The Banks of America halted foreclosures for the housing market and residential properties across the whole country last week. This is because of various allegations that residential properties are being seized by banks without appropriate papers that are properly checked. The temporary-halted-foreclosures are investigated by state attorneys and lawmakers whether banks supplied sloppy paperwork to support expulsion of delinquent borrowers.
The said investigations are being processed-out by the Attorney General Offices as a result of inconsistent paperwork that are said to be automatically “stamped” by computers during the long foreclosure process done by most banks.
There are also employees from top lenders who admitted to automatically “stamped” foreclosure papers without reading the whole document. The top lenders include JP Morgan, Ally Financial, and the Bank of America.
JP Morgan Chase and Co. is beginning to “systematically re-examine” the filings for foreclosure.
While owners of residential properties maybe rejoicing about the suspension, the Securities Industry and Financial Association said that the nationwide or “systemwide moratorium on all foreclosures” can be catastrophic.
The president of the Securities Industry and Financial Markets Association, Tim Ryan said on Monday that the “system-wide” suspension of all foreclosures in the country could be “catastrophic”, and it could damage the economy and the whole of the housing market.
A hearing with the Senate Banking Committee regarding the issue is postponed after the mid-term elections.
RealtyTrac, a company who keeps track of the housing market and residential properties, said that banks have seized 95,364 properties for the month of August and issued foreclosure notices to 338,863 for owners of residential properties.