It was a surprise for the Real Estate and housing market. Pending sales in the US of existing homes rose in October. It came despite rising concerns that current problems in mortgage banks' foreclosure processes might affect market activity.
According to the National Association of Realtors' (NAR) Pending Home Sales Index, pending sales of existing US homes rose to 89.3 in October, up by 10.4% from 80.9 recorded in September. It was a surprise, because most market analysts expected for about 0.5% decline.
However, the index of pending home sales remains below the cyclical peak record of 112.4, which was recorded in October last year. In October 2009, the sales figure was boosted by a tax credit issued by the federal government to persuade first-time buyers to purchase homes.
NAR said it was pleased to see a double-digit and strong gain in sales of existing homes. However, it added that the market activity should continue to show signs of improvement for the market to actually reach healthier and more sustainable levels.
It could be recalled that a number of major US mortgage banks temporarily stopped their foreclosure activities in September to October this year. The action was a result of allegations from numerous actual borrowers that the lenders mishandled foreclosure processes and evicted many homeowners from their homes without due process and necessary legal review.
Such allegations also unveiled the so-called 'robo-signers' and 'dual tracks' that are allegedly practiced by mortgage servicers. 'Robo-signers' are supposedly enabling the banks to process hundreds of foreclosure documents within just one day. 'Dual tracks' is the practice of foreclosing homes even if the homeowners are still in the process of negotiations for possible loan assistance programs from banks.
Mortgage lenders' temporary halting of their foreclosure activities has posed noticeable impacts on many market figures and data in the recent weeks. Usually, the action dragged down home sales and foreclosure volumes. It came as a surprise that pending sales of already existing homes rose and defied the trend.
Meanwhile, attorneys general in as high as 50 states have already launched their respective investigations on whether the mortgage lenders are really at fault. They want to find out if the banks could be made responsible for their allegedly improper paperwork handling. Some banks have already expressed their willingness to settle some state actions.
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