The Foreclosure Freeze
Posted by Lee Cameron on Tuesday, October 12th, 2010 at 9:56am.It's still a little early in the year for a freeze, isn't it? Apparently not.
Many of you may have been hearing rumblings in the news about foreclosure freezes. But what does it all mean, you may ask?
Here's what's going on - many banks are putting a temporary freeze on their foreclosure process while they review the paperwork. Why do they have to review the paperwork? Well, because the banks are admitting some of the paperwork may not be as legal as they assumed. Many of the documents were not signed in the presence of a notary public and in many cases, the documents were not actually fully reviewed before they were signed!
Because of this, Ally Financial, JPMorgan Chase and Bank of America have all decided to halt their foreclosure processes while they figure out their own paperwork problems. And other major banks are following suit.
Now, this freeze does not effect every home facing foreclosure. The banks are only putting a freeze on those foreclosures that they are investigating. JPMorgan Chase initially put a freeze on 56,000 foreclosures and just yesterday they announced that they will be expanding that number. Bank of America has frozen all of its foreclosures nationwide, while Ally Financial has frozen an unspecified amount of foreclosures in 23 states.
This freeze is only temporary, of course. These homes will likely still be foreclosed on when the review of all the paperwork is finished. However, most experts believe this won't happen until sometime after January of next year.
What does that mean for the rest of us? Well it means that, for a few months at least, we're going to be seeing fewer foreclosure properties on the market. This will hopefully give us a little boost in sales prices during the usually-slow winter months.
It also means that maybe, just maybe, banks will be a little more careful in the future when trying to kick people out of their homes. But I won't hold my breath on that one.
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