Friday, March 12, 2010
A story in today's Washington Post echoes my recent findings for the Middlesex North District: Foreclosures are rising rapidly and risk further destabilization of the real estate market. The Post story talks about a growing "shadow market" which represents the lag between a homeowner's mortgage default and the lender's decision to proceed to foreclosure. Because a glut of foreclosures, lenders are hesitant to actually foreclose lest they further suppress the market. And some lenders have so many defaults that they lack the resources to do these foreclosures expeditiously. This story predicts that it will take up to 30 months to work our way through the inventory of defaulting homeowners and get the properties back into possession of financially stable owners.