October 26, 2021

Foreclosures Back In Action

foreclosure

Banks are back on the foreclosure hunt, to the dismay of many home owners not able to make their house payments. Image © Stephen Vanhorn | Dreamstime.com.

After several weeks of hiatus, it appears banks are starting to fire back up the foreclosure machines once again. Originally it was anticipated foreclosure proceedings would be halted by several big banks for as long as three months.

At least two banks, Bank of America and GMAC, previously reporting to have stopped foreclosures to review their foreclosure processes and ensure they complied with the law as well as government regulations, have reportedly completed their reviews. They have indicated, after taking quick inventory of their systems, that everything was sound.

Many home owners felt they had a glimmer of hope that a better outcome would result from the stalled foreclosures. It gave many breathing room to consider alternative actions and possible get things back on track.

Financial experts hoped this would encourage banks to get more aggressive with mortgage modifications or possibly drive some interest in short sales. This doesn’t appear to be the outcome.

Due to what seems to be arbitrary decisions by banks, at least from the home owners’ perspective, banks are taking less desirable end results in favor of foreclosing. In many cases, the bank would save money and end up with more cash from a deal by allowing short sales. Unfortunately short sales have gotten a bad rap over the years with fraudulent cases popping up and costing banks as much as $300 million each year.

Only time will tell if foreclosures continue as they did before or if banks, and potentially the U.S. government, take a new approach with regulations and rules to help protect home owners.