Big Bank Foreclosure Delays Signal Big Trouble

Banks are already holding back inventory as a shadow inventory because they don’t need the cash – they’ve got OUR cash.

But another problem may be looming for banks trying to actually foreclose and get properties back.

According to CNBC, JP Morgan Chase told CNBC on Wednesday that it will delay more than 56,000 foreclosure proceedings due to paperwork that was signed, “without the signer personally having reviewed those files.”

That came on the heels of GMAC halting foreclosures and evictions in 23 states for roughly the same reason. All this leads anybody with a heartbeat to figure that other large servicers will likely follow suit, as potential lawsuits abound.

So what will that mean to the larger foreclosure crisis and the already weakening housing recovery?

“It’s clear the pace of foreclosures will slow down,” says Laurie Maggiano, Policy Director in the Treasury Department’s Homeownership Preservation Office.

“I would suspect that most responsible lenders are going to be looking at their processes and making sure that they’ve done everything properly, so they’re not subject to the same accusations and lawsuits.”

Read more —>>> http://www.cnbc.com/id/39441529