Canceling sales like there’s no tomorrow.
Going through a foreclosure? Then the headline of a canceled foreclosure sale doesn’t sound like a bad thing. Unfortunately, that’s not what we’re talking about.
Imagine this: you gave your 30-day notice to your landlord, because you just negotiated a killer deal on your dream home, a foreclosed property. You got a super deal. You’re all packed up and ready to go, it’s just 5 days away from move-in day! Then you get the word: The sale has been canceled. Enough to send cold chills up and down your spine? Absolutely! Where do you go now! You have to move out of your rental, all of your money is tied up in an escrow account for the purchase. The rental market is super tight (where do you think all the families who’ve been foreclosed need to live?). In a word, you’re fucked seriously inconvenienced.
This is not a drill. This is not a theoretical case. This is happening right now. For the most part, it’s not happening en masse here in California. But is happening in large proportions in 23 other states of the union.
What’s all the hubbub about?
Fannie Mae, the giant mortgage holding company that buys loans from commercial lenders, is pulling back sales of homes that might have been foreclosed in bad faith. But as a scandal unfolds over mortgage lenders’ shoddy preparation of foreclosure documents, the fallout is beginning to hammer the housing market, especially in states like Florida where distressed properties are abundant.
Three major mortgage lenders — Bank of America, GMAC Mortgage and JPMorgan Chase— have said they are suspending foreclosures in the 23 states where they first need a judge’s approval. The companies say they are reviewing their operations after disclosures that employees signed documents without determining the accuracy of the material, as is required by law.
Those reviews are throwing into limbo hundreds of thousands of foreclosures and pending home sales, analysts estimate, though the lenders and Fannie Mae have been mostly silent about precise numbers and other specifics.
Will this issue spread to western states like California? It seems possible and even likely, as some brokers have reported some of their foreclosed listings being pulled from the market, pending a review.
All I can say, is that these banks, especially the giants, who accepted TARP funds, really need to get their act together. They’re helping to create the largest unnatural disaster the world has ever seen. They’re making the BP oil spill look like that little oil slick I have on my driveway.
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