Foreclosure delays leave some in limbo

Families across the country have had to postpone their moving plans while several major banks still work to investigate their internal foreclosure procedures.

That's because for many families, distressed properties are the only homes that are within their price range, and stalled foreclosure sales are leaving many with few alternatives to turn, reported North Carolina's Charlotte Observer. Further complicating matters is the fact that no one can predict how long many of the foreclosure delays will take - lender Bank of America has resumed foreclosure sales in most states, but Ally Financial is still conducting its internal reviews.

Experts say the delays likely took a large dent out of home sales activity last month, since many still have to rely on discounted foreclosures to purchase a home - particularly first-time buyers, said the report. They are an important part to the housing recovery because they can take a home off the market without adding a new property to the nation's housing inventory.

"We're going to see a sharp drop in October home sales as a result of foreclosure sales being put on hold," Guy Cecala, publisher of Inside Mortgage Finance, told the paper. "And as you know, we're already at anemic levels."

Recent reports have highlighted the importance of foreclosed sales in first-time homebuying. Campbell Surveys reported last week that fewer first-time buyers are moving into new homes without the incentive of the homebuyer tax credit, and analysts expressed concerns that extended foreclosure delays would further alienate those buyers.
 

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