1. ROBO Signing: When banks foreclose on properties it is one person’s job to review the paperwork and make sure that the foreclosure is justified and legal. Since one bank employee is assigned to this job, they may sign close to 10,000 foreclosures per month. Having to review 10,000 foreclosures per month does not allow the employee the proper amount of time to review each foreclosure and follow the legal procedures; therefore, properties may have been wrongfully foreclosed by the bank and now the government is in the process of investigating this situation.
2. Will the freeze cause the banks to cancel buyer contracts on REO properties? Currently the freeze will impact bank-owned properties that are owned and /or serviced by Ally Financial/GMAC Mortgage, JP Morgan Chase, and some properties that were owned by Bank of America. Generally, contracts to buy these homes are being put on hold and extended for 30 days. Also, banks are offering buyers the option to cancel their contracts and recoup their deposit money.
3. Is it safe to buy a foreclosed home? If you are in the market to buy a foreclosure property, make sure you find out what bank owns the property, and run the property by your title insurer before you get too far into the transaction, and before you spend money on the inspection and appraisal. Once you know which bank owns the property and the title insurance gives you the green light, go ahead; just proceed with caution until you have all the necessary information.
4. How will the foreclosure freeze affect American home values? The freeze may cause prices to stabilize as the supply of foreclosures for sale starts to shrink. However, if the freeze lasts a long period of time, it may delay the possible foreclosure of many other properties, which in turn would delay the recovery of the housing market and home prices, over time. If the freeze lasts a long time, it could keep the appreciation flat for a longer period of time.