From AOL NEWS:
Even as the consequences of the ongoing foreclosure crisis slowly unfold — and the ultimate impact is yet unknown — it’s not too early to tote up a list of 10 potentially important developments that have already happened. (For more background, see my recent DailyFinance article “The Foreclosure Crisis: Eroding Trust — and Ending the Recovery?”)
1) Title companies are pulling back from issuing title insurance on homes that were sold in foreclosure or that were previously foreclosed. Not being able to obtain title insurance is the kiss of death for real estate transactions, as Mark Hanson, an independent housing analyst in Menlo Park, Calif., recently observed. “Title companies would be crazy to ensure title on anything remotely associated with a foreclosed property because we don’t know how this is going to resolve itself.”
2) This uncertainty will make it more difficult to sell or even refinance homes that were purchased while in the foreclosure pipeline. This will have an outsize impact on the market for foreclosed or distressed properties, which now make up a significant percentage of all home sales. Investors who have been snapping up distressed homes accounted for over 20% of all home sales in August, according to National Association of Realtors…
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