Bank of America and Wells Fargo have joined JPMorgan and GMAC in halting their foreclosure proceedings until their files and processes are reviewed.
Regulators from the office of the Controller of the Currency have instructed 7 major banks to review their procedures after the news. According to our sources included banks were: HSBC, Citigroup Inc., PNC Financials Group Inc., US Bankcorp (USB), and others.
In addition, Friday one title company (Old Republic National) said it would stop underwriting title insurance for homes foreclosed by JPMorgan Chase and Co. and GMAC until the questioned documentation is cleared.
Some sources believe this will bring home sales to a halt. We think this is an overstatement, that only the Foreclosure sales will show much impact. The Short Sales might see some drop as owners hope for a miracle. Equity (or normal) sales should not be negatively impacted. In fact, they might even see an increase in as the Foreclosure market dries up even if only temporarily.
Sources include: NAR (10/04/2010), The Wall Street Journal (10/01/2010) and Reuters News (10/03/2010)