Real Estate Insights

This Monday Bank of America and GMAC, ignoring allegations of fraud, announced that they have resumed their foreclosure process in the 23 states initially affected by the so-called “foreclosure freeze.” After reviewing their internal processes both banks have re-submitted applications with the courts to resume foreclosing on over 102,000 pending foreclosure actions delayed by the “robo-signing” fiasco.

This is being seen as part of a major push by lenders across the states as they hope to avoid any further delays in their foreclosure processes, especially any political threat of a Federally mandated moratorium on foreclosures.

If banks can prove that they have been following correct foreclosure procedures, except for the allegations that certain employees signed hundreds of documents a day without reviewing their accuracy, then they can debunk growing speculation that the financial markets are severely flawed, an important step to keep our economic recovery headed in the right direction. And even more importantly, major banks are claiming that they have found no signs that any of the previous foreclosures were done illegally, and that no one has been wrongfully evicted from their homes.

In an attempt to restore further confidence in the housing market, Bank of America has also been able to reach an agreement with national title companies resolving their issues with uninsured foreclosure sales. By agreeing to cover any court related expenses in the event any previously foreclosed homeowners try to claim ownership of their property due to the possibility of a wrongful foreclosure title companies will now resume issuing title insurance to buyers of foreclosed homes.

Additionally, Bank of America and GMAC hope to resume their delayed foreclosures over the next few weeks in the remaining 27 states on a state by state basis and only after they have concluded that their foreclosure procedures have been and will remain to be legally compliant. Both banks expect that they will be back to business as usual by the end of the year.