While 23 states have already initiated foreclosure moratoria and launched probes into the foreclosure process in the cases of all lenders in those states, 17 more have expressed interest in joining the probe thanks to the coordinated efforts of state attorneys general across the country. In Indiana, for example, AG Greg Zoeller, chairman of the Consumer Protection Committee of the National Association of Attorneys General, is working with Iowa AG Tom Miller to expand the probe into Indiana, even though it is a judicial foreclosure state and, therefore, was already part of the first wave of moratoria that swept across the country last week. 17 additional non-judicial foreclosure states are “interested” in joining the probe and their AGs are working to join.
With mid-term elections around the corner and everyone’s motives in play – and in doubt – investors are simply pleading for legislators and law enforcement everywhere to consider what they are doing rather than getting swept away in the foreclosure freeze “craze” that is sweeping across the country. According to statements by Tim Ryan, president of the Securities Industry and Financial Markets Association (the biggest lobby on Wall Street), “a complete halt would be catastrophic for the U.S. economy and hurt home sales.”
Already, in Indiana, agents are reporting “houses with multiple offers but no response from banks” as the lenders struggle to deal with the moratoria – some self-imposed – and continue to sell REO property when possible. We do have a lot of houses for sale after foreclosure,” adds IN real estate agent Laura Musall, “and we have people who want to buy them.”
However, for the time being, those houses are going to “sit empty…deteriorate [while] the values go down” and buyers who cannot afford to wait forever on the lenders to approve the offer move on to more fruitful investment opportunities.