Hope you’re not in the market for or currently looking to purchase a home in same stage of the foreclosure process.  Changes are you’ll be getting an, “Opps sorry that property is currenltyoff the market” e-mail or phone call.  The unfolding foreclosure-processing catastrophe caused most of the “Big Bank” stocks such as Bank Of America (BAC), Citi (C), JPMorgan (JPM) and Wells Fargo (WFC)  to fall on Friday,  some as much as 5%.

“BofA and J.P. Morgan said they temporarily suspended foreclosure sales as they review procedures, while other big banks have said they are reviewing files but haven’t promised to freeze foreclosures. But even here, bankers are having trouble slamming on the brakes,” as quoted in the Wall Street Journal Friday afternoon.  On the other hand some of the institutions that caused the problems in the first place have found certain loop-holes in some states such as Illinois, Florda an Ohio, which have allowed the like of Bank of America and J.P. Morgan Chase to continue prodeedigs that allow them to sell foreclosed homes at public auction, according to court clerks.

A J.P. Morgan spokesman said Friday that “we have asked our local foreclosure attorneys not to seek judgments.” Bank of America said on Oct. 8 that it would “stop foreclosure sales until our assessment has been satisfactorily completed.” On Friday, a bank spokesman said that its cancellations only cover foreclosure sales scheduled between Oct. 9 and Oct. 31 because it doesn’t expect the review to take longer. BofA’s moratorium includes all 50 states, while J.P. Morgan’s covers 41 states.

Since the beginning of the T.A.R.P program first began the big banks and large Wall Street investment banking fims have been on a collision course with legal system over correct procedures when involving the residential real estate market.  The entire subprime mess was based on the premise that hom prices would never fall, even the Orical of Omaha himself Warren Buffett has been quoted on CNBC that he was even pulled int the midset that housing prices might never fall.

[image credit: Associated Press]

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