Foreclosure controversy impeding home sales

Some homebuyers nationwide have had their moving plans derailed by the recent national foreclosure crisis.

For instance, as many as a third of home sales in Jacksonville, Florida, could be put off for at least three months, reported the Florida Times-Union, because lenders are stopping foreclosure sales in a number of states while they investigate their own procedures. The mortgage mess started with reports that so-called "robo-signers" - employees of major mortgage lenders - were signing off on foreclosure sales without carefully reviewing their contents.

A number of lenders, including J.P. Morgan Chase and Ally Financial, have suspended foreclosures in the 23 states that require court approval for a sale. Bank of America announced last week it would suspend foreclosure sales indefinitely in all 50 states.

Florida-based real estate agent Ed Forman told the Times-Union that many consumers buying foreclosed homes would either seek contract extensions on their home purchase or walk away from the deals altogether. Distressed properties are popular among relocating families for their lower price tag.

It is unclear how the lender actions will affect the national moving market, but reports suggest real estate closings could peter off significantly. A recent report from RealtyTrac indicated that 24 percent of national home sales came on foreclosures.
 

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