The latest confusing foreclosure news
At the end of November, Fannie Mae and Freddie Mac – the government-sponsored enterprises which underwrite the bulk of mortgages in the United States – told real estate agents to resume with sales of foreclosed properties. That was a significant announcement as Fannie and Freddie had about 240,000 properties set for foreclosure at the end of September.
Concerns over the adequacy of paperwork filed in foreclosure actions, however, caused Fannie and Freddie to order a halt to those proceedings a couple of months ago. The so-called “robo signing” controversy had to do with questions about whether servicers foreclosing on homes could establish that loans were properly transferred to them by the initial lenders in the first place. That put the brakes on foreclosure actions, of course, which had been a booming industry.
Both nationally and here in Arkansas, homes sales were down in October. The National Association of Realtors blamed part of the decline in sales on the foreclosure moratorium. The foreclosure market was hot, but the moratorium cooled it considerably seeing how a good number of those homes couldn’t be sold.
Actually, there were a number of factors that led to an overall moratorium. Major mortgage servicers such as Bank of America called a halt to foreclosures until they could review paperwork in order to determine if proper documents were filed in those cases.
Meanwhile, a national task force formed as state and federal governments were concerned that people were being improperly tossed out of their homes. The task force is made up of regulators from the Federal Trade Commission, Department of Housing and Urban Development and the Department of Justice. Attorneys general from all 50 states and bank regulators are also taking part in the task force, which is expected to release a report on foreclosure practices in January.
So, we’ve still got the aforementioned task force investigating foreclosures and most of the major servicers are still reviewing their processes. In other words, the announcement from Fannie and Freddie suggests that steps are being taken toward getting the foreclosure market going again – a move that would boost housing markets and thin out some of the inventory that’s in limbo.
Still there are a good number of questions still surrounding the foreclosure issue, leaving people to wonder how long it will be until that process gets back on track. It’s important to keep in mind that all those facts and figures surrounding the foreclosure issues boil down real people.
Foreclosure laws exist so that a lender can take back a home properly if the borrower is not meeting his or her obligations under the terms of the mortgage. While it’s clear that the rights of the lender must be protected, we also want to make sure that the letter of the law is adhered to when the decision is made to send a family through the traumatic experience of a foreclosure.
To that end, here’s hoping for a prompt – and fair – resolution to the foreclosure issue.
Benton resident. Rogue journalist. Recovering attorney. Email = Ethan@FirstArkansasNews.net.