B of A and GMAC to Resume Foreclosures
Bank of America Corp. announced Tuesday that it has reopened more than 100,000 foreclosure actions in 23 states, saying its investigation found no significant problems. Likewise, GMAC Mortgage said it would reopen an undisclosed
number of foreclosure files.
"This is an important first step in debunking speculation that the mortgage market is severely flawed," said Bank of America spokesman James Mahoney.
Meanwhile, state attorneys in general continue to push for a halt to foreclosure sales, saying they have little confidence that procedures have been fixed.
HUD: Banks Will Be Held Responsible
U.S. Secretary of Housing and Urban Development Shaun Donovan said Wednesday that the onus is on banks to fix whatever foreclosure-related problems are found.
Donovan, who made the statement during a White House briefing about the matter, said problems found thus far haven’t appeared to be very serious, but the full investigation won’t be finished until the end of the year. If more serious
problems are found, possible penalties could include fines and a ban against writing mortgages for more serious violations, he added
Bank of America and GMAC Mortgage have ended their foreclosure freeze because they didn’t find significant problems. Donovan said the government wasn’t involved in those decisions.
Practitioners Take Foreclosure Freeze Hit
Real estate practitioners are among those feeling the pain of the foreclosure freeze.
Natalie Wilson, an associate with Coldwell Banker Residential in Tampa, Fla., learned last week that 42 of her 130 REO listings had been frozen.
Practitioners such as Wilson who specialize in REOs are often responsible for upkeep and rehabilitation. They invest their own money and get paid by the bank when the sale finally closes. Wilson says she spends as much as $1,000
per listings on rehab and upkeep, so this freeze on sales is a real financial drain.
“There will be a lot of [practitioners] who do these listings for banks who will turn around and say they just can’t afford it,” Wilson said. “It’s a significant amount of money, and you do rely on those closings to offset the expenses
Slowing sales also hits small practitioners hard. Corin Hall, an associate with Elite Brokers Real Estate Group LLC in Dade City, Fla., says she’ll be alright as long as banks resolve the problems quickly, but the situation could
be difficult to manage if it spreads to more banks and properties.
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