Robosigning!? Mortgage fiasco - latest update.

GMAC, said Tuesday it has hired outside accounting and legal firms to examine its foreclosure procedures in all 50 states. GMAC had previously announced that it was temporarily suspending evictions and post-foreclosure closings in the 23 states in which judges must sign off before someone loses their home.

Both Wells Fargo and Litton Loan Servicing said Tuesday they were modifying their foreclosure processes. Wells Fargo, one of the nation's largest loan servicers, said the bank is conducting additional reviews of documents, but is not freezing foreclosures.

What's the fed up to?
The central bank can no longer employ its usual tool to bolster the economy -- lower interest rates -- since the fed funds rate is already near 0%, and has been since December 2008. Ultimately, the committee voted to keep interest rates near 0%, and to continue to reinvest proceeds from maturing mortgage securities into new Treasury’s.

What is going to happen in 2011?
Investors expect more property sales next year as lenders step up foreclosures to meet the hunger for distressed properties. But they are wary of the U.S. economy and will continue to flock to higher quality properties whose rents cover mortgages. Can you make money off flipping property; its difficult very difficult.
About $1.4 trillion of mortgages on U.S. commercial real estate -- including apartment buildings, hotels, office buildings, distribution centers, malls and shopping centers -- are expected to mature between now and 2014. Those borrowers will have to find new loans to replace the maturing ones and they will likely face less generous lenders. We expect lenders to gradually let go of more properties in 2011 and 2012. These sales will be 30 percent to 50 percent below 2007 peaks, the survey said.

Speaking of foreclosures what behind these so called "robosigning" scandal. No one can sign any documents that they never read, but that's just the tip of the iceberg. The real issue is who has the legal right to foreclose on this properties. Foreclosures are governed by the state law where the properties are there is no real federal jurisdiction. Real estate law requires real paper transfer of titles, and a lot of the paperwork on these foreclosures went electronic without much regard to the rule of law.

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