Foreclosures are a growing trend. One estimate I saw on television suggested that 1 in 5 U.S. houses would face foreclosure by 2012. Already in many areas, foreclosures provide about half of the houses that are sold. With so many foreclosures, it matters that they’re done well. It matters not just as a matter of public policy, but as a financial make-or-break issue for banks.
It makes sense, then, that several large banks have suspended foreclosures in one way or another while they reexamine their procedures. PNC Bank today joined this group, telling closing agents of an immediate 30-day suspension in the sale of foreclosed houses. PNC is the new home of National City, which collapsed from its mortgage loans two years ago.
The widespread consequences of errors in foreclosure actions have made the problem a political issue, with state attorney generals and members of Congress among the political figures calling for various forms of disclosure from the banks. Currently, most banks don’t even collect the foreclosure information that politicians are asking for, and I’m sure some banking executives today are asking, “Why don’t we collect this information?