Some Foreclosure Cases and REO Sales Being Halted – Florida to See Brunt of impact

Everyday brings a new story of a lender halting foreclosure cases, and now several are halting REO sales as well. Real Estate Asset Disposition Corp., at the direction of its bank clients, have had REO closings suspended by major lenders due to "the assets coming from a pool known to have title issues"

We are in uncharted territory with the uncertainty of the foreclosures. As some point however, common sense should prevail. Lenders agreed to lend and borrowers agreed to repay those loans and it is the failure of the promise to repay that leads to foreclosure.

This basic concept is getting lost in the noise of how intimate the knowledge was of the banker who signed the documents to start the foreclosure. The terms in the note and mortgage stipulated that lenders lend and borrowers borrow and repay. And, the recourse for not repaying is foreclosing out of the borrower’s property rights.

Contrary to what the new crop of foreclosure defense firms will say, there simply are not a lot of legitimate defenses for non-payment. While there are true hardship cases and even more poorly thought out purchases, these are not defenses to foreclosure. Sooner or later, these same cases will complete the foreclosure process and will be resold.

One silver lining to the temporary halt is that the existing REO properties that are sellable may experience appreciation, as the available volume is stunted during this period of uncertainty. Our REO properties in Miami, Ft. Lauderdale, West Palm Beach, Port St. Lucie, Orlando, Tampa and Jacksonville have been selling quickly this year. And now with the flow of new properties being slowed, the existing ones should be even more marketable.