The collapse of the U.S. real estate market and the ongoing mortgage foreclosure crises continues to impair significant improvement in the economy.

The LA Times reports “Nationally, new single-family homes sold at a seasonally adjusted annual rate of 298,000 in July, putting the industry on pace to post the lowest annual sales since the Commerce Department began keeping data in 1963.”

With too much inventory, and a substantial portion of foreclosed properties, 2011 could be the worst year on record for new-home sales. This is driving the fifth year of decline for the new home construction industry.

Future Foreclosure Reforms

In remarks to the American Banker Regulatory Symposium, John Walsh, Acting Comptroller of the Currency, summed up the problem, “It’s hard to overstate the importance of the foreclosure and servicing issues. They are a major drag on the struggling housing industry, and a well-functioning housing sector is vital to the health of local communities and our national economy.”

He further notes that “but it’s hard to imagine the housing sector recovering until we work through the mortgage modification process, address the large back-log of foreclosures, and restore a fair and functional foreclosure process in the housing market.”

Given the critical importance of this element of economic recovery, it would be helpful if fast and decisive action arrived quickly. Comptroller Walsh is optimistic, but recognizes that speed of the reform may not be as fast as many would hope.

He points of the painstaking nature of the process that is necessary to review the individual claims of borrowers and determine the financial injury they may have suffered. This effort is part of the overall plan to restructure the mortgage industry.

The Comptroller’s office has also initiated enforcement actions, independent foreclosure review and establishment of new uniform national mortgage servicing standards. Comptroller Walsh notes further changes in the process are occurring because of State AG actions, private lawsuits and new rulemaking.

What If You Can’t Wait?

For borrowers who cannot wait for the bureaucratic intricacies of the process to be reformed, an attorney may be able to help. Because of the complex nature of most individual’s financial history and circumstances, there may be multiple options available, ranging from a mortgage modification to bankruptcy.

An attorney can review your situation, explain the details of each option and help you make the best choice for you and your family.

Source: Foreclosure Reforms Could Take Year or More

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