Tampa Palms, Westchase, Carrollwood and Tampa Bay Real Estate News From Jeanne Prigitano

I’m sure that you have heard by now that some of the major banks have put a halt on foreclosure proceedings. It appears that many foreclosures were processed without the proper review or signatures.

For some distressed homeowners this is a great thing. It may give them time to get much needed help from the banks through loan modifications or other government programs or give them needed time to get on their feet and begin paying their mortgages once again.

So, is it really good or are we just delaying the inevitable? Won’t most of these homes still go into foreclosure anyway? Haven’t some distressed homeowners already moved on?

It seems that not only have the lenders stopped foreclosure proceedings but they have also stopped foreclosure sales. I heard a situation last week where the homeowners had long vacated the home. The bank foreclosed and then placed the house on the market. The buyers were at the closing table when the bank stopped the sale. Tell me. Who benefits? Not the distressed homeowners. Not the buyers. The foreclosed homeowners were already living somewhere else and now the buyers are homeless. The neighborhood has a vacant home that is not being maintained and is bringing down the value of the other homes.

As I’ve said in previous posts, there are many distressed homeowners who need and should be helped. It pains me every day to see what is happening. In most of the foreclosed cases that I have seen, the homeowner hasn’t paid their mortgage in over a year. Delaying the inevitable is not the answer. The only way we will eventually see a housing recovery, and subsequent economic recovery, is by getting the distressed homes sold to buyers who will be able to pay mortgages, maintain the homes and contribute to the neighborhood. By delaying the foreclosure, the distressed homeowner will take that much longer to improve their credit status and economic situation. Eventually most of these houses will still be foreclosed on and sold. We are just creating a greater backlog and delaying any sort of recovery.

We were finally beginning to see some improvement in the housing market. Inventories were beginning to level out to a more balanced market. Prices were starting to stabilize. Now many pending bank-owned home sales may be in jeopardy and a huge backlog is being created. Who knows how this will affect short sales. Homeowners need to be helped. But stopping the sale of vacant abandoned houses over some clerical errors is just crazy!