Due to the past months of “robo-signing” foreclosures on homes, and the government finally stepping in and making the banks re-review these documents; foreclosures fell dramatically in October. All sorts of filings were affected; sales (dropped 4.4%), notices of auction, and bank repos (which shrank 8.7%).
The banks are having to go through all of the previously “robo-signed” (robo-signing is when members of the bank simply go through stacks foreclosure documents and sign them without review), documents and make sure that foreclosure was actually the proper step that was needed in each case. They are being required to review all kinds of filings; notices of default, notices of auction, and sales of homes.
It is predicted that repossessions are going to fall even more in the upcoming months.
Obama has put into place a “Foreclosure Prevention Program”. The government has even developed a program to assist those who owe more than their homes are worth. This program will also aid in the fall of repossessions.
A gentleman named Doan approached CNN Money with information after he was fired from Bank of America. He was a robo-signer and disclosed that it took most employees one second to sign a document. He was fired because he was checking that the amount of debt on a home was 100%, when the bank’s policy was 85% in debt. Bank of America is not the only bank that is using robo-signers, or that is not following proper procedure for foreclosures and repossessions.
These homes that are being repossessed are mostly being boarded up and left vacant. There is such an overload the banks cannot handle selling or auctioning off all the homes they have taken over. 102,000 people lost their homes in October, with 93,246 being repossessed.
Some banks have decided to let the homeowners that are being repossessed remain in their home until everything is settled and signed. They feel that if someone is remaining in the home that at least the home will be kept up. Some disagree; saying that if they don’t care enough to pay their mortgage they will not care enough to take care of the home. However, at least it is less people out on the street. It gives them time to look for another home, or even possibly catch up on their payments. This also reduces the chances of vandalism; which would in turn cause the bank more money in the long run.
Some feel that if the banks would put everything out on the market “as is” that they would re-coup a large amount of their money back. Individuals, as well as real estate companies would purchase these homes quickly. The question is; were all of these homes taken legally? Until all the documents that have been signed without review are looked at, we will not know.
It is not likely that any of the individuals that lost their homes will get them back, but they may have the ability to sue the bank. Again, until all of the documents have been reviewed, it will not be known.
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The Recent Repossession Fall
