Foreclosures suspended: Take this opportunity to Spread the Word of Optimism!

Foreclosures suspended: Take this opportunity to Spread the Word of Optimism!

Foreclosures Suspended: Take this Opportunity to Spread the Word of Optimism!

This last week, Bank of America has decided to suspend foreclosures for an indefinite amount of time while they clean up their books and make sure they are doing the process right and get caught up on this overwhelming task. This should open up a big door for some people in a lot of different situations and in my opinion could help the overall Real Estate market and maybe economy as a whole.Rose colored glasses

Bank of America was the first to announce the foreclosure suspensions for all 50 states, but many other banks are talking about it and some have done it in a majority of states. Foreclosure suspension in it's simplest form postpones the process of a home going to auction. There are 3 specific homeowner situations that popped into my head when I heard this, it represents a big chunk of people these days and it should help all of them a lot.

The first is the Homeowner who is close to foreclosure and has given up hope for a short sale because the foreclosure was imminent. This situation is more predominant than you think. A homeowner falls behind and by the time they figure out the steps to help themselves out of it, there is a sale date and they feel like it's too late. So why even try right? With this Foreclosure suspension, this group is given a window of opportunity to ask the bank for a short sale plan. Banks have become much more accommodating on this and I assume will even get more so as this suspension plan goes into effect. If this is you please contact a Realtor as soon as possible and learn your options. Short sales are much better for neighborhoods than foreclosures and for the individual doing the short sale can feel much better than losing your house and certainly is better for your credit.

The next group even more encouraged by the suspension of foreclosures. It is a group of people that have been either fighting through the modification process or like the group above thought the foreclosure was too close for them to begin this process. A modification of the loan can restructure the loan with either longer terms, lower interest rates and puts existing balances at the end of the loan. This usually provides the homeowners with a lower payment and kind of a start over refresh with their loan. This is perfect for a homeowner who had financial troubles like a job loss but has since gotten themselves in good shape but just can't catch up. The government has set up for this and there are a lot of incentives for banks to make these work, so check with your bank on this option or check with a great Realtor to help you understand it.

The third group, and this certainly is my most optimistic side speaking, but I do think it's true. For every report I hear that the world is ending and a statistic that shows that things are not getting better, I am seeing articles that show statistics, surveys and reports that show that things are getting better. I feel that a lot of the negative reports are politically driven and maybe the positive ones are as well, but even if some of the positive news is true, then at least some people's situation may change. Some of the reports I have seen have said that small business owners in Colorado feel like the worst is behind them and this may be a year for growth. So maybe it's a slight bump in hiring, maybe it's a tick up in buyer confidence that makes inventory go down quite a bit while these foreclosures are suspended. Maybe it's a continuation of government infrastructure spending that bring some communities back from the dead. Let's do remember that we have an incredible buyers market and interest rates literally at their lowest ever. It won't take much to start some dominoes falling that may get things rolling, and maybe this foreclosure suspension can give this small bit of breath the economy needs to get it's wind towards recovery. And it can all startwith Real Estate, the culprit that most blame for the recession. If any of this is true then maybe someone that was going to get foreclosed on can keep their job, or get their Christmas bonus or get their short sale sold and we could all really benefit.Optimism

A lot of people(Realtors especially) that I talk to, look at the foreclosure suspensions as a negative that will just add a big bubble out there still yet to pop. I suppose it's possible, especially if all Real Estate agents feel that way. But for those of us who look at things with rose tinted glasses, I think this bank strategy that was kind of created out of a negative could be turned around to a positive. At the very least I think it will help a lot of homeowners out that are informed and have the opportunity to use this time for what it can be. At the most though, this could turn into the straw that broke the recession's back. Stay tuned.

Damon Knop     303-332-8754      Distinctive Properties, LTD     Yes You Can Affordable Connection Team


This is an excellent post, and I agree with you -- this is an excellent opportunity to spread some positive news!  Hope this is featured for all to see!

