Foreclosure Probe Continues

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Wednesday, October 20, 2010 - 4:16pm

Government focuses on "robo-signing" by lenders.

The foreclosure paperwork fiasco that forced a moratorium on foreclosures by some big lenders may soon be resolved.

It sounded awful, tens of thousands of foreclosures put on hold after some lenders admitted they rushed through paperwork without careful checks.

Two years ago Lisa Howard almost lost her home to an unwarranted foreclosure.

How many "Lisa's" are out there?

Mortgage servicer GMAC now says "almost none".

Bank of America agrees.

They say their reviews did not turn up major problems.

The Obama housing team, representatives from 11 agencies, met Wednesday to discuss the foreclosure foul-up.

Housing & Urban Development Secretary Shaun Donovan was reassuring.

He says, so far, there is no industry-wide problem.

"This is not every servicer or systemic," Donovan said. "It is a problem with particular servicers who are not living up to their responsibilities."

Real estate experts say the scandal is hurting sales, making foreclosed-on houses less desirable.

"Buyers just aren't sure if they buy these homes that they are not going to end up having problems
with their title later on, even years down the road," says Trulia.com's Tara-Nicholle Nelson.

Concerned about struggling homeowners, Illinois' Cook County Sheriff froze Chicago area evictions.

"It's very tricky for me to look a family in the face and say 'listen you are leaving a house
you have been in for all your life, someone may or may not have done this legally," said Sheriff Thomas Dart.

New York state will now force lawyers to swear foreclosure paperwork has been checked, while
all 50 states and the FBI are investigating how the fiasco happened.

Administration officials say the banks' focus should shift back to helping families who want to avoid eviction or buy a home out of foreclosure without fear.
 

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