The robo-signing fiasco is expected to have a chilling effect on home sales during the spring. According to a Moody’s report the paperwork problem and subsequent delay in posting new foreclosures by several large lenders will delay the foreclosure process by about three months for the average distressed home.
Moody’s says that 2011 will bring a wide variation in court opinions on what to do with cases brought before the courts for foreclosure judgments. There is unlikely to be any standard reaction because laws vary from state to state and opinions vary from judge to judge. As a result of the uncertainty Moody’s has placed the ratings for 12 servicers on review for possible lower scores early in the coming year.