The Bank of America Corp. has delayed foreclosures after a federal regulator called for a review. This is due to the suspect of lenders submitting defective documents when repossessing homes. The Bank will carry out an investigation process where "tens of thousands" of documents will be studied and the process will take from "several days to a couple of weeks."
Meanwhile, JP Morgan Chase & Co. and Ally Financial Inc. employees may have submitted affidavits without confirming their accuracy - the court documents reported. It leads to the case that such practices could amount to fraud and JP Morgan has said to ask judges to postpone foreclosure in response to the situation.
This even further the problem of the housing market, add the inability to sell properties and declining property values. Moreover, the economic downside from this problem is even more monumental.
In response to the case, the State and Federal has taken steps to carry out some investigations about home lenders and loan services taking shortcuts to speed foreclosures.
In a time when the housing market is rebounding, the problem posed by banks speeding up foreclosures is counteracting this effort. This adds to the homeowners' inability to sell their houses, and as a result, the value of their homes declines steadily. After the collapse of the housing market in 2008, there has been some progress in re-establishing this sector of the economy; however, by submitting faulty foreclosure documents, big financial companies like JP Morgan Chase & Co. are actually taking away from this progress and discouraging consumers.
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