Pause in Residential Foreclosures Threaten Already-Weak Market
Globe and Mail (CA) reports: In a recent article regarding a possible scandal involving residential bank foreclosures, Toronto’s Globe and Mail newspaper stated, “All 50 U.S. states are launching probes into whether banks used shoddy paperwork to force people out of their homes, the latest sign of a burgeoning scandal that threatens to bring parts of the country’s housing market to a standstill.”
Even as Bank of America and JP Morgan Chase – the largest mortgage servicers in the US – suspend their current foreclosures in favor of investigating allegations of malpractice and fraud before proceeding, there may be some risk in doing so. According to Dr Sam Chandan, Real Capital Analytics global chief economist, these largest-scale foreclosure freezes could be “very disruptive to the proper functioning of an already weak housing market.” This is because foreclosures currently account for a large portion of overall sales in the US, between 25% and 50% in most states, according to the Globe and Mail’s sources. Should foreclosures be shut down, residential sales activity would decline significantly.
View the full article on Globe and Mail (CA): Pause in Residential Foreclosures Threaten Already-Weak Market
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Posted by: Nina Turner