… because without sales of homes in distressed areas the “recovery in the housing market stops. It’s frozen,” according to White House Press Secretary Robert Gibbs.

He elaborates (via CNNMoney.com):

“That obviously can have — we believe and others believe — a very negative and detrimental impact to our economic recovery efforts and the housing markets in states that have been hardest hit.”

Of course, foreclosures are a last resort — loan modifications, short sales and all other rescue options should be exhausted before sending properties to the auction block. Additionally, the documentation process needs to be as accurate as possible, which is an issue that several major lenders are addressing right now during the “foreclosure freeze.”

Despite the “freeze” from some lenders, foreclosures are still for sale throughout the nation. And most of them are available to purchase for significantly less than market value.

The fact of the matter is that foreclosures need to happen “for there to be a full housing recovery” and because they are “an important part of ensuring longer-term stability in the market is to enable properties to be resold to families who can afford to purchase them.”

To search foreclosed homes for sale in your area right now click here.

Yes!

The “foreclosure freeze” and subsequent “robo-signing” scandal has unfortunately scared away many would-be buyers and investors from pursuing otherwise fantastic deals in the distressed real estate market.

Here’s the deal: Bank-owned foreclosures — also known as Real Estate-Owned (REOs) — that are still on the market and currently for sale are safe to buy.

These properties have been repossessed and their titles are for all intents and purposes, clean. If there is any doubt, the banks and/or lenders will pull them off the market to investigate the individual situations.

Sure, some banks such as Bank of America temporarily put the breaks on all foreclosure sales to err on the side of caution, but even it has started to get the important process moving once again.

And what if, in a rare instance, you purchased a bank-owned property that happens to be the subject of a “wrongful foreclosure” case? As long as you and the lender have title insurance, which is typically mandatory in all home purchases, you still keep the house.

Bankrate.com explains:

“To the extent that a borrower who was foreclosed upon has recourse, it’s against the foreclosing lender, and they can seek monetary damages. But the property’s gone…. The current owner who got title insurance — they get to keep the property. They’re a good-faith purchaser.”

The moral of this story is relax! Don’t be scared of searching and purchasing foreclosed homes directly from lenders/banks. Bank-owned foreclosures/REOs are indeed still for sale, and more than likely, available at significantly reduced prices.

Proceed with confidence! And you can start today on Foreclosure.com — CLICK HERE.

FREEZE! Don’t move a muscle.

That’s exactly what J.P. Morgan Chase, which is among the largest banks in the United States, intends to do as it sorts through stacks of potentially-flawed foreclosure paperwork, according to the Washington Post.

About 56,000 borrowers in 23 states will be granted temporary reprieve from possible eviction while the bank investigates claims about “forged documents and signatures and other similar problems are being used to try to overturn court-ordered evictions.”

Apparently, serious questions have been raised about whether or not the foreclosure files were properly assembled and if the employees who signed off on/executed the documents even reviewed them.

In fact, a J.P. Morgan Chase employee recently admitted that “she and her team signed off on about 18,000 foreclosures a month without checking whether they were justified.”

Sounds like a big mess.

At least J.P. Morgan Chase is doing the right thing now to fix whatever mistakes or oversights it may have made in the past. Expect other lenders/banks to follow suit as the lens on this issues begins to sharpen.

And foreclosures, short sales and other distressed situations looming on the horizon are to blame, according to a report today from the Associated Press, which cites The Standard & Poor’s/Case-Shiller 20-city index.

Here’s the gist:

” … the peak home-buying season is now ending after a dismal summer. The hardest-hit markets, already battered by foreclosures, are bracing for a bigger wave of homes sold at foreclosure or through short sales…. Add high unemployment and reluctant buyers, and the outlook in many areas is bleak. Nationally, home values are projected to fall 2.2 percent in the second half of the year….”

Sounds like yet another perfect storm-like situation.

Here are the major markets expected to feel the pain the most:

• Port St. Lucie, Fla., and Reno, Nev., where prices could fall 7 percent over the next year.
• Orlando and Daytona Beach, Fla., which face price drops of at least 6 percent.
• Las Vegas, which led all declines in the latest report, is also expected to post a 6 percent drop. Home values there have already tumbled 57 percent from their peak four years ago.

This, naturally, will likely create more foreclosure inventory, which typically drives down collective home prices because distressed sales are almost always available for much less than current market value.

In fact, it’s projected that 2.4 million distressed properties will be sold next year nationwide, accounting for nearly half (45 percent) of all home sales. This is of course good news for first time homebuyers, investors and speculators, who can continue to take a “wait and see” approach and strike when the iron is hot.

We suggest checking out our free foreclosure email alerts, which will notify you if and when a great deal in your area hits the market. To be notified all you have to do is click here.

Major mortgage backer Freddie Mac recently estimated about 4 million new and existing home sales for the third quarter of 2010, which would mark a 20.7 dip from the same time last year and a 23 percent slide from the previous quarter.

Government stimulus, or lack thereof, is believed to be the primary culprit, according to HousingWire.com. The homebuyer tax credits both expired in April.

Poor home sales, as well as rising delinquencies, have pushed prices down overall. That’s great news for buyers, but at this stage — with the unemployment rate still high and money tight virtually all around — it seems that the pool is still super shallow.

It’s an ideal climate for investors in speculators, however. In fact, the recently-introduced “First Look” program was designed to help communities and traditional buyers beat cash-laden opportunists to the punch, providing them with much-needed time to land the best deals before they are gobbled up.

To check out the best distressed real estate deals in your area today remember that you can search Foreclosure.com free for seven days. You can start right here.