In order to check that because a program error or fraud that may exist in the case of defects, a large mortgage company to suspend the foreclosure process, this announcement as they are already weak real estate market is weak injected new uncertainties. Wharton faculty and real estate analysts say, even though not many in this examination will be withdrawn foreclosure homeowners, however, the check for the real estate market has added confusion, but also delayed the troubled market recovery.

In this troubled industry suffered many defeats, it is subject to foreclosure confusion is the latest blow, and took place in a new generation of potential home buyers own their own homes to rethink the traditional dream of when the mouth. For a large part of people to buy houses and do not have much significance. Own their own homes in other areas will reduce the flexibility of looking for work, while also taking up more of the investment products available for purchase the first payment. “In the housing market boom, we have forgotten the experience.

Found that employees in violation of procedures, trying to casually handle foreclosure cases, the United States in the leading three home mortgage services JPMorgan Chase, GMAC and Bank of America – in 23 states to suspend further action, the state requires that only ransom cases need to be subject to judicial review. Bank of America, a robo-signer (usually thick foreclosure hundred pages of documents, there are dozens of signatures required, “signature robot” came into being. Their daily job is to sign a document 50-150, in addition to the date , they, like robots, not verify the contents in detail, it got its name) admits that, despite legal requirements, the signatory must personally review all the documents, but he signed up to a month or 10,000 foreclosure cases . Subsequently, Bank of America extended in all 50 states temporarily stop the foreclosure process time.

Wharton real estate professor Susan Wachter that because of the foreclosure freeze foreclosure can not get into the real estate market, and provided to some families to raise enough money to keep their homes is another opportunity, so This measure may temporarily boost the housing prices. However, she also said that most of the current freeze on foreclosure cases will eventually thaw. Therefore, “now measures only delay the process of cleaning up the market.”

Wharton real estate professor Georgette Chapman Phillips talked about, even though she no longer call it fraud, however, lenders may indeed have committed the fault of forged documents. She also added about, delay or cancellation based on the error file the foreclosure process, would create new moral hazard, which could cause more homeowners to stop to pay its mortgage. “This is the secondary market by the banks and created terrible confusion. While lenders so-so, but borrowers do not claim to fraud in the loan process. We can not ignore the entire mess, the in the most the bottom are those for failure to pay the mortgage and lost foreclosures homeowners. ”

Key drivers: employment

Located in Irvine, California real estate data company RealtyTrac said agencies in the United States more than 120 million cases backlog in the foreclosure process the loans, there are problems just one part of the case. In addition, another 90,000 were repossessed property remain in the lender’s book, at the same time, there are more than 500 million loans were seriously delinquent. The National Association of Realtors said in August, including real estate foreclosures, including distress sales accounted for 34% of all home sales.

Wharton real estate professor Joseph Gyourko spoke: “The only way to straighten out the house prices is digested the backlog of foreclosure real estate, but you need to solve this problem a long time, which is a need to process several years. “He added said that in all the housing in the United States, 20% to 25% of housing value, lower than the homeowner owes the lender the loan value. “Everyone of them may default on their loans, foreclosures are likely.” Jiao Ke that although the housing market has always been highly cyclical, however, the moment, the market prospects for recovery activities by a very weak overall market barriers, housing starts both of these activities, including sales. In addition, the market is different from the past depression status, because now the market is not only driven by the imbalance in the field, but also by the macro-economic issues. “The market recovery different from the past, will be slower than normal job growth … … unless otherwise, the housing market activities – buying and selling of housing activities – does not restore the economy.” Watchet expressed agreed: “The housing market is still the key drivers of employment.”

RealtyTrac’s Rick Sharga, senior vice president of the view that the recent foreclosure problem is the embodiment of breach of trust, but “breach of trust” on the final settlement of the foreclosure problem is not affected. “In fact, foreclosure is a temporary delay to resolve the issue.” Shaer Jia predicted that the foreclosure problem on the detailed inspection may be extended 60 days to 90 days. Mortgage research firm Access Mortgage Research & Consulting Company believes that the review time will delay foreclosure problems 6 months to 18 months, and delay the adjustment of housing prices as a long time. JPMorgan Chase & Co. disclosed, the company is examining 56,000 foreclosure cases, but other companies have yet to indicate the number of foreclosures in the end the case will be delayed. The largest number of foreclosures states including California, Nevada, Arizona and Michigan, in these states, the lenders the right to recover the property without going through formal judicial review process.

RealtyTrac’s data show that in August, the United States has 338,836 cases of property owners received notification letter mortgage foreclosure filings – which include default notices, auction timetable and inform the bank to recover the property, which than the number increased by 4% in June, compared with August 2009 but the number decreased by 5%. August, 381 properties have each received some form of a mortgage foreclosure notification letter. Shaer Jia believes that the number of banks to recover the property peak in 2011, “2012 will be slightly improved the situation … … in 2013, with the handling of excess real estate foreclosure process continues to evolve, we will see, only the case will significantly reduce the ransom. ”

Shaer Jia said that now, 90 million in the bank-owned foreclosure homes, only one third of the flow to the market. Bank of the reason these properties remain in the book, because the processing of documents the work of the wasted time, but also because the state law, the sale of these properties need to 6 months later, in order to repay loans to the owner one last chance. Shaer Jia mentioned that another factor is that banks do not want to get foreclosure property ownership, because the new accounting requirements, the value of housing according to the current market price assessment. In many cases, assessment of housing in this way the value will be lower than the value of loans outstanding, which is not conducive to the Bank’s financial statements.

While some forecasters believe that the so-called shadow inventory, there are as many as 800 housing units waiting to enter the market, however, RealtyTrac estimates that this financial crisis because the distressed properties change hands up to the total number will reach 300 million units to 3.5 million sets. Watchet that people buy in a foreclosure sale of the housing program, will seek more than the normal transactions between homeowners 40% to 50% lower price.

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