As lenders admit to flawed foreclosure procedures, experts weigh in on impact

October 05, 2010 11:30AM

In the wake of some of the nation’s biggest lenders — including GMAC Mortgage,
JPMorgan Chase and Bank of America — conceding that their foreclosure
procedures might have been improperly handled, real estate attorneys
Adam Leitman Bailey and Shari Olefson discuss the impact of this revelation on the real estate market, in the CNBC video
above. In the short term, it’s “very good for stabilizing prices,”
according to Bailey. Since less homes are going into foreclosure, there
is less inventory on the market and existing homes prices will drop,
Bailey explained, though he said that the fact that Americans are unable
to afford housing is “horrible” and that the market needs to progress.
Olefson disagreed, saying that this foreclosure mess “will create more
problems than it will solve.” She believes that it creates
doubt in the market “and the last thing we need in housing is
uncertainty,” she said. “Nobody really knows how the judicial system is
going to handle this,” she added.