The nationwide halt on foreclosures by Bank of America, along with other banks that are considering the same thing will most likely slow up the real estate market even more.
The problem lies in the many foreclosures that are currently and soon to be on the market. If there is any type of ?mortgage fraud? it could feasibly cloud the titles of the homes thereby making a transfer of title in a sale much more difficult.
But of course, there is title insurance. That ought to cover it right?
Well, you must remember that even title insurance is still ?insurance?. If there is even an inkling of risk, they won?t cover it. Nope. Insurance companies are out for the profits. Until the ?mortgage fraud? is handled, we can expect a more difficult real estate market at least for the foreclosed homes. At this point there are a few title insurance companies that have stopped issuing title insurance for foreclosures from certain banks. Expect more of that.
However, this potential decrease in home sales could also potentially prop up prices for the non-foreclosed homes. That would be a benefit for regular sellers. Instead of losing a whole ton of money from the time they bought their house, they will only be losing about three quarters of a ton of money, right?
But the shadow inventory will increase. It is highly unlikely that a temporary halt on foreclosures will become permanent. It is also highly unlikely that the temporary halt will help distressed homeowners in any way, especially with large house payments it gets to a point where you are just buried way too deep to dig yourself out.
It?s a mess.
Read more at Unclear Titlesand be sure to check out all the links in that article. Interesting mess?..
