Following the controversy surrounding lenders' alleged use of faulty affidavits in pursuing foreclosures, housing market observers have reported that the supply of foreclosed houses and condo foreclosures for sale has declined considerably, particularly in areas hardest hit by the housing market crisis.
In major states like New York, Bronx distressed homes and other foreclosure types for sale have declined right after the issue with lenders' processing of foreclosures. Market observers have reported that the impact is evident mostly in the diminished number of foreclosures being offered at auctions in various parts of the U.S.
Although New York distressed properties being offered for sale have declined, analysts reported that the impact of the controversy is not felt too keenly in the state compared with areas that have been hit hardest by the foreclosure crisis like Nevada, California and Arizona. Among these three states, foreclosures for sale numbers have reportedly dropped by over 30%.
Analysts have stated that the decline in the number of foreclosed houses and condo foreclosures for sale demonstrates how banks are finding it hard to get back on the foreclosure trail after allegations that they have been using robo-signers to speed up the process of foreclosures. In big cities of the U.S., foreclosures being auctioned off have reportedly declined from a high of 500 daily to 300 per day.
Realtors specializing in finding distressed properties for sale that they can recommend to investors have revealed that prior to the robo-signing controversy, an average of at least three foreclosed properties are found each month. However, after the documentation issue, most of them find it difficult to get even a single suitable property to recommend.
The decline in the supply of foreclosed properties has been largely attributed to the temporary freeze implemented by several lenders on the sale and processing of distressed homes all around the country. Even when the suspension was lifted, lenders are still unable to jumpstart the foreclosure selling market, mainly because most of them are now taking longer time to process distressed properties.
In addition, analysts believe that owners of foreclosed homes and condo foreclosures for sale have gained momentum from the controversy and are now more aggressive in their battle against lenders who are trying to foreclose on their homes.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.
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