GMAC Mortgage/Ally Financial has suspended foreclosures in the wake of revelations that documents may not have been properly processed concerning certain homes. These questions over foreclosure documentation and proceedings have caused other major mortgage servicers to also suspend and review foreclosures on homes across the nation.
However, there seems to be the general idea that these foreclosures were not unjust, but were only improperly processed. Accusations that some employees signatures did not come from those employees or a notary was not present when these documents were processed are some of the more common complaints concerning these foreclosures. For GMAC Mortgage and other mortgage servicers, it’s unlikely that foreclosures will be overturned as numerous homeowners had already defaulted in cases where these foreclosure documents are in question.
Yet, there is question over whether these foreclosures are hurting homeowners and the housing market, and there is worry that a lengthy review process and suspension timeframe could halt housing recovery. While there could be damage if suspensions are held in place for the long-term, some of the more immediate problems that are being felt are by homebuyers being denied access to homes they thought they may have owned due to foreclosure reviews.
Numerous financial institutions, like the GMAC Mortgage have halted foreclosures, which have stopped some homeowners from closing on the purchase of foreclosed properties and there is concerns over these homes simply sitting empty facing a loss of value.
However, despite the fact that these reviews and suspensions have only recently begun, there are some who believe that these foreclosure troubles may be over sooner, rather than later, which is felt to be more beneficial for the housing market. While there could be slight repercussions for the suspensions, overall housing recovery is believed to be relatively unaffected if review processes are only in the short-term.