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Julie Lauer, Real Estate Pro in Pleasanton, CA

What do you think of B of A's decision to halt foreclosure proceedings across the U.S.?

Asked by Julie Lauer, Pleasanton, CA Fri Oct 8, 2010

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Bank of America services 14 million mortgages, or one out of every five in the U.S., and its loan-servicing portfolio exceeds $2.1 trillion in size. Of its mortgages, 10 million came from its 2008 acquisition of troubled California lender Countrywide Financial Corp. More than 80% of its delinquent loans were acquired through Countrywide.

As of August, there were more than 4.4 million home loans that were either in the foreclosure process or 90 days past due, according to mortgage research firm LPS Analytics. Since 2006, about 6.4 million homes have been lost through the foreclosure process.
5 votes Thank Flag Link Wed Oct 13, 2010
I think it's a defensive action, too little and too late, to save their own skins. This whole scandal is exploding. Even if every one of those foreclosures was fully justified, the process used by BoA, Chase, Ally, and who knows who else was absolutely indefensible. I think they're going to have to pay, big time. And I'm looking forward to some of those CEOs taking the perp walk.

And how about the stealth foreclosure bill that the banks got through Congress--through the House in April and the Senate on September 27--with no debate? They knew what was coming. Obama's veto of that bill alone earns my vote for him.

And how about the banks quietly trying to persuade homeowners--even those not yet behind on their mortgages--to do deed-in-lieu-of-foreclosures? That's been going on for months. Another attempt to extricate themselves from the dangers they saw coming from their handling of traditional foreclosures.

Is there no level to which they won't sink?
3 votes Thank Flag Link Fri Oct 8, 2010
Don Tepper, Real Estate Pro in Fairfax, VA
I think this could further delay the already long recovery of the housing market. No one has said that these homes were not supposed to be foreclosed on, rather B of A and Chase did not process them correctly. This is wrong, and they should be held accountable, but it just means this massive tide of foreclosures is going to sweep in much more slowly, and degrade the real estate market for a much longer period of time.

My 2 cents, may only be worth 2 cents.
2 votes Thank Flag Link Fri Oct 8, 2010
I find it laughable that so many people, including many real estate experts, who were wringing their hands over the “shadow inventory” that has never materialized, are full of glee now that this mess has happened. What do you think will happen if forecloses are simply delayed and allowed to mount up until this mess is cleared up and then they are put on the market? Foreclosures flow through the pipeline until they are sold. Now the pipeline has been plugged and the foreclosures pile up until they can again be put on the market. The problem is that the banks took short cuts on paperwork. Remember…these foreclosures were on houses for which the owners were not making payments. There is no accusation that people who were current on their mortgages had their houses foreclosed upon. When the paperwork is straightened out, those same people who were not making payments will still not be able to bring their mortgages current. Those houses will still be foreclosures. But by then, there will be many more in the cue. Yes, the banks screwed up and they need to be called to task for their actions but the market hates uncertainty and this will not be good for the real estate market or the economy.
1 vote Thank Flag Link Wed Oct 13, 2010
The calm before the storm. It's a big calm, so be ready for when the storm hits. It's going to be the kind of storm that you don't really notice until it starts hitting you from every side.

Do you think homeowners are being lulled into a false sense of security? How many people are going to just stop making payments because "there is't foreclosure to worry about"? There are so many questions, and the answers that make the most sense are pretty grim.
1 vote Thank Flag Link Fri Oct 8, 2010
This could be a GAME CHANGER , if these homes go back to the owners!
0 votes Thank Flag Link Wed Oct 13, 2010
Wow that doesn't sound insignificant!

I predict these foreclosures will never hit the market because states attorney generals and class action law suits will force the banks to give them back to the home owners.

Courts currently have this right legally.
0 votes Thank Flag Link Wed Oct 13, 2010
If it's just B of A, then it's pretty insignificant. I don't know what the numbers are, but if 10% of homes nationwide are in jeopardy of being foreclosed, and BofA owns 10% of these, that's at most a 1% impact on the market inventory levels.

If other banks are pressured to follow BofA's lead, it could reduce inventory significantly (and artificially), setting the country up for a boomerang affect when the spigot is opened.
0 votes Thank Flag Link Tue Oct 12, 2010
I think in the short term it benefits home owners while hurting buyers.

Less inventory will drive prices up temporarily, but when these homes hit the market again, as they will, it will probably drag prices down. At the very least this moratorium drags out the housing recovery, while adding an element of uncertainty that we don't need.
0 votes Thank Flag Link Tue Oct 12, 2010
In the "people who created this mess", let's not forget about Barney Frank - how he seems to get a pass is beyond me.

In terms of what I think, I believe that halting foreclosure will only delay the continued correction of the market.

Jeanne Feenick
Unwavering Commitment to Service
Web Reference: Http://www.feenick.com
0 votes Thank Flag Link Tue Oct 12, 2010
Dan Tepper is right. Wall St/Big Banking has taken over Congress. Lobbyists on K St passed this bill
encouraging banking malfeasance easily and quietly.

If Obama hadnt' gone against his own party on this we might never have heard about this bill.

The Courts have a game changing opportunity.
Lets hope the Founding Fathers were successful in keeping this branch of the government independent.

Lets see if the courts punish the people who created this mess and claw back the profits of these "risk"managers and mortgage bank servicers and security "insurers" who walked away with billions.
0 votes Thank Flag Link Tue Oct 12, 2010
I agree with Dan Tepper.
What about the stealth bill that slid thru congress!
Supported by both Republicas and Democrats.
This took some hutzpah on Obama's part. First time I've seen him stand-up against Big Banking.

Courts have the power in 23 states to return homes to homeowners or force banks to adjust priciple to current market value i bank fraud cases.

These foreclosures may never hit the market.
That would lower inventory. Begin Correcting the fiasco caused by over capitalization of the market by securitizing "insured" mortgages. These banks have had record years.
0 votes Thank Flag Link Tue Oct 12, 2010
My feelings are mixed. One way it's good that this inspires the banks to get their act together and actually review docs; however, yes, there will be a flood of foreclosures in the future when they try to catch up this time period. Then the market will worsen.

Hopefully everyone from banks to wallstreet, investors to homeowners, will learn a valueable financial lesson from this recession. Hopefully one that we won't let happen again.
0 votes Thank Flag Link Mon Oct 11, 2010
This action by B of A et al is coming at the barrel of a gun pointed at them by the trial lawyers. As far as the banks are concerned these foreclsoures are money losers, they cut corners and got caught. The impact is probably negligable. The majot banks have tons of inventory they can release until they begin foreclosing again and when they do start again they will do so with gusto. We on the front lines won't see much change.
Web Reference: http://bob2sell.com
0 votes Thank Flag Link Mon Oct 11, 2010
Halting foreclosures proceedings, although probably necessary, will just compound the problem. What happens when all this gets sorted out. There will be a massive influx of foreclosures sales that will further deteriorate housing prices and the real estate market.
Web Reference: http://www.DesariJabbar.com
0 votes Thank Flag Link Fri Oct 8, 2010

My knee jerk reaction is a vision that resembles the "Trojan Horse....."


0 votes Thank Flag Link Fri Oct 8, 2010
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