breathing room.” Many who find themselves in this type of limbo are not making mortgage payments and/or had stopped before this whole thing happened. Homeowners like this may be squirreling away cash to weather what is possibly going to be a move in a few months.
So it can be good or bad news; it all depends on which side of the home foreclosure equation you’re on.
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