In my October 10 note, I highlighted the home foreclosure processing problems in the US and that while most participants wanted to minimize the financial impact to themselves and to the economy, there remained a challenge in balancing the desire for expediency with “rule of law” processes. On November 16, the US Congressional Oversight Panel released the report “Examining the Consequences of Mortgage Irregularities for Financial Stability and Foreclosure Mitigation” and stated the following: “Allegations of ‘robo-signing’ are deeply disturbing and have given rise to ongoing federal and state investigations. At this point, the ultimate implications remain unclear. It is possible, however, that “robo-signing” may have concealed much deeper problems in the mortgage market that could potentially threaten financial stability and undermine the government's efforts to mitigate the foreclosure crisis.”
MY TAKE: Foreclosure processing will likely proceed at a slow pace as judges, along with state and federal regulators, continue their reviews. The implications for large money center banks and their investors, as well as the financial system remain unclear.