Posted by Tish Lloyd, Broker - Wilmington NC and Surrounding Beaches (BlueCoast Realty Corporation) about 8 years ago

Good post summarizing BofA's recent announcement. Not sure it's that great. I just wish they would get on with their business. They won't disappear, and the sooner we own up to it the sooner the market will turn around. It is my understanding that part of the problem has been the mountainous amounts of paperwork the banks just are not staffed for.

Posted by Buki Burke, (805)377-0236, Berkshire Hathaway Home Services CA (Ventura, California) about 8 years ago

Thanks for the post on the latest Foreclosure news. You put a good spin on it and show some positive light by providinga selection of scenarios in which it could be beneficial. Thank you.

Posted by Tina D Saporito, Your Dedicated Palm Desert, CA Realtor Since 2005, Call (760)799-8460. (Ronald Christopher & Associates. Proudly serving Palm Desert, La Quinta, Indio, Rancho Mirage, & Palm Springs.) about 8 years ago

Time will tell if the hold on foreclosures is good or bad.  Be that as it may, it is sad. 

Posted by Barbara Hensley, Homes for Sale in Rockwall County, Texas (RE/MAX Properties) about 8 years ago

Thanks for the feedback. Buki-I have heard that too about the banks being backed up and it's quite obvious if you go through one of these deals. But maybe a little time will let them catch up and maybe even hire some more help to do it right and more expeditiously. Barbara-I agree is it sad.

Posted by StapletonHomeTeam KnopHomeTeam Distinctive Properties, For an UnReal Estate Experience call the Knop Home (Distinctive Properties) about 8 years ago

Yes, great news for distressed homeowners facing difficult loan mods and short sales.

Posted by Brian Bean, Homeowner Advocate, Dream Big Real Estate, S.Calif (The Dream Big Team at Realty ONE Group Champions) about 8 years ago

Got an email message from a very trusted BOA LO today.  They are saying this is not a moratorium and they a re expected to resume foreclosures by Nov 1 or sooner.

Posted by Renée Donohue, Las Vegas Real Estate Broker - (Savvy Home Strategies Realty, LLC-REALTOR®-Estate-Probate) about 8 years ago

Damon,we here in the northeast are still waiting for this mess to clear up.Time will tell.Thanks for all the info in your article.I am hoping that the mess is over soon and we can start selling homes again.That is the only way to stimulate some sort of market.

Posted by Jim Hazell (Real Property Inc.) about 8 years ago

Honestly, in the long run, this will have almost zero affect.  It will mean that a few people will get to stay in their home a couple weeks longer. 

Posted by Lane Bailey, Realtor & Car Guy (Century 21 Results Realty) about 8 years ago

"Let us help you finance your dream," I've heard one popular bank slogan advertise. 

Oh brother.  Can freedom be financed now?

Posted by Keith Sellers, Greater Kalamazoo and Lakeshore (Sellers Real Estate) about 8 years ago

I completely agree.  One more positive too:  the avereage home seller who has a well-maintained home, competitively priced, but was unable to sell before since there was so much competition from lower priced foreclosures on the market.

Posted by Kelly Fisher about 8 years ago

Sorry, I have no nice way to say this...I couldn't disagree more.

First, your home state of Colorado is not one of the 23 judicial foreclosure states affected by the flurry of serious and significant law suits in fully accelerating take-off mode across the country. Friday's BofA announcement is simply a way to manage the publicity surrounding problems of affidavit in previously foreclosed home in the 23 judicial foreclosure states*. Colorado is not one of these states.

To suggest that clients should apply for a short sale and take advantage of this (short term) moratorium sounds naive at best and possibly irresponsible at worst. I would strongly recommend that you avoid giving this sort of legal advice to anyone, regardless of their state of residence, and I certainly think you should avoid giving such advice on a national platform such as Active Rain.

* Connecticut, Delaware, Florida, Hawaii, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Nebraska, New Jersey, New Mexico, New York, North Dakota, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota, Vermont and Wisconsin."

Posted by Leslie Ebersole, I help brokers build businesses they love. (Swanepoel T3 Group) about 8 years ago


 I am aware that this is not in Colorado because we use a public trustee system. I am confused at what advise you think is naive? To not succumb to foreclosure especially if you are in a better financial situation now? To not try to sell if you have a window of opportunity, even if it's small?

