On October 7, 2010, Barack Obama rejected the Interstate Recognition of Notarizations Act, which would require courts to accept documents that have been notarized in another state. Many are calling for a moratorium on foreclosures, stating banks have reclaimed homes on fraudulent documentation. Just last week, Bank of America, JPMorgan Chase and GMAC announced they were suspending thousands of foreclosures due to inaccurate handling of documents. It is estimated that there are documentation problems in 80 percent of currently pending foreclosures.
Just when it seems the government and banks are beginning to act responsibly, Wells Fargo announced they will cease to delay foreclosure proceedings. Wells Fargo cited mortgage investors, including Fannie Mae and Freddie Mac, as the reason for this policy change. Which could mean, other banks will soon follow. This means an active short sale will no longer be an acceptable reason to prevent foreclosure proceedings. For those facing foreclosure on a Wells Fargo loan this means you must act swiftly to complete a short sale or the clock will run out. Unless Fannie Mae and Freddie Mac also act responsibly, all of this is just one step forward and two steps back.