Tuesday, October 12, 2010
Saturday, October 9, 2010
The real estate industry got clobbered yesterday by the news of Bank of America (BofA) freezing their foreclosure process in ALL 50 States. Many homeowners with mortgages with Bank of America are happy to hear the moratorium news yesterday freezing all Foreclosures nationwide, opening the scope wider from the original 23 states originally affected (not California).
Bank of America has to review it's process for handling loan related documents. A lot of this is due to the electronic systems the banking industry set up to package loans for Wall Street. In the midst of all of this changing of the guards, i.e. Bank of America purchasing the lethal Countrywide Home Loans, Wells Fargo purchasing Wachovia, Chase purchasing Washington Mutual. Remember, the taxpayers were the ones paying for these buyouts through the 'bailout program'. During all of these transitions, the banks got careless with documenting signatures properly and are now seeing the results of their management of these loans.
My buyers and some distressed sellers have asked me in the past 24 hours how this new guideline affects those of us in California? Allow me to answer a few questions you may have.
The moratorium is only related to Bank of America loans, here in California. If you do not have a mortgage with them, you are still at risk of the bank moving forward with a trustee sale if you have been notified of such sale.
If you are an owner in foreclosure with a Bank of America mortgage and have been notified the property is to be sold in a trustee sale, the bank, as of today will not proceed with the trustee sale until the freeze has been lifted.
During the freeze, if an owner who received a Notice of Default, but have not received notification of a trustee sale, the bank will stop the process of foreclosure.
The bank will not stop the bank foreclosure on a property where the owner is behind in payments and have not received a formal Notice of Default. The bank can still move forward with placing the mortgage into default as they will track late payment history and will decide as to whether or not to place you into default.
Many industry insiders see the freeze a negative in regards to our overall economic recovery and of the real estate industry. They believe the moratorium will only prolong the process and not fix the problems of upside down mortgages and high unemployment. On the other hand, I think it may give a person more time to find employment and gather themselves in order to resurrect themselves financially. (Hey, I'm a glass half full kind of guy.)
Maybe the bailout program will finally hit Main Street as we all get a break from the banks' heavy hands?