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Chase And Bank of America To Experience 2nd Wave of Foreclosures
July 6th, 2009
According to Washington, just
as the nation’s housing market is starting to show signs of stabilizing,
another wave of foreclosures is scheduled to hit possibly as early as this
summer thus inflicting pain for families and communities in this troubled national
economy.
As a result of rising
unemployment and plummeting home prices, mortgage defaults have surged to high
record levels this year. Many banks have recently put off foreclosure action on
troubled properties. Part of the reason is that they have signed up for the Obama administration’s home-stability plan. This
requires them to consider alternatives such as modifying loans to make it
easier for borrowers to sustain their mortgage payments.
The accelerating rate of layoffs
is a major concern. In June, employers shed nearly 500,000 jobs. The new
freshly unemployed have little chance of having their mortgages modified. Banks
are preparing to take a more aggressive stance as a result of this.
Tom Kelly, a spokesman from
Chase Bank confirmed the impending surge in foreclosures. Chase has approved
modifying 138,000 loans under Obama’s program.
An undisclosed number of other Chase borrowers did not qualify for the
government modification. Many of those homeowners may face possible forclosure.
Chase is gearing up to deal
with another separate group of 80,000 borrowers in default. The foreclosure
process had been voluntarily paused by the lender late last year required by Obama’s 90-day moratorium
Bank of America,
considered the nation’s largest servicer of
home mortgages after acquiring Countrywide, did not release data volume of
likely impending foreclosures. The bank said that it has extended offers to
modify more than 45,000 borrowers under the Obama
plan.
Dan Frahm,
a spokesperson for Bank of America stated that the company was projecting a
slow rise in the number of monthly foreclosures and potentially reaching 30%
above previous normal levels.
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