Foreclosure crisis spreads to originations
The national foreclosure crisis has resulted in loan closings being scuttled in some regions, and fears are mounting that, if the situation is not soon rectified, it could damage the one area where lenders are reaping stellar profits: originations. John Walsh, the chief executive of Total Mortgage Services LLC in Milford, Conn., said Connecticut's recently adopted 60-day, voluntary moratorium on foreclosure sales caused his firm to scrap REO-related closings during the past two weeks and that more cancellations are in store this week. "The unintended consequence of this is that some people won't get to buy houses," he said. "This is not a good situation." If Connecticut Attorney General Richard Blumenthal obtains a binding 60-day moratorium on foreclosures in the state, further delays in closing REO transactions could be the consequence.