Freezing of foreclosures by Bank of America, JP Morgan Chase and GMAC may lead to a new foreclosure crisis affecting the banking sector and title insurance industry. Possible faulty documents are causing banks to halt foreclosures and causing title insurers to stop issuing title insurance on bank owned real estate. Banks may not be able to sell the foreclosures that they have taken from homeowners as the buyers will not be able to obtain title insurance – Those homeowners who have already lost their home to foreclosure may be entitled to compensation from the bank because the banks may have unlawfully obtained ownership by having filed affidavits in support of their foreclosure proceedings that contained information that was not verified – Homeowners who are now receiving collection letters regarding a foreclosure deficiency may have be entitled to compensation – Story to Follow
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