If you have been following my other blog (and you should, it is meant to be a resource for you!) at www.tallahasseeforeclosures.blogspot.com, then you will be up-to-date on the recent news regarding several large banks halting their foreclosure proceedings.
In short, GMAC and JPMorgan Chase were the first to issue foreclosure moratoriums, joined shortly thereafter by Bank of America, and then Litton Loan Servicing and PNC Financial followed suit last week.
The revelations about bank employees not properly executing foreclosure documents has caused an outcry amongst the public and politicians alike. Several politicians (Nancy Pelosi, et al) and consumer advocate groups have called for a nationwide moratorium on all foreclosures. However, to do so would cause tremendous upheaval in the real estate market and disrupt a very tenuous recovery (some places, like Tallahassee, have fared better than others, but still have more REO inventory to work through and won't see recovery until we do, so delaying foreclosures is just delaying recovery).
Edward J. DeMarco (acting director of FHFA) says, “Delays in foreclosures add cost and other burdens for communities, investors, and taxpayers. For Enterprise [Fannie Mae and Freddie Mac] loans, delay means that taxpayers must continue to support the Enterprises’ financing of mortgages without the benefit of payment and neighborhoods are left with more vacant properties.”
To read more of Mr. Demarco's comments, click HERE.
The bottom line is that people are being foreclosed upon because they have not paid their mortgages. While we want to encourage banks and all corporate citizens and be responsible and law-abiding, we need to allow them to recoup their investments, liquidate their REO inventory, and get the housing market back to where foreclosures are an exception, not the rule.
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