Foreclosure stoppages may hurt homebuyers
However, a new report suggests the uncertainty following the proposed decision may be hurting those with good credit who are trying to purchase to a new home.
The pause in sales has hit new homebuyers hard, according to a report by the Kansas City Star. The demographic is most likely to purchase foreclosed homes, which make up an estimated 25 to 30 percent of the new sales market.
“We’re going to see a sharp drop in October home sales as a result of foreclosure sales being put on hold,” Guy Cecala, publisher of Inside Mortgage Finance, told the Star. “And as you know, we’re already at anemic levels.”
In a recent survey by the National Association of Realtors, 23 percent of real estate agents said they had at least one client that was no longer interested in a purchase as a result of the industry upheaval.
Despite the lack of government action, most lenders including Ally Financial, JP Morgan Chase and Wells Fargo have all halted foreclosure sales in order to review their paperwork processes.