Why Do We Need To Halt ALL Foreclosures?

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Due to flawed documents that some lenders used to foreclose and evict families from their homes, many lawmakers in Washington are calling for a stop to ALL foreclosures. Granted, the banks admitted to illegal activities and unlawful foreclosures. But should we just throw our hands in the air and stop all foreclosures across the nation?

Many lenders have stopped foreclosures in the 23 states where you have to go before a judge and make your case. If you are successful the judge signs off and you get the foreclosure. What about the other 27 states. Why not let these foreclosures go ahead? There are thousands of valid foreclosures that should proceed and close.

It raises questions about investor confidence. Will there be a secondary market for mortgages after all the smoke has cleared? Mortgage Backed Securities (MBS) provides billions of dollars to the residential mortgage market. MBS was the main reason for creating the Mortgage Electronic Registration System (MERS). MERS and robo-signing is the reason we are at this point in the housing crisis.

What about buyers of foreclosed properties. Many Americans have waited years for the opportunity to buy a house. The housing crisis provided that chance of a lifetime. They have found a house that dropped drastically in price, and they were able to secure a mortgage at record low rate. And now we are telling these people that all bets are off because some banks took short cuts and illegally foreclosed on some homeowners. This doesn't seem fair. Fannie Mae has begun giving REO (bank owned) property buyers the option of canceling their deals and walking away or waiting until the servicer gives the guarantee that the transaction is solid.

What happens when a homeowner was wrongfully evicted and the property sold at auction. Our guess is that the courts will impose sanctions against the bank. This would most likely be a monetary fine. The buyer at the auction bought in good faith, so we can't take the house back and return it to the foreclosed homeowner.

   
Related articles from House Refinance Center

Helping You Avoid Foreclosure  
National Foreclosure Moratorium 

Hope For Homeowners

Related articles

• Bank of America to halt foreclosures in all 50 states (americablog.com)
• Foreclosure freeze? What is that? (money.cnn.com)