Bank of America Stops Foreclosure SalesCHARLOTTE, NC - Bank of America’s foreclosure fix could cause more problems for the already struggling real estate market. The nation’s biggest bank is halting sales on foreclosed homes in order to go back and check foreclosure documents for possible errors. Friday’s decision means some of the more than 7,000 foreclosed homes on the market in Mecklenburg County are in a state of limbo. Bank of America executives recently admitted that employees signed foreclosure documents without verifying the information on them.
“Banks are going to have to slow down and individually look at foreclosure files the way they should have been doing all along,” said UNC Charlotte Finance Professor Tony Plath.
Plath and other experts say the effect of putting the brakes on foreclosure sales will likely create another housing bubble problem once many of the homes go back on the market.
“We end up having a major dip in value because there’s that many more foreclosed properties and a glut of properties in the marketplace, which has a negative effect on price,” said Eric Locher, Treasurer of the Charlotte Regional Realtor Association.
Locher says a drop in consumer confidence is also likely. “If you have one thousand homes on the market and suddenly there are eighteen hundred homes on the market, people will sense ‘everywhere I drive there’s a for sale sign.’ And, it ends up being buyers are concerned they’re going to buy today only to see the price go lower tomorrow,” he said.
Bank of America is halting foreclosure sales in all fifty states.
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