• 08
  • October
    2010

Homeowners who have defaulted on their mortgages may be confused about the current news that some of the nation's biggest banks are halting foreclosures in the 23 states, including Florida, where a judge needs to sign off on the action. JPMorgan Chase, Ally Financial (formerly GMAC) and Bank of America all halted foreclosures in 23 states in order to look over their hastily prepared paperwork. On Friday, Bank of America announced that it was expanding the halting of foreclosures to the entire country.

CNN Money published an article on Friday with answers to some current questions that homeowners may have, whether or not their house is currently in the foreclosure process. People who have already had their houses repossessed by banks or have purchased a house that was foreclosed upon may wonder whether the bank paperwork involved was up to par.

In the 23 states where judges have to sign off on foreclosures, it came to light that several banks were rushing through paperwork and violating laws in the process. For example, because lenders had so many foreclosures coming through at a time during the housing crises, they tried to rush through the process and often neglected to sign the document in the presence of a notary public or have personal knowledge of the facts in the case.

While the banks are halting the process and will take time to look over the documents again and make sure they are legally valid in court, it does not necessarily mean that they illegally foreclosed on any homes, but, rather were sloppy in paperwork. Many homeowners may be in foreclosure limbo for as long as January. 

Source:

Freezing foreclosures? What does that mean? (CNN Money)