Foreclosure Freeze Could Help Some for a Time, but Hurt Housing Market.

By David Falchek

October 12, 2010--A foreclosure freeze by some of the nation's largest mortgage-makers could help some struggling debtors stay in their homes -- for now.

For Now?? Then what? Don’t  stop until you have mortgages of every last American still clutching to that one piece of paper proving he owns something...even if only on paper! Is that when the pig has finally had its fill?

Bank of America Corp., the largest U.S. lender, extended a freeze on foreclosures to all 50 states last week on suspicion that its foreclosures were improperly filled out or were incomplete.

Are the banks doing that out of the kindness of their greedy little hearts? Or, are they swamped in paperwork?

JPMorgan Chase & Co. and Ally Financial Inc.'s GMAC Mortgage unit stopped repossession cases in 23 states, including Pennsylvania, where courts supervise home seizures, amid allegations that employees submitted foreclosure documents with unverified or false information to speed the process.

Gawd bless them one and all!

The three lenders represent a significant chunk of the foreclosures now under way in Lackawanna County. Of the 128 properties up for a Lackawanna County sheriff's sale on Nov. 16, Bank of America and GMAC have four each and JPMorgan Chase has five.

Hear that mama? Preheat the oven for the Thanksgiving turkey!

Under the gaze of states' attorneys general, their move is expected to prompt banks already flooded with defaults to decelerate repossessions as they more carefully review foreclosures before going forward. PNC Financial Services Group Inc. (You don’t mean PNAC Financial, do you? Oh, never mind.) announced it would halt foreclosure sales for a month to review documents.

Austin Jaffe, PhD, associate director of the Penn State Institute for Real Estate Studies, said while some foreclosures are being done improperly, not all of them are. No one has figured out how to help the housing market or stop the foreclosure wave.

Yeah. That's a tough one.

But it will hurt, not help, the housing markets and home values, experts say. Whether a freeze, moratorium or slowdown, the effect is the same: foreclosed, or foreclosure-worthy, properties build up a shadow inventory of homes, an overhang of the housing recovery. Banks may determine their ability to foreclose is impaired and could refuse to lend.

Yeah. Refuse to lend. Keep things movin'. C'mon! We have money to steal....er, lend.

"For lenders, the remedy for default is foreclosure," Mr. Jaffe said. "If that is taken away, it gives a disincentive for banks to be in the business of making loans. It also can give an incentive for the person trying to make those monthly payments to not try hard enough."

Are you effin’ kidding me??