“It looked like a piñata blew up in…

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With regard to REO properties, 151,290 bank-owned properties were sold in the second quarter. This is up slightly—3 percent—from the first quarter, but down significantly, 28 %, from this same time last year.

Real estate investors take note as RealtyTrac reported that the average sales price of properties sold in some stage of the foreclosure process was more than 26 % below the average sales price of non-foreclosure properties sold in the second quarter.

Foreclosures Account for Nearly a Quarter of All Second Quarter Sales is a post from: Short Sale Daily News

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The Bank of America website said, in part, “”Bank of America has extended our review of foreclosure documents to all fifty states. We will stop foreclosure sales until our assessment has been satisfactorily completed.”

Sen. Christopher Dodd, D-Conn, and chairman of the Senate Banking Committee, plans to hold a hearing on this next month and had this scathing remark to say to the Associated Press, “American families should not have to worry about losing their homes to sloppy bureaucratic mismanagement or fraud. Regulators at the federal, state, and local levels have a responsibility to uphold the law and protect consumers from unfair foreclosure, and lenders have a duty to not cut corners around the law.”

Will the other big banks follow suit with a nationwide moratorium? They will if several members of Congress, state attorney generals and consumer advocacy groups have their way, as all are calling for an across the board, nationwide foreclosure freeze until this potential mess gets figured out. And a foreclosure freeze is the appropriate phrase of the day because it wouldn’t be surprising if robo-signers and other things in the process of coming out is just the tip of the iceberg.

Short Sale Daily News contributor Steve Hall must have a crystal ball because he hinted that there could definitely be problems in all 50 states in his article posted here on Tuesday, October 5th, entitled “Who’s to Blame?”

Stay tuned here as we bring you more on this breaking news next week and we want to know your thoughts, readers, on how this will affect the real estate market as a whole in the coming months. Watch for a brief survey we plan to post here on Monday!

Bank of America Halts Foreclosures in All 50 States is a post from: Short Sale Daily News

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• Across the country, lenders are announcing temporary foreclosure moratoria and attorneys general are calling for the same because of systemic illegal foreclosure filings and misrepresentations. Many homes were foreclosed upon based on banks’ fraudulent or inaccurate documentation. While the extent of the fraud continues to be revealed, many lenders have instituted no foreclosure stop at all, and no lender has yet issued a national moratorium.

• Research demonstrates that just as communities of color were more likely to receive predatory subprime loans, they also suffer more from foreclosures. As devastating as it has been for too many American families, the foreclosure crisis has disproportionately impacted communities of color. According to recent research by the Center for Responsible Lending, African-American and Latino borrowers are 75% more likely than their White counterparts to experience foreclosure. Moreover, the higher the concentration of racial minorities in a community, the higher the rates of foreclosure.

• Neighborhoods across America are being destroyed as a result of the foreclosure crisis. The foreclosure crisis fallout is not limited to individual homeowners. Each foreclosure has enormous spillover effects, and communities, especially communities of color, are seeing their home vacancy and crime rates increase while home values and tax bases are eroded.

• Lenders are not equipped to handle the current volume of home defaults. A foreclosure moratorium will give them a chance to develop adequate systems and capacity to preserve homeownership. The groups are calling on Congress to investigate the widespread fraud and misrepresentation in foreclosure filings, and to revive legislation that would allow loan modifications in bankruptcy court proceedings.

• All lenders must be required to evaluate homeowners for loan modifications and other solutions, with strong transparency and accountability. Lenders who participate in the government’s foreclosure prevention program (HAMP) or handle government-insured loans are already required to do so. Homeowners must also have recourse when their lenders deny loan modifications leading to unnecessary foreclosures.

Statements of Supporting Organizations:

Statement of Wade Henderson, President & CEO of the Leadership Conference on Civil Rights

“The problem of foreclosure fraud with lenders’ wrongfully manipulating essential data was entirely foreseeable. Several years ago we urged Congress to make a simple change to bankruptcy laws that could have kept countless families in their homes. If we don’t take drastic measures now, we can expect millions of additional foreclosures in the coming years, with a disproportionate number of them involving Latino and African-American families.”

Statement of Shanna L. Smith, President & CEO of the National Fair Housing Alliance

“We can draw a direct line from the history and patterns of segregation in America to the disproportionate effects of this crisis on communities of color. For decades, we have asked lenders to provide fair and affordable credit to underserved communities. Instead, these communities were deluged with toxic credit and we’re experiencing the fallout today. Our call for a national moratorium on risky subprime loans went unheeded three years ago. In the intervening time, most attempts to mitigate foreclosures have proven to be unsuccessful while more and more people defaulted on loans. We hope that our call for a national halt on all foreclosures will be implemented today.”

