Shadow Inventory Grows as Foreclosures Delayed
Foreclosure processing is being delayed from many major lenders fueling a larger shadow market. Delays are a result of investigations into wrongful processing and error from the lenders. The slow buying market and abundance of foreclosed properties on the market are just causing the amount of vacant properties to continue to grow.
These delays in processing are causing many foreclosures to be pushed into 2012, continuing the slow housing decline. While RealtyTrac predicted three million foreclosure filings for 2011 it is looking like about two million will be pushed through the system. It is unclear when the rest will be pushed through, but nearly guaranteed that they will.
In a recent Bloomberg article, James Saccacio from RealtyTrac explains, “This casts an ominous shadow over the housing market, where recovery is unlikely to happen until the current and forthcoming inventory of distressed properties can be whittled down to a manageable number.”
The article also suggests that we haven’t seen the bottom of housing values and that they’ll continue to fall as the shadow inventory continues to grow. We talked about this in a recent post, available here.
