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Friday, October 8, 2010

Freezing foreclosures? What does that mean?

Experts are still determining the impact of the foreclosures freezes.

How many loans are affected?
The exact number isn't known. Chase has said 56,000 loans are affected, but Bank of American and Ally have not provided a figure
 It's likely hundreds of thousands of foreclosures are now in limbo. And the number could grow if more banks join the freeze. Politicians and state Attorneys General are calling on financial institutions to widen the review.
There are currently 5 million loans that are seriously delinquent or are in the initial stages of foreclosure.
Will the troubled borrowers get to keep their homes?
No, not in the vast majority of cases, experts said.
The bottom line is that the homeowners involved have stopped paying their loans. And while there may be some serious problems with the paperwork, the foreclosures are not illegal.
"It's a stretch to say someone has committed fraud by taking shortcuts in a foreclosure," Guy Cecela, publisher of Inside Mortgage Finance, an industry newsletter. "At the end of the day, it doesn't change anything."

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