Foreclosure Halt Creates Problems for Buyers
The fallout from the crackdown on mortgage lenders’ handling of paperwork is affecting buyers' ability to close.
Distressed properties make up about a third of home sales. About half of states are particularly affected by the problem. Two factors in various states are causing numerous delays are:
1. Officials in several states — including Texas, Maryland, and Connecticut — are seeking a suspension of all foreclosures until lenders prove what they are doing is legal.
2. Title insurers are refusing to sell title insurance when they can’t be sure there is a clean title.
When will the problem be resolved? Right now, it appears to be anybody’s guess, but until it is resolved, buyers, sellers, and real estate practitioners will be caught in the middle.
Source: The New York Times, Andrew Martin and David Streitfeld (10/07/2010)