Categorized | Finance and Mortgage

Foreclosure Deal Has Yet to Have Tremendous Impact

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After the United States government and the big banks agreed to a settlement regarding the fraudulent foreclosure tactics that were implemented by lenders, many economists expected foreclosures to once again flood the market. After all, banks had essentially put a stop to processing foreclosures during the settlement talks.

 

Those expectations, however, have not yet come to light, as the number of foreclosures has not yet increased nearly as much as economists thought. In fact, the number of foreclosures started by banks has decreased by fifteen percent from January. Foreclosure sales have also declined in the past month since the settlement.

 

Those statistics are far from what most economists had anticipated immediately following the settlement. Most believed that that delinquent homeowners would likely soon face foreclosure, and that the banks would speed up the foreclosure process. Neither of those anticipated results have yet to take place.

 

With that being said, it is likely that the anticipated results of the foreclosure deal do take place at some point down the road. Closer analysis of the mortgage deal suggests that certain elements of the settlement added various obstacles that have caused the delay in processing foreclosures.

 

Lenders are now required to provide delinquent borrowers with a plethora of information on the state of delinquent loans before they can even begin the foreclosure process. Such information includes the bank’s right to foreclose on the property, the payment history of the borrower, and the name of the person or group that hold the loan. Such information can be difficult to obtain, which is why the foreclosure process may take longer than most anticipated.

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About Drew Wilson

Drew focuses on the Commercial and Mortgage/Finance categories.

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