Who Benefits From a Foreclosure Freeze?

October 15, 2010 at 5:29 pm Leave a comment

By Maria Hass

On Saturday, Oct. 9, The Arizona Republic reported that Bank of America is postponing its processing of foreclosures until further investigation of their foreclosure process is obtained.

My earlier understanding was that this foreclosure freeze applied only to states that use a judicial process to foreclose on a home. However, recent reports mentioned that Bank of America is halting foreclosure processing in all 50 states. As a result, the recovery of the housing market will be delayed, as there is a huge inventory of pending foreclosures.

It seems that Bank of America’s decision to freeze foreclosures will protect their interests more than anything else. BofA would not like to see a huge legal case ahead of them if it’s found the bank did not comply with required and proper foreclosure procedures.

BofA’s move does not help homeowners who have already left their homes and signed a long-term lease. It slows down the housing recovery by stockpiling foreclosed homes and dumping them either slowly or at once.

The only way we could see this housing market turn around is if Bank of America and other banks consider a mortgage amnesty by reducing homeowners’ principal mortgage amounts. If this happens, people will not be upside-down on their homes and they will be able to afford their payments. Short sales and foreclosures will slow to a near halt and a healthy housing market reflecting strong price appreciation will result.

For the full Arizona Republic article, please go to: http://www.azcentral.com/arizonarepublic/news/articles/2010/10/09/20101009bank-of-america-stops-foreclosure-sales.html.

Entry filed under: Arizona Real Estate, Chandler Real Estate, Foreclosures & Short Sales, Phoenix Real Estate. Tags: , , , , .


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