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Slowdown of Home Foreclosures in California is Not a Good Sign

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By : Bilk Albers    99 or more times read
Home foreclosures in California, particularly those in Silicon Valley, are currently seeing a decline. This downshift is undoubtedly an effect of the “robo-signing” controversy which brought lending companies, banks and other foreclosure-related companies under scrutiny. This scrutiny has forced banks to pause their foreclosure operations in order to conduct some investigation.

Florida foreclosures and other foreclosure activity around the country may be down, but housing market experts say that the trend does not mean that the housing market is improving. In fact, this decline may have the opposite effect on the housing market. Experts say that a decline in foreclosure activity is simply postponing the day when the Real Estate market truly gets back on its feet.

Experts believe that the decline of home foreclosures in California is nothing more than an extension for homeowners who are unable to save their homes because of too much debt.

Since 2008, Florida foreclosures and other foreclosure activity in the country have been experiencing the “bottleneck effect”. This effect was primarily caused by government intervention followed by lender misconduct. The holidays ordinarily cause a slowdown in the foreclosure process, but there is no doubt that the “robo-signing” controversy also plays a major role in the delay.

Robo-signing is a misconduct that occurs when foreclosure company employees automatically sign thousands of foreclosure documents without verification. This wrongful operation led Bank of America to order the investigation of banks and other lending companies around the country. While these investigations are underway, all foreclosure activity has been put on hold.

Thankfully, speculations state that the Bank of America plans to continue processing foreclosure cases. The bank will begin with vacant properties or properties with no occupants.

Not only does the foreclosure bottleneck delay the possibility of true progress, but it can also stand in the way of fast home sales.

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