Banks in all fifty states have halted foreclosures because of allegations of improper handling of paperwork. This has had adverse effects to the already-bad housing market. The shakier the banks are, the harder it will be to get a loan and the less likely that people who would normally qualify for loans can now get them. In a market where sellers are many and buyers are scares, the banks are essentially cutting off the only potential solution at the knees. Not to mention the infuriating possibility that a family could have been wrongfully foreclosed on.
It Gets Worse
But it gets worse for banks and, ipso facto, the entire industry. Banks now have to deal with investigations from the attorney general, SEC, and the Justice Department. This means that they are even further away from lending than we thought, which, in turn, means that the housing market is not getting stronger any time soon.
In the long run, banks have learned a valuable lesson about how to handle their loans. But in the short time, it won’t be any easier for people to find lenders. If you can qualify for a loan in these shaky times, you have the pick of the market, and a flood of foreclosures will hit soon. Finding a mortgage you can afford is the tricky part.
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