Yikes! What's all this about a Foreclosure FREEZE??? What's REALLY going on?


Well, folks, this is what we all want to know. I've been reading the news and surfing for information, and mostly what I see on the web and hear on the streets is a great deal of uncertainty and  conjecture. Any time there is a 'big' news story, there's also a big pile of garbage information to sort through. In the meantime, the questions keep rolling in...

Buyers (and their agents!) want to know if it's OK to offer on a bank-owned (REO) home? People who've already purchased one want to know if they really own it? Sellers who are in default want to know if that means the pressure is off them for awhile?  


I was looking for an iconic image to illustrate this problem, and found one: unfortunately, the image was not in the public domain, I didn't see that waiting for permission was an option, and it's not in my DNA to kipe it so, here's the link. ...and here's another image you will find unforgettable.

I think at this point it's important to step back and be careful that you examine the source of any information, and then take it all with a healthy lump of salt. I also think it's too soon to really tell how this will play out. I do think it's going to make most reasonable people more cautious and we all need to dig a little deeper in evaluating our own and our clients' circumstances. I hear some people say that foreclosures have been 'halted', or 'stopped'....well yes, it appears that at least some have been 'put on hold' or deferred until their validity can be reviewed and any paperwork or procedural omissions can be corrected. I suspect we'll even find (surprise) that in some cases there was wrongdoing or fraud, though am betting most of it is just shoddy work from overwhelmed employees who found it the only way to keep up with the volume thrust upon them.

I think 'stopped' is a bit strong, and that most of these foreclosures will be upheld and eventually processed, but that it will affect our markets and how we do business for a time. I also think that while it does seem to affect a lot of foreclosures, there will still be those that were processed properly. The smaller banks seem to be doing a better job of getting their workflow under control, at least as far as short sales are concerned, so one can hope that applies to their foreclosure processing as well.

I don't know about other Realtors, but I for one will be in close contact with my trusted local Sedona and Verde Valley title company and escrow officers as they try to work through the information as well. Foreclosures and Short sales are a significant part of our local Sedona real estate market, and have impacted the surrounding communities of Cornville, Cottonwood, Clarkdale, Camp Verde, Lake Montezuma and Rimrock as well, to differing degrees, with the outlying areas harder hit than the greater Sedona area - though we're still experiencing much less of this activity than the metropolitan areas of Arizona.


Here are some of the articles and links I found most helpful:


 http://www.azfamily.com/news/national/104684694.html


 http://www.bizjournals.com/phoenix/stories/2010/10/04/daily73.html


This article came my way this morning: http://www.calculatedriskblog.com/2010/10/us-outlines-process-for-orderly-and.html


At the beginning he gives a link to the FHFA (Federal Housing Finance Agency)’s document outlining procedures for servicers to follow in systematically addressing any deficiencies in their foreclosure processing.


It’s nice to know they’re working on it, not that this means any resolution will be speedy.


It's a slippery slope we're on folks...watch your step out there! 


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