Banks Ramp Up Foreclosures: Report
Some of the largest mortgage companies in the US are stepping up foreclosures on delinquent homeowners, and will likely lead to more Americans losing their homes, the Wall Street Journal reported Wednesday.
JPMorgan Chase , Wells Fargo , Fannie Mae and Freddie Mac all told the Journal they have increased foreclosure activity in recent weeks after lifting internal moratoriums which temporarily halted foreclosures.
Companies had temporarily halted foreclosing on borrowers as they waited for the details of the Obama administration's housing rescue plan, which was announced in February, or due to changes in state laws, but are now determining which troubled borrowers are candidates for help and are moving the rest through the foreclosure process, the Journal reported.
The resulting increase in the supply of foreclosed homes could further depress home prices and put additional pressure on bank earnings as troubled loans are written off, the paper said.
Some of the mortgage companies have received funds under the government's financial sector bailout, which could make their actions politically sensitive, according to the Journal.
From various foreclosure-related reports, the paper noted that foreclosure sales have been edging up this year and that foreclosure-related filings increased within the last two months.
The newspaper also said that the backlog of seriously delinquent loans has been growing and that the delays caused while the moratoriums were in place have only increased the amount of interest and fees borrowers owe.
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