Foreclosure Investigation Commences

The probe in the foreclosure fraud is on and the latest buzz is that Michigan has stepped in along with officials of other states and the District of Columbia to look into the details whether the lenders have followed the laws when they foreclosed homes.

The investigation focuses majorly on the allegations that the mortgage companies have framed the documents in some foreclosures. Michigan’s state attorney general Mike Cox and bank regulators would be looking into the cases.

In 23 states foreclosures must be accepted by the judges a process which is not entertained in Michigan. Big lenders like JPMorgan Chase have halted their progress in repossessing homes in these 23 states. Bank of America leads the way by stopping it in all 50 states. But there are some exceptions like Citigroup, Wells Fargo etc who have not stopped their foreclosure process as they believe they are not doing anything wrong.

Michigan is not a judicial review state and the proceedings could affect the homeowners there believes Cox Spokesperson Joy Yearout. The probe is going on and action will be taken after there is evidence produced quipped Joy.

Georgia is one more state which is setting up an enquiry in the foreclosure practices of the mortgage industries. The people are hoping that these measures taken will prevent foreclosures which should not have happened repeat itself over time.

The 23 states where foreclosures need to be accepted by the judges the working people can review the questionable documents. These processes may pave the way for legal changes in the foreclosure system nationwide. With the probe going on full swing there is a surprising statistic revealed by realty trac that more than 2.5 million homes have been lost to foreclosure from 2007 when the recession started. Realty Trac feel that the paperwork can’t change the truth of the matter that the people cannot repay their borrowed loans. They also feel the biggest problem to be tackled is not foreclosure but the issue of unemployment in the United States.

At present Michigan is ranked sixth in foreclosure activity accounting for 1 foreclosure for every 208 homes. If the investigation drags out it would have a chilling effect on the market feel the experts. Foreclosure specialists also feel that it won’t be affecting Michigan as they don’t require affidavits and depend more on foreclosure Ads.

The public look at this in various angles whether it is good for the attorney generals to get involved, The lenders becoming extra careful the next time they close in on a foreclosure or is it all an eyewash to provide a temporary hiatus to prevent the inevitable.

As many as 9 million U.S. mortgages in the foreclosure pipeline or already through the process may face challenges
So what will open up in the foreclosure market is awaited with bated breath by all.

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