Banks Halting Foreclosures in California and 23 other states

Banks Halting Foreclosures in California and 23 other states are the latest news on the foreclosure front that can have impacts on the real estate market. Undoubtedly, this creates questions and concerns, here are some of the highlights of the development so far:

One of the banks halting foreclosure that directly affect those of us in California is Bank of America. On October 9, Bank of America announced that it would be suspending foreclosure while it reviewed its foreclosure processes. So far, only Bank of America has extended its foreclosure moratorium to California, where most of the foreclosures are non-judicial. Foreclosure Sign In Front of Home

The other banks halting foreclosures in the 23 states that have judicial proceedings on foreclosures process include Goldman Sachs Group Inc's Litton Loan Servicing, Ally Financial Inc's GMAC Mortgage unit, JP Morgan Chase, and PNC Financial. These lenders/servicers began voluntarily halting foreclosures in response to findings that questioned whether they were following the correct procedures to foreclose on a property. These banks halting foreclosures were not mandated by either the state or the federal government.

Here is a list of affected states: Connecticut, Floria, Hawaii, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Nebraska, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota, Vermont, Wisconsin. Source: Bloomberg: Ally's GMAC Mortgage Halts Home Eviction in 23 States.

The new development of the banks halting foreclosures can have an immediate impact on the market. Some real estate agents have begun to report delays in escrow and removal of listed foreclosures. It is hard to assess the impacts as the banks halting foreclosures have not made it clear how long the moratorium will be. If the suspension is 30 days or less, then the interruption can be minimal. However, if the suspension goes on longer, then it will directly impact the inventory for sell, that can in turn put an upward pressure on home prices. Also, the uncertainty may steer buyers away from buying foreclosed homes.

We shall continue to monitor further development to assess how this may affect the housing market. Stay tuned for more information. If you're thinking of buying, selling, or investing, as this situation illustrated, be sure you're contacting a real estate professional who is up-to-date on the market and news, and can help you determine the best course of action!

Contact me if foreclosure is on your mind, mention this blog post, and get a free phone consultation on what your options are.

Chia Rodeski: Office: 408-409-1413 E-mail: clrodeski@gmail.com