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Banks Blamed for Rising Foreclosure Short Sales and Repo Houses

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By : John Cutts    99 or more times read
More and more homeowners are losing their properties to foreclosure short sales and bank repossessions in various parts of Ohio. Some homeowners have argued that this is happening not because more borrowers are defaulting on their loans, but because banks are misleading borrowers.

Cincinnati repo homes and foreclosure numbers in other parts of the state continue to rise and homeowners are pointing a finger at lenders. According to some of them, they were paying their loans on time, but when they decide to sell their properties due to a need to move to another place or due to expected financial troubles, they were advised by lenders to miss payments to qualify for modification or short sales.

The problem, homeowners have revealed, is that once they miss these payments as instructed, banks inform them that they still failed to qualify and will then foreclose on their houses or add them to the already high number of Ohio repo homes. Such cases, according to consumer advocates, have become more common not only in the state of Ohio, but in the rest of the U.S. as well.

An investigation launched by a local newspaper showed that in more than 500 foreclosure cases in Franklin County alone, 15 homes were foreclosed while their owners are still in the process of negotiating for mortgage modifications or foreclosure short sales. The data covered the period September 1 to October 15 and allegedly involved lenders such as Chase, Citimortgage, Wells Fargo and Bank of America.

Housing experts have reported that repossessed properties for sale are rising mostly because of carelessness in the part of lenders. According to them, banks usually have one unit negotiating with homeowners for a short sale or a modification, while a different unit is handling foreclosures, with the latter often left unaware of the ongoing negotiation between the borrower and the bank's mortgage modification unit.

Furthermore, analysts stated that various lender units have failed to communicate with one other and with the troubled homeowners they are supposed to be helping. The success of a homeowner's attempt to get his loan modified or sell his property through foreclosure short sales often depends on whether that homeowner can get the same representative on the phone twice, analysts have added.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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