Suspension of foreclosure to add uncertainty to banks, shaky housing market?
You have to wonder about the ramifications of the mortgage foreclosure problems that have come to light in the last few weeks. Last week, it was widely reported that JPMorgan was suspending foreclosure on 56,000 mortgages due to improperly prepared documents. This news comes after reports surfaced that GMAC was suspending foreclosure on an undisclosed number of mortgages a week earlier. In the wake of two large players suspending foreclosure proceedings, doubtless other large financial institutions are now reviewing their own procedures. The probability of procedural flaws at other institutions can only be guessed at — but it certainly seems possible that other overwhelmed lenders, faced with a rising tide of foreclosure volume, may have resorted to similar procedural tactics to expedite their documentation process. Which should lead us to wonder on the foreclosure suspension front: Who’s next?