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Another Halt in the Foreclosure Process
August 6th, 2013 7:44 PM

On May 6, 2013, there was yet another hiccup in the foreclosure process.  JP Morgan Chase, Citigroup, and Wells Fargo halted nearly all their foreclosures which were in their final stage of losing their homes.

The sudden halt in activity was a result of bank regulators continuing to make revisions to the treatment of distressed borrowers in that final stage, the three powerhouse lenders decided that they needed to do some internal exploration.

Bank of America surged forward claiming they have nothing to fear.  “We manage our mortgage servicing operations in compliance with all laws, regulations and standards for sound business practices,” said a spokesman for BofA mid-May of 2013.

Not the same case for the other three.  Chase had this to say;

“In response to the OCC guidance and in an abundance of caution, we temporarily halted foreclosure sales where we could to validate that our process covered the guidance.  We have since resumed sales.”

According to PropertyRadar.com, a foreclosure tracking firm on the west coast, Wells and Citi were still at a standstill.

"We are in the process of complying and following the directive set forth in the OCC guidance," Citigroup said.

The latest OCC bulletin had "slight changes from the previous bulletin,” said Wells Fargo, and “wanted to be absolutely sure that our interpretation of the language was the same as our regulators.  We simply needed to take the time to assure that we can validate and document our compliance." 

This ‘hiccup,’ directly related to the settlements with 13 lenders for wrongful foreclosures, and the delayed distribution of those funds to borrowers.   Additionally, the OCC singled out some issues and implemented new “minimum guidelines,” addressing many shortcuts, errors and even robo-signing.

During this period of “hiatus,” PropertyRadar reported that in a 2 week period across the 5 west coast states of California, Oregon, Washington, Nevada and Arizona, Wells Fargo went from 298 foreclosure sales the first week, to the following week, 17 sales.

Benjamin De Los Monteros of Cherry Picker Investments, an auction buying service in Chicago says, “I’ve noticed the decreased activity in the foreclosure auctions.  Just like the moratorium a while back, a halt at all, however short it may be causes a chain reaction of backed up files, especially in a judicial state like Illinois.  What does all this mean?  It means there will likely be a sudden resurge of properties in the Chicago metro area auctions, much like earlier this year when Judicial Sales Corporation did more than 3,000 properties in 1 month.”


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Posted by Michael Hobbs on August 6th, 2013 7:44 PMPost a Comment

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