Ask Andy: Foreclosure freeze - Action News 5 - Memphis, Tennessee

Ask Andy: Foreclosure freeze

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By Andy Wise - bio | email

MEMPHIS (WMC-TV) - Bank of America has frozen its home foreclosures in all 50 states.

JP Morgan Chase & Co. and Ally Financial Inc.'s GMAC Mortgage have stopped their foreclosures in 23 states that require the process to go through the courts.

The cease-and-desist comes after evidence of either mistakes, incompetence or fraud in the signing of court documents in some of those foreclosures.

But here in the Mid-South, those banks' recent freeze on foreclosure proceedings shouldn't have much of an impact, according to lenders, housing counselors and the Tennessee Attorney General's Office.

That's because Tennessee, Arkansas and Mississippi are non-judicial foreclosure states. What that means is mortgage lenders in those states don't have to go through court to foreclose on a delinquent borrower -- so there were no court documents to fudge or screw up.

"As a non-judicial foreclosure state, Tennessee should not be one of the states where the 'robo-signing' of court documents has created a wide-spread problem regarding legitimacy of foreclosures," said Tennessee Attorney General Bob Cooper in a press release Wednesday, despite announcing that he has joined 48 other states' attorneys general in a probe of banks' foreclosure policies.

Even so, if you've been in the market to buy a foreclosure at a discounted price, lenders and counselors recommend you research who holds the notes on those properties before you bid or buy.

If you're facing the possibility of losing your home to foreclosure, lenders and counselors recommend these options:

* LOAN MODIFICATION.  Third-parties CANNOT conduct loan modifications. Only your existing lender can modify your loan or lower your interest rate. For the various options in loan modifications, please read my Ask Andy report on them here:

* SHORT SALE. A short sale is selling your house for less than the value of the mortgage. If you owe more on the loan than the house is worth, a short sale may be a way to avoid the mess of a foreclosure and maybe recoup a little bit of money to help you set things straight.

But there are catches.  For those, click here for my Ask Andy report on short sales:

* UNITED HOUSING. United Housing is a Shelby County, TN, not-for-profit that provides housing counseling and low-interest loan options:

* MEMPHIS HOUSING COUNSELING NETWORK. The network offers FREE housing assistance and numerous options to help keep at-risk borrowers from losing their homes: or call 901-725-8361.

Memphis Area Legal Services and the Memphis Fair Housing Center may also be able to advocate for low-income people seeking a loan modification. You can reach both at or (901) 523-8822. 

Tennessee consumers can report mortgage or foreclosure fraud to the Tennessee Department of Financial Institutions at or call 1-800-778-4215.

Mississippi consumers can report mortgage/foreclosure fraud to the Mississippi Attorney General's Consumer Protection Division: or call 1-800-281-4418.

Arkansas consumers can contact the Arkansas Attorney General at or call 1-800-482-8982.

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