On Monday, Texas Attorney General Greg Abbott put out notice to 30 home lenders that he wants them to halt all foreclosure proceedings and to stop the sale of foreclosed homes. He believes that many of the foreclosure proceedings haven’t been performed legally and wants all of them to take a look at the processes and show the results of those to the state. Foreclosures have been high in Texas, a state which has actually weathered the housing storm pretty well, so it’s a concern he wants looked into.
At the same time, the Texas Association of Realtors believes this action will hurt home sales, since around 25% of all home sales seem to be formerly foreclosed property. They even had an economist from Texas A&M University state that the action “could create major disruption to housing market if the process is stopped.”
Frankly I’m missing it. There’s a glut of homes on the market to begin with, and 25% of the market being withheld for a short period of time isn’t a bad thing at all. What they might be scared of is what will happen if the AG determines that many people who lost their homes because of illegal activities are given their homes back, taking money out of the pockets of realtors who helped to sell these foreclosed homes.
In my opinion, this is a good thing on many levels. One, people who have been at risk of losing their homes are finally getting a break. Two, people who lost their homes might have a recourse against predatory lenders. Three, there are a lot of other homes that realtors will now have to guide buyers towards. Three, if this takes a long time, which it might, home prices overall could rise, and that means everyone makes higher commissions on home sales.
This is a good day for consumers, and with a positive outlook a positive day for real estate brokers as well.
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Mitch writes on real estate, finance, and many other things.