This is a great article from the Washing Post talking about the possibility there will be a huge onslaught of foreclosures coming down the real estate pipeline in the not so distant future. This second wave of foreclosures will most definitely ruin any chance of a real estate recovery. What is the likelihood of this happening in 2010? According to this article the numbers are pretty telling.
"Lenders are deluged by late-stage delinquencies. The pent-up foreclosure inventory is there," said Massoud Ahmadi, director of research for the Maryland Department of Housing and Community Development.Also from the article,
In addition to those already in default are 11 million more U.S. borrowers who owe more on their mortgage than their home is worth -- known as being underwater -- and are in danger of becoming delinquent, said Sam Khater, chief economist for First American CoreLogic.I briefly touched on this topic late last year and it sounds like I wasn't that far off. I feel like the government is trying to help stave off this impending second wave of foreclosures. But until the banks get their act together and help homeowners adjust their current mortgages and assist with shortsales I feel like we'll be dealing with the threat of foreclosures for a very long time. From the article,
"Banks have remained in foreclosure paralysis, allowing that backlog to get larger and larger. You can't do that indefinitely," said Sandeep Bordia, head of U.S. residential credit strategy at Barclays Capital.I agree, but banks won't change unless someone forces them to change the way they're handling this crisis. Until then I guess we'll all just have to cross our fingers and hope for the best.