Realtors Feel Impact of Foreclosure Moratorium

Realtor associations have reported delays in escrows and the removal of listed foreclosures as a result of the moratorium on foreclosures currently taking place, according to the California Association of Realtors. A number of major banks including Bank of America, Wells Fargo, Chase and Citibank have volunteered to temporarily suspend foreclosures in 23 states as part of a process to review and standardize procedures. Bank of America is temporarily suspending foreclosures nationwide and so far is the only bank that has extended its foreclosure moratorium to California, where the vast majority of foreclosures are conducted without a court order. Foreclosures in the other 23 states are processed through the court system. According to the California Association of Realtors, the immediate impact of the moratorium on the market will be the slowing of home sales, which could put upward pressure on home prices in the short term. The long-term effect on the market is uncertain, as it depends on how long the moratorium remains in place. Realtor associations have expressed concern that the uncertainty created by the moratorium may cause hesitation on the part of buyers. Conversely, they are supportive of lenders taking action to ensure the elimination of improper foreclosures. Jill Furtado, president of the Greater Antelope Valley Association of Realtors (GAVAR) said they are not only concerned that homeowners/borrowers were contacted appropriately by the banks to discuss options for them to avoid foreclosure, but, in fact, for these banks to verify that they actually owned the mortgages they foreclosed on. “A vital aspect of our market is for title companies to be able to provide clear title (proof of ownership) to properties. Some of these loans have been sold-off many times, even to multiple investors. We hope the moratorium doesn’t remain in effect too long, however we’d like to see the issues fully resolved.”