Some banks suspending Hawaii foreclosures for the time being because overwhelmed bank officials have been signing off on foreclosures without ever reading the paperwork!
I’m always skimming financial news because it affects jobs, portfolios, consumer confidence and real estate prices…in other words, everyone and everything. Some recent news items caught my eye. The Dow closed over 11,000 the other day for the first time in 5 months. It has been a full 3 years since it’s high of just over 14,000 and at this point it is still 25% below that level. Markets have historically provided some of the best returns in November and December on average. As a result of the election, this year may turn out more political balance in Washington, which in turn produces the “gridlock” that markets tend to favor (less uncertainty). Since 1950, fourth quarter gains in the market average about 8% in mid term election years.
There is some good and bad in all this depending on whether you have a half full or half empty perspective. But this last item really has ugly written all over it. B of A, JP Morgan Chase, and PNC Financial all recently announced they are suspending foreclosure sales in many states and in the case of B of A in all 50 states. The reason is a new term added to our lexicon, “Robo Signing.” It seems that overwhelmed bank officials were signing off on as many as 15,000 foreclosures a month without ever reading the paperwork! But perhaps this moratorium, if it’s brief, will be a good thing if the banks get their houses in order and find a way to handle these transactions in an efficient, orderly manner. These properties need to be worked out of the system in order for the housing market to truly recover.
For more info read B of A Halts All Foreclosure Sales.