Foreclosures Halted

Maybe this week's headlines will allow distressed homeowners a short breather while the banking industry figures out what's going on. Maybe... 

Several large banks, including Bank of America, have reportedly halted the foreclosure process in 23 states while it investigating whether or not there were flaws in past proceedings.  No estimate is given in the article as to how many homeowners will be affected, but I'm sure it's a large number.  JP Morgan Chase reports over 50,000.  Read the full article here:  http://money.cnn.com/2010/10/01/real_estate/Bank_of_America_halt_foreclosures/index.htm

JP Morgan-Chase also announced it was stopping the foreclosure process after learning some files may not have been properly reviewed.

A statement last week from mortgage lender Freddic Mac said, "It is essential that the industry work together to protect borrowers' rights and ensure the integrity of the foreclosure process."  

Shouldn't they have been doing that all along?   What happened to the Home Loan modification programs set in place what... like, 3 years ago now?

The Wall Street Journal recently reported that fewer than 500,000 loans have been modified -- nowhere near the targeted 3-4 million loans that were eligible.  

While this will slow the inventory "dump" in to some markets, keeping prices stable, the effect of headlines such as this is the continued stalling of buyers who could (and should) be writing offers on existing inventory.