Banks Seize Record Homes in Q3, Challenges Await

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More than one million Americans could lose their homes this year. Lenders foreclosed on more than one-quarter of a million homes in just the last three months. Some of those foreclosures may be illegal and that has led to a joint investigation across all 50 states.

A new record has been reached in the four-year long housing slump -- almost 290,000 homes were lost to foreclosure in a single quarter.

However, some homeowners feel they may have been thrown out of their house unjustly as a part of a massive scandal where lenders automatically signed off on thousands of foreclosures without ever reviewing the files, checking for forged signatures or evicting people without reading the documents.

On the advice of their attorney, the Bolanos of Escondido, California have broken into and re-occupied their house from which they were evicted this summer.

"A little bit worried, but we excited to bring my family back and keep dreaming," said Emiliano Bolanos.

The family plans to stay in the house until the foreclosure issue can be resolved.

"I think the burden is on the other parties to prove that we have done something wrong," said Michael Pines, the Bolano's attorney.

The attorney generals of all 50 states and the District of Columbia have joined together to investigate the lenders.

"Foreclosures' processes frequently include inaccurate documents, conflicts of interest, faulty chains of title," said Washington state Attorney General Rob McKenna.

"This is a chance to right the law and get the process right," said Iowa Attorney General Tom Miller.

One state attorney general has accused banks of blatantly breaking the law.

Many banks have temporarily frozen foreclosures and some are calling for a nationwide moratorium on foreclosures so no one else loses a home unnecessarily or illegally.

Yet, President Barack Obama hasn't joined in that chorus. The reason? Many analysts warn such a moratorium could cripple the housing market's recovery.

Foreclosures on homes now make up almost one-third of the market and to take them off the market would lead to a huge backlog and push already plunging home prices further down.

Meanwhile, Americans like the McKees of Charlotte, N.C., wonder if their bank's threat to evict them is on hold and they will have time to save their home.

"God will make a way and I believe he will," said Gloria McKee. "But, Lord, I'm not questioning you - but, 'when?'"

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Paul  Strand

Paul Strand

CBN News Washington Sr. Correspondent

As senior correspondent in CBN's Washington, D.C., bureau, Paul Strand has covered a variety of political and social issues, with an emphasis on defense, justice, and Congress.  Follow Paul on Twitter @PaulStrandCBN and "like" him at Facebook.com/PaulStrandCBN.