Attorney Generals Stall Foreclosures

The US economy is spiraling downwards. Unemployment is at its peak. As people lose jobs, even those with excellent credit scores are faltering on mortgage payments. Hence, foreclosures are at their peak.

The Federal Government had come up with a program under which loans of homeowners are being modified, first on an experimental basis of three months and then permanently. It was thought that the program would address the needs of four million homeowners but the numbers have fallen far below the target.

Now many attorneys of states have sent notices that foreclosures be stalled because the lenders have not verified documents properly. The paperwork has been shoddy. So it can be said that the crisis has entered another phase. Already three major lenders have halted foreclosures in almost 24 states. Foreclosure sales have been halted nationwide.

The situation has raised many questions in the minds of homeowners. The first is the reason behind stalling of foreclosures. It may be pointed out that banks are reviewing the allegation. While they are doing it, they are putting a freeze on foreclosures. For instance, Ally Financial, stopped foreclosures while admitting that many of the documents have not been signed properly by the reviewer.

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