A pall of gloom has again arrived for US banks, but the source for the imminent gloom is different.
It’s not the foreclosures but the mishandling of foreclosure documents from the banks itself, which has pulled the banks in a soup.
Popular mortgage lending firms had decided to suspend the foreclosure process for sometime, as banks have claimed that there could be existing irregularities in how they have handled the documents in the past.
The borrowers have sought foreclosure details from the banks. They have hired attorneys, to pull the banks to see the mistakes they have committed in handing the foreclosure documents.
The three big banks in US, namely Bank of America, JP Morgan chase and GMAC have agreed that some loopholes may have crept in due to negligence.
It remains to be seem, what penalties and fines courts would impose on these big major US banks.
Though, the problem does seem to affect borrowers, but the US banks have done it as an act of negligence, rather than an attempt to rob borrowers. The high figures of foreclosure cases in 2010 have been one of the reasons, why US banks have met this unlikely situation.
Most of the banks have committed mistakes due to shortage of workers. The understaffed banks are striving to complete the process on time, and that might be the main reason for discrepancies arising in the foreclosure documents.
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