Statement of Hilary Shelton, Director of the Washington Bureau for the NAACP

“The foreclosure crisis has decimated American neighborhoods across our nation, and it has had a disproportionate effect on racial and ethnic minority families. Experts and scholars now project that it will take decades for communities of color to recover from the crisis. Racial and ethnic minority Americans have historically been the hardest hit by economic crises and that is certainly true today. The civil rights community warned the nation three years ago that if nothing was done to intervene that the crisis would impose the greatest loss of wealth ever experienced by the African-American and Latino communities. Sadly, this is being borne out.”

Statement of Janet Murguia, President and CEO of the National Council of La Raza

“Latino and African American families have been deeply harmed by the economic crisis through the loss of homes, jobs, and entire neighborhoods. Families continue to experience losses that extend well beyond the physical house to concerns over their children’s physical, mental, and emotional well-being, and the evaporation of the family’s financial security. Our communities were targeted by predatory lenders. As a result, more than 1.3 million Latino families will lose their homes to foreclosure by the end of the crisis. Foreclosure prevention programs are not working, foreclosure rescue scams are rampant in our communities, and now fraudulent documentation is leading to a new wave of foreclosures. Enough is enough.”

Statement of Michael Calhoun, President & CEO of the Center for Responsible Lending

“When we first issued our call three years ago, the industry responded by stating that we were crying wolf, that the foreclosure problem would be contained. They were wrong, and as a result, we have had millions of preventable foreclosures. What’s more, our research reveals that African-Americans and Latinos are almost 75% more likely to experience foreclosure than Whites. We cannot allow this injustice to continue. Mortgage servicers and lenders must work to preserve homeownership when possible; when not possible, they must follow the law when foreclosing.”

For more information, visit http://www.nationalfairhousing.org

RISMedia welcomes your comments and questions. Email realestatemagazinefeedback@rismedia.com.

The reports are stemming from a memo telling GMAC to have all brokers and agents stop everything in its tracks.  No more evictions, no more cash for keys, and even giving the earnest back to buyers in contract on properties.

According to other articles I’ve read, GMAC only wanted to audit their foreclosure procedures.  This is likely due to judicial heat on lenders like JPMorgan who have recently been accused of foreclosing on properties without real ownership of the note.

Personally, I can see GMAC actually doing this as a political move.  How so?  Keeping foreclosure inventory off the market and foreclosure sales down would make the market look better. The better the market, the better the politicians seem to be doing to save America by ending the housing crisis.

Lenders don’t seem to care how long sellers stay in the home without paying.  They are still going to get government support.  Reportedly the Federal Reserve has greater than a 25% interest in GMAC.   GMAC doesn’t want to rock that boat.   Just like welfare.  The more you give the lenders, the less they care.  But better than welfare, GMAC is at least showing their appreciation.

Just my rant on news to use.

To Your Short Sale Success!

GMAC Stopping All Foreclosures – Lender Welfare is a post from: Short Sale Daily News

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“There were two important milestones in the April numbers that show foreclosure activity has begun to plateau — but at a very high level that will not drop off in the near future,” said James J. Saccacio, chief executive officer of RealtyTrac. “April was the first month in the history of our report with an annual decrease in U.S. foreclosure activity. Secondly, bank repossessions, or REOs, hit a record monthly high for the report even while default notices dropped substantially on a monthly and annual basis. We expect a similar pattern to continue for most of this year, with the overall numbers staying at a high level and ripples of activity hitting the various stages of the foreclosure process as lenders systematically work through the backlog of distressed properties.”

Foreclosure Activity by Type
During the month a total of 103,762 properties received default notices (NOD, LIS), a decrease of 12 percent from the previous month and a decrease of 27 percent from April 2009 when default activity peaked at more than 142,000.

Foreclosure auctions (NTS, NFS) were scheduled for the first time on a total of 137,643 properties during the month, a decrease of 13 percent from the previous month when auction activity peaked with more than 158,000 properties scheduled for auction for the first time. Auction activity was up 1 percent from April 2009.

Bank repossessions (REOs) hit a record monthly high for the report in April, with a total of 92,432 properties repossessed by lenders during the month, an increase of 1 percent from the previous month and an increase of 45 percent from April 2009. Bank repossessions were less than 1 percent above their previous peak of 92,182 in December 2009.