Will Stopping the Foreclosures cause a Slower Housing Recovery?
I completely understand why they have stopped foreclosing on houses until the major banks are able to put procedures in place that are fair to home owners and to the states' economies. One thing I am not sure about is whether or not the banks will go ahead and continue the foreclosure process on houses that are sitting vacant. If the owners have already left the premises, then these houses need to go ahead and be sold so that the market can begin recovering from these low sale prices.
Everybody knows that we cannot experience a sustainable housing recovery until the high numbers of foreclosures and short sales have exited the market. This will probably not happen until we see real job growth so I strongly believe the banks should do more loan modifications and less foreclosing.
I have heard the argument on television and online about how agents will be hurt from briefly stopping the foreclosures. I do not believe that the majority of real estate agents will feel the effects of this. There are only a handful of agents in Charlotte, NC that work directly with banks on marketing and closing foreclosures and/or HUD houses. These agents will see their income drop until the banks continue their right of foreclosing. You could argue that the agents that work so closely with the banks are part of the problem. I have spoke with a couple of them when calling to ask a question about a property for my buyer client. In two cases, the agent did not know anything about the property, had not been inside of the house, and was not familiar with what was happening in the subdivision. Instead, these agents are so overwhelmed with a high number of foreclosure/HUD listings that they pay a part time employee to go out to place a yard sign, lock box, and to snap a few pictures.
Do the banks realize that they are paying for a full service agent but only receiving the marketing and services of a flat fee real estate company? Do other major cities around the country have only a few agents that are receiving the large number of foreclosure listings and do these agents in your area actually know about the specific properties or are they just experts in the foreclosure process?
It will be interesting to see what, if anything, changes when the banks begin foreclosing again. The banks are not in the business of holding and managing houses that they have foreclosed on. The banks want to get these houses out of their portfolios and have the right to do so. I hate to see home owners being foreclosed on but at the same time the market needs to adjust and this can only take place when the high number of foreclosures and short sales are a thing of the past.