The national foreclosure suspensions that have been implemented by numerous mortgage servicers has caused a great deal of concern over the housing market and what difficulties may arise from the cessation and recalls of some foreclosures. It’s been reported that Litton Loan Servicing, a servicing unit of Goldman Sachs, will halt foreclosure proceedings in order to review their foreclosure processes.
Litton Servicing joins other major mortgage servicers like GMAC Mortgage/Ally Financial, J.P. Morgan Chase, and Bank of America who have halted foreclosure proceedings over questionable handling of foreclosure documents and improper reviews.
The suspensions of foreclosures has caused trouble for some, as there are homes which were foreclosed upon, but have found buyers that are ready to move in and close on the home. Yet, since these foreclosures have been suspended and are reviewed, these homebuyers are left in limbo and, for real estate agents, this has caused various troubles.
While the consensus seems to be that homes which were improperly foreclosed upon, meaning the foreclosure documents were not properly reviewed or signed with a notary present, will be found to be deserving of foreclosure due to defaulting, this slowdown in the housing market has many concerned about the long-term effects.
There are analysts who believe that, in the short term, these reviews should not do a substantial amount of damage to the housing market but if foreclosure proceedings and the ability to sell these foreclosed homes is halted for a substantial amount of time, the housing market could see a slowdown in recovery or may begin to slip back into dangerous territory.
Since these suspensions are in the early stages and are hoped to only last a few weeks, there is only speculation that can be presented at the current time. Yet, again, long-term suspensions could do damage in the area of home sales and the devaluation on homes which may have to sit empty while documents are reviewed.