Foreclosure mess to be straightened out in 2011?
According to RealtyTrac.com – the group that keeps up with such things – the number of foreclosures dropped 21 percent from October to November. The Tribune newspapers group reported the drop is the direct result of lenders examining their procedures to make sure they were following the letter of the law when taking homes back from borrowers in default.
The allegations of questionable practices have been mostly aimed at large servicers – financial institutions that enter into agreements with the original lender to collect mortgage payments due. It’s worth mentioning that a good number of mortgages are still serviced locally in Arkansas.
In other words, the bank where a borrower takes out a mortgage is the one that collects payments, too.
Still, it’s also worth mentioning that servicers at issue have taken measures to protect the rights of consumers as a response to the commotion over flawed paperwork and other issues. Those improvements were significant enough to cause Fannie Mae and Freddie Mac – the government-sponsored enterprises which underwrite the bulk of mortgages in the United States – to tell real estate agents to resume with sales of foreclosed properties at the end of November.
At least one group, however, is still investigating. A national task force made up of regulators from the Federal Trade Commission, U.S. Department of Housing and Urban Development (HUD), the U.S. Department of Justice and attorneys general from all 50 states and bank regulators started investigating foreclosure practices in October.
Their primary concern, apparently, has to do with what actions servicers took when borrowers went into default. Lenders, see, are required to give borrowers the chance to cure defaults – to work out plans through which home owners can make up their missed payments and keep their homes.
The Tribune reports that task force is still investigating and expects to release its findings in 2011. While no one seems in a hurry to speculate on what those findings might be, we do know that the results of the task force’s investigation will be a very important factor in determining whether foreclosures will continue without a hitch or whether wrongs need to be righted and foreclosure processes need to be further adjusted by lenders.
At any rate, here’s one group that we know has been hurt by the hubbub over foreclosures – people who have entered into agreements to buy homes but can’t close until lenders again feel comfortable enough to finalize those sales. While we haven’t had as many people waiting in the wings to buy foreclosures as some other states have, the delayed proceedings have caused problems in some parts of the state.
Frankly, clearing up any alleged problems with foreclosures will do nothing but contribute to an economic recovery. Buyers who have fallen behind on their payments should be offered the chance to make them up and stay in their homes. However, those purchasers waiting to close on foreclosed homes ought to be able to complete those transactions.
Here’s hoping balance is restored to the system and it works as it should for everyone.
Benton resident. Rogue journalist. Recovering attorney. Email = Ethan@FirstArkansasNews.net.