A lot of what has put people into this situation is not knowing their options, I know you have seen several foreclosures that never had a sign in front. Sure some are people just "riding it out" but between ARMs, the economy and very poor bank communication, I figure it's the least I can do to help people understand some of the possibilities that they may have.

I agree that I may be in a bit of the minority to have some optimism, but I don't see the harm in trying to spread it.

Posted by StapletonHomeTeam KnopHomeTeam Distinctive Properties, For an UnReal Estate Experience call the Knop Home (Distinctive Properties) about 8 years ago

Optimism is good, and thanks for spreading it.

However, the advice that I give has not changed:

If you are behind on Mortgage Payments, or are Facing Foreclosure, or have been served Lis Pendens or other Legal Notice, or are thinking of pursuing a Short Sale, or are considering a "Strategic Default" :

Seek the Legal Advice of a Real Estate Attorney, Financial Attorney, or other qualified Legal Professional. 

For Tax and Financial Advice, consult a Certified Public Accountant, Tax Attorney, or other qualified Financial Professional.


Posted by Fred Griffin, Licensed Florida Real Estate Broker (Fred Griffin Real Estate) about 8 years ago

Anything at all, small or large that can help is better than nothing. Even if this only lasts a month it'll help some people and that's what counts.

Do not however expect this to be the major turn around in your real estate career.

Posted by Corinne Guest, New Homes Specialist (Barrington Realty Company) about 8 years ago

I am hoping that this will have a positive effect and that it will help some people out, though I feel that this just prolongs the issues.

Posted by Christine Donovan, Broker/Attorney 714-319-9751 DRE01267479 - Costa M (Donovan Blatt Realty) about 8 years ago

Damon, thanks for writing this optimistic post.  I truly hope that this window provides a glimpse of blue skies.

Posted by Sharon Parisi, Dallas Homes (United Real Estate Dallas ) about 8 years ago

Homeowners need to understand all of their options.  For those that are considering a strategic default, they need to seriously look at principal reduction options

Posted by MJ Anton about 8 years ago

Great article.  These banks, Bank of America at the forefront cannot get any of this right. Everything that has been done defies practical wisdom.  They have made the loan modification process a disaster,why?, because, as it turns out they make more $ by allowing a short sale or foreclosing.  We, realtors, always argued, that they did not want to foreclose, they would lose more $ by doing that. That was before HUD and the feds started compensating them for their loses!!  A loan modification client is damaged goods to them!  Deferring past due payments is money that will be collected in the future, getting paid by the government for the loss at the close of escrow is a lot quicker and more profitable!!

Posted by Tj Stroben about 8 years ago

I am glad to see some logic and rules finally inserted into this chaotic piece of the pie.  Time will tell if it has any lasting, positive impact.  I sure hope so.

Posted by Chris Olsen, Broker Owner Cleveland Ohio Real Estate (Olsen Ziegler Realty) about 8 years ago

Do you think it will spiral? I mean, since one bank announced it... the possibility more will step up to the plate and follow suit throughout the whole nation? This is good for homeowners, which is great. But, for those who may have already gone under contract for a foreclosed home, what are agents and their clients to do? Do the banks pay the buyer for the mix up? or those that were prematurely foreclosed upon? or both? (just sharing my thoughts and questions, id love to hear your feedback)

I love the idea of looking at things optimistically by the way. through rosy glasses as you put it.

Posted by Ryann Marzouk (Keller Williams) about 8 years ago

I've been looking at the situation as a negative since the bottleneck of foreclosures will end up creating a larger supply down the road.  Perhaps you are right that this will give many time to work out short sales or modifications.  Time will tell how this plays out.

Posted by Frank Castaldini, Realtor - Homes for Sale in San Francisco (Compass) about 8 years ago

While those positives certainly could happen, no doubt. Probably this is just a delay in the process. Because for most their situation has not change enough that they can alter the outcome. Let's face it, when you get far enough down the line of making no payments that your lender is foreclosing on your home, you are pretty much like the barrell going over Niagra Falls, there is simply too buch pushing you over to stop it.

