Foreclosure Scandal Impact: Sales Dry Up
Big banks are having trouble restarting the foreclosure process after this fall's "robo-signing" scandal, and the once-booming market for foreclosed homes has been hit hard as a result.
According to ForeclosureRadar, the number of properties coming to auction in hard-hit western states -- Arizona, California and Nevada -- has dropped more than 30%.
In San Diego, according to broker Scott Cheng of Cheng Realty, who puts investors together with foreclosed properties, the number of auctions scheduled has fallen from 500 a day, to 300. "That part of my business has dried up," Cheng said. "A lot of my investors have stopped looking."
Cheng used to be able to find about three or four suitable homes a month for investors looking for a bargain. Now, he hasn't done one of these deals since August.
