Sam Gendusa March 26, 2013

Typically taking six months to over a year, the process of foreclosing on a home is becoming more and more familiar to US homeowners. Fannie Mae and Freddie Mac alone currently hold 2,600 foreclosed homes and over 19 thousand delinquent mortgages. Compared to loan modifications, foreclosures cost banks more money and have the potential to damage neighborhoods and create homeless families.

Last year, the federal government initiated a nationwide foreclosure settlement that committed banks to prevent struggling homeowners from being kicked out of their homes. The settlement made the nation’s largest banks – Bank of America, JP Morgan, Citigroup, GMAC, and Wells Fargo - end previous abuses and support struggling homeowners. The $25 billion national mortgage settlement was the largest consumer financial protection settlement in the history of our county. It allowed for cash payments to foreclosed homeowners and states, reserving most of the billions to those struggling with the housing market.

However, the government-sponsored enterprises, Fannie Mae and Freddie Mac, operate to a different set of rules. These two financial companies handle nearly half of the housing market and their preferences appear to be vastly different from our countries leading banks and the terms of the recent settlement. One way to avoid foreclosures is to decrease the borrowers’ monthly payments. Another tactic is when borrowers see principal reduced they are less likely to abandon their loans. Fannie and Freddie prefer to foreclose than write down principal. They also refuse another principal-reducing tactic –selling foreclosed homes to nonprofits that sell back to their former owners.

With Fannie and Freddie not meeting the standards that big banks have committed to, foreclosures will continue to be a common occurrence for many US homeowners. With foreclosures continuing to drag on into 2013, the need for accurate document retrieval for the real estate industry will continue to be a necessity.

If you are a mortgage professional, Blue Streak Docs can help with title policy retrieval, document recording, and property reports specific to lien position, deed-in-lieu, and foreclosure. For more information about our confidential services, give us a call today: 727-479-0007.

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