But hopefully there are those that have been working hard to save themselves from this and this is the break they needed.

Posted by Scott Baker, Realtor Homes for Sale in Cincinnati, West Chester, Mason, OH Area ( Coldwell Banker West Shell) about 8 years ago

Thanks all for all of your comments. A pretty mixed bag, kind of like I thought. A couple of things in response for the record.

I do always recommend talking to an attorney or accountant, or at the very least refer them to the Foreclosure hot line.
No I am not counting on this as the next big turn in my career.

In all honesty, I am an optimist but I am also a realist, I understand the skepticism about the overall market because I share it sometimes. I do sometimes feel though that our responses to questions from our clients and the public sometimes drives the market as much as the actual statistics and trends. We all see the effects when a bad article on the Today show goes out. So what I try to bring to the table is optimistic view to represent to people who ask, with caveats of course. Thanks again. My first featured post


Posted by StapletonHomeTeam KnopHomeTeam Distinctive Properties, For an UnReal Estate Experience call the Knop Home (Distinctive Properties) about 8 years ago

I can't help thinking about the other side of the coin... the homebuyers who will be put on hold, the neighborhoods with abandoned houses, the new beginning for people who experienced foreclosure...

Anyone can find a way to paint this situation with a rose-tinted paint brush, but that doesn't make this good news for anyone.  It just postpones the inevitable, including any recovery from this economy.

Posted by Margaret Woda, Maryland Real Estate & Military Relocation (Long & Foster Real Estate, Inc.) about 8 years ago

When you are several months behind on your mortgage payments and the bank started foreclosure proceeding, even if there is a suspension, you are just delaying the action.  I would ask the advice of an attorney or an accountant for their expertise.

Posted by Rosalinda Morgan, "The Rose Lady" about 8 years ago

I'm glad that they are stopping the foreclosures.  As I posted on Leslie's blog, I wonder how many of these pending foreclosures are actually short sales that have been stalled by the bank and/or modifications still "under review".  The banks have been jacking the homeowners around for months and sometimes years.  And if you believe the hype that the banks are saying that this freeze will only be temporary - for a few weeks - I've got a bridge for sale next to some lovely swamp land too.  The onslaught of class action lawsuits and investigations by various attorney generals all over the country has not even really started yet.  Foreclosures are going to be in a holding pattern for a while.  And we will continue to see title insurance companies refusing to insure foreclosure properties which means no title insurance means no mortgage.  This is not a 2-3 week situation and it will have far reaching consequences. 

Posted by Rhonda Burgess, New Construction Homes Nashville TN Specialist (Southern Living Realty Partners) about 8 years ago

I'm optimistic that this will drag out the situation longer.  We can wax poetic about all the things that BofA has done wrong, but this is just one of them.  I'd like to see this headline "BofA / Countrywide underwriter who approved NINJA loans jailed for approving fraudilent loans"

Posted by Geoff ONeill (John L. Scott Medford) about 8 years ago

Like some of the others, I'm very optimistic that this is a bad thing going on and will only make the situation worse by prolonging the inevitable. The best thing we could do is to foreclose quickly, sell the houses to people that can afford them and get on with life.

Posted by Andrew Martin (REMAX Accord) about 8 years ago

Don't think we'll see the NINJA loan officer jailed anuytime soon Geoff, BUT, it will be interesting to see what twist and turn this recent development adds to the market. For those of us working with short sales and loan mods, we know never to be surprised by any curve ball in the process and this is just another one of those. While i work and live on Kauai, a state with judicial foreclosures, B of A generally is foreclosing under the Power of Sale clause in a non-judicial proceeeding. So I am most curious to find out if this policy change for B of A will have any effect on the non-judicial foreclosures.

I do agree with some of the comments above regarding additional delays for buyers which is never good for the market when buyers are often tentative and volatile.

