Foreclosure Process Scrutinized

By: Ashley Conroy Email
By: Ashley Conroy Email

The National Association of Attorneys General released a letter that says 50 states are filing an investigation into foreclosure documents that appear to have 'defects'. About 2.5 million homes have been foreclosed since 2007.

"Some representatives from some companies that admitted in testimony that they weren't actually reading the documents," said Mississippi Attorney general Jim Hood.

Attorneys general around the nation allege the documents were improperly submitted, such as affidavits saying homeowners knew exactly the terms of their foreclosure.

"Number one, we're asking them, what have you done thus far? You know, what are you doing to look and make sure that you don't have people to just sign away things that they don't know," Hood said.

An estimated 3,000-plus homes have foreclosed in Mississippi. But as the housing market bubbled and the nation saw foreclosure sign after foreclosure sign, some mortgage experts say, to some degree, this has helped the economy.

"I think you'll find out that a lot competition right now in the real estate market is buying foreclosures, whether you be at owner occupancy or an investor, and it does help the economy," said Bo Smith of Cornerstone Home Lending.

Realtor Justin Wright says investigating these 'questionable' foreclosures could lead to a halt in the business and create more problems down the road.

"Not only will consumers lose confidence in buying a foreclosure, but foreclosures will be taken off the market and they will be out of jobs by the thousands," Wright said.

But Hood says improperly foreclosing on a house does create problems.

"It's creating problems out there for people who are trying to buy these distressed properties," said Hood. "And you know, with as much trouble as we've already had with our real estate market, certainly we don't need that instability to come into play."

Hood says his office has received one formal complaint so far about someone who thought their home was improperly foreclosed; it's now under investigation.

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