Bank foreclosures have happened left and right starting with the real estate bust that was brewing since the late 2006. Before that, the property market was riding high with home buyers taking on loans to buy properties with inflated prices. Eventually when interest rates started to climb and mortgages could not be paid, a lot of homes across America were repossessed by banks that had to liquidate these assets to get their money back.
Bank foreclosures halted
In October 2010, Bank of America halted foreclosure proceedings across the country, leaving the other lenders to follow suit. They gave in to the pressure from multi-sectoral groups to review the process of how they foreclose properties amid criticisms that these banks churned out hundreds of documents for foreclosure without truly inspecting these.
Some have even accused the banks of just caring about foreclosing on properties quickly without caring for the welfare of the homeowners.
But Bank of America refuted this by saying that its foreclosure decisions are accurate and that providing solutions for its distressed homeowners is still the lenders main focus. PNC Financial Services Group Inc., on the other hand, said it is making sure that its bank foreclosures are complying with state laws.
These allegations happened in the wake of a JP Morgan Chase admission that it had robo-signers wherein he signs hundreds of foreclosure documents a day without inspecting them.
It could last for years
The mess in foreclosure proceedings could last a couple of years, according to Bloomberg Businessweek. Some of the countrys biggest banks are facing a multitude of lawsuits and class action suits that claim the lenders have used false documents to repossess homes.
This then created headaches for the buyers of bank foreclosures as about three-fourths of court filings for home repossessions were found to be defective. One lawyer was quoted as saying this problem could persist for years it would take a decade to rectify all these errors.