Posted by Ronnie Margolis, Kauai Realtor - CDPE, ABR, RA - On Top of the Aloh (KW Kauai) about 8 years ago

I'm joining in with the Optimism that all of this chaos will only delay the inevitable and prolong the pain.

Oh yeah... and make some Attorneys some money.

And keep all of the vacant homes vacant even longer...



Posted by Paul Francis, Las Vegas Real Estate Agent - Summerlin Homes (Francis Group Real Estate) about 8 years ago

I've seen several postings on this subject.  Below are the comments that I've left on the ones I've seen:

Hello everyone!  I rarely, if ever, comment here, but this is one instance in which I feel I should.  I am a loan officer WITH Bank of America.  It appears to me that all of the facts are not clear.  #1 Bank of America has NOT stopped foreclosures.  "In response to growing industry-wide concerns that foreclosure affidavits have not been property authorized", Bank of America stopped "foreclosure sales" on October 9th until an assessment has been "satisfactorily completed".  "Our ongoing assessment shows that the basis for our past foreclosure decisions is accurate".  The "foreclosure sale" is when the home is sold at public auction...this is the only thing that has stopped.  In addition, we have been told that the assessment is expected to be complete "on or before November 1st".  I am assigned to more than 15 of our REO agents to assist with prequalifications.  As of this moment, not one of their listings have been pulled and there is no indication that they will be.  In fact, since Friday several have had contract offers accepted and I had two that closed on Friday.  I'm concerned about the panic where no panic is necessary.  This is simply Bank of America's response to "concerns" in our industry.  As a 37 year veteran in the mortgage loan industry, I am proud to work at Bank of America.  I have assisted many customers through the short sale process and many others through the home loan modification process.  "Providing solutions for distressed homeowner's remains the primary focus" of Bank of America.  Not everyone will qualify for a modification and not everyone will be able to sell their home through a short sale.  Hats off to our wonderful Realtor community for their ongoing support of our efforts.....

Posted by Cola Galvin-Register, Renovation Manager/Senior Loan Officer about 8 years ago

Well done for your first featured post...please enjoy it to the fullest. On the subject matter, there are already nay-sayers out there stating how this will all continue to put off the recovery. My only response to them is...what recovery...? Until you fix SHELTER of the food, shelter, and clothing fame, consumers will continue to march to doom and gloom music...Good post and thank you

Posted by Richie Alan Naggar, agent & author (people first...then business Ran Right Realty ) about 8 years ago

I must say that I did not read all of the comments above but I also must say this is the worst news in the real estate business in a long time.  The effect of closing the doors on foreclosures will kill a lot of contractor business as well as sales of the properties.  Not to mention the contracts that are at the title companies that will not be allowed to close. The buyers will not be able to reclaim their escrow deposits until the rule is lifted.  The sellers will not agree to release the funds because they have a contract to sell their properties.  Now they will be burdened with a home that they can not sell and you can not sell it for them.  Where is the positive side of this new angle to kill the real estate business.

Posted by Don Eichler (Eichler Properties) about 8 years ago

This goes to show that any news is positive or negative depending on who is reading it and how it's affecting them personally.  Very interesting mixed bag of comments here.  

Posted by Manuel Monserrate about 8 years ago

Tying up the foreclosure process inevitably has its negative points.  Many people will suffer as a result.  My understanding is that the foreclosure process is being halted in order to clean up the errors and ensure that everything is being done correctly.  With that in mind, the foreclosure halt should ultimately have a stabilizing effect.  Now the question is, how long will that take?

Posted by Paul Franciskato (Asset Brokering Services) about 8 years ago

Two weeks....NO impact.....

Posted by Cola Galvin-Register, Renovation Manager/Senior Loan Officer about 8 years ago


I totally missed my chance at a "called shot" icon by my name.  After reading this post I was looking for the "suggest" button and when I couldn't find it I went on to the next post, where I learned that this post was already featured.

I also see you are right on my heals points-wise.

Great content, and thanks for giving me a little kick in the pants to get back on the blog.

See ya'



Speaking of icons, why don't you have the rain camp icon by your name?

Posted by John Keene (Perry & Co.) about 8 years ago