Estiman que mercado inmobiliario sufre por congelamiento de ejecuciones hipotecarias

Freeze souring house deals

10/23/2010 © Daytona Beach News-Journal

DAYTONA BEACH -- So far, major banks freezing parts of the foreclosure process have caused some lost or delayed house sales in the Volusia-Flagler market, real-estate officials said this week.
"It's a strong knee-jerk reaction by the lenders, and it's too strong," said Aswin Suri, owner of Exit Realty of Daytona. "We had a deal with a bank that's not even among the ones freezing foreclosures, and it was about to close when it was held up because of the freeze."
Still, investigations of mishandled foreclosures are continuing across the country.

Sales of bank-owned property and short sales have accounted for a majority of home sales in recent months. Real-estate firms report distressed house sales are between half to 80 percent of their business.
John Adams of Adams Cameron Realty said some sales are being "delayed" until the uncertainty about foreclosure documents and processes is resolved.
"We have contracts until the end of the year, and, if the houses come back on the market in a few days or weeks, then we still might have a sale. But if it's Christmas, then they will probably walk," he said. "Right now, it's still to early to tell what the eventual impacts will be."
Adams may get an early holiday gift.
Two of the largest and earliest banks to announce a freeze, Bank of America and Ally Financial's GMAC Mortgage, announced Monday they are lifting the moratorium in 23 states that have judicial foreclosure processes, including Florida.
"I haven't heard rumblings up here about lost deals," said Scott Nieminen of Executive Realty and head of the Flagler County Association of Realtors. "I think this will be a short freeze, a blip on the radar, and thank God because I think we were just starting to see the market stabilizing."
Even mortgage brokers have seen deals fall off the table, said Van Johnson of My Mortgage in DeLand.
"I would be leery of buying a bank-owned property until this is all cleared up. A buyer could end up spending thousands of dollars for a survey, appraisal and title search, and at the last minute be told no because of the freeze," he said.
Significant foreclosures in the economic downturn and high unemployment rates have been a drag on the real estate markets and clogging courts for more than three years. Recent bank repossessions have set national records the past two months.
The high number of foreclosures caused mountains of paperwork that lenders breezed through and were signed by officials without review -- known as robosigning -- and not before a notary public, according to pretrial depositions for lawsuits filed in Florida and Maine.
"We have been telling people for a long time there were problems with the papers," said Larry Glinzman, spokesman for Community Legal Services of Mid-Florida, a local HUD certified housing counseling agency.
"In one case, we had two banks foreclosing on the same house and each had signed and notarized documents stating they owned the house. Go figure."
GMAC started its freeze and reviews Sept. 20 in 23 states that have judicial foreclosure processes where a judge rules on a foreclosure lawsuit filed by a lender. In 27 other states, the homeowner has to file a lawsuit to challenge a foreclosure in court.
Bank of America quickly followed GMAC's freeze and then made it nationwide Oct. 8.
JPMorgan Chase has a freeze in place in 41 states while it examines its practices to ensure they are legal.
PNC Financial also has a freeze in some states.
Wells Fargo and Citigroup did not announce foreclosure suspensions.
Freeze actions vary by bank. GMAC is still starting new foreclosures, but is not evicting people or selling foreclosed homes in the 23 judicial process states. Bank of America stopped seizing foreclosed homes, but is processing new cases and selling homes already foreclosed. Some say that last activity may come back to haunt some buyers and lenders of foreclosed properties if titles are later called into question.
"My biggest fear is that title insurance companies would be reluctant or refuse to issue title insurance for a foreclosed home for fear of someone coming back with a fraud claim," said Patrick Sullivan of Coldwell Banker Expert Group in Daytona Beach. "I would not advise anyone to sign a mortgage without a warranty deed."
That fear of a questionable title is why mortgage lenders require title insurance, said Lisa Blythe, marketing director for Southern Title in Daytona Beach.
"The policy protects the homeowner and the lender. If a homeowner has concerns, call your insurance company," she said.
Carol Lawrence of Landmark Title Services in DeBary and RE/MAX Associates said she has not received alerts from title insurance companies denying policies based upon foreclosure status.
"This has only come to light in the past 30 days and it's too early to tell what the impacts will be," she said. "But they're not closing the door. We have the attorneys general looking into it."

State Attorney General Bill McCollum announced last week he is participating with all the other attorneys general to review foreclosure processes, practices and documents. Federal officials said Wednesday a multi-agency committee is reviewing lender foreclosure practices for compliance with federal laws.

A long foreclosure freeze would only delay an economic recovery, said economist Sean Snaith, director of the UCF Institute of Economic Competitiveness. "Putting a moratorium on foreclosures would be like ripping a Band-aid off really slowly. Except, in this case, it not only prolongs the pain, but pushes the recovery further into the future," he said.
The freeze also fails to punish the responsible parties, if there are irregularities, and only serves to hurt homeowners who are already suffering by providing a false life preserver, Snaith said.
Home sellers could be assisted with a longer freeze as less expensive bank-owned properties are removed from the market, reducing inventories and sales competition, Adams said.
However, a lengthy freeze would prevent the courts from clearing a large backlog of foreclosure cases as mandated by state law.
"We had 100 cases last week that were cancelled because the lenders asked for a delay. It may slow the process, but it's a worthwhile reason," Flagler County Clerk Gail Wadsworth said.