When Will We Notice the Elephant in the Room?

Services for Real Estate Pros

elephant in the roomWhen Will We Notice the Elephant in the Room?

 There has been more frequent discussions recently of renewed interest in housing, slowly increasing sales and supposed stabilization in prices...but the elephant in the room is slowly growing.


That elephant is foreclosures. REO inventory is rising, over 4 million seriously delinquent loans, even the problems appear to have peaked, there are still over 600,000 properties in REO, which will only put more pressure on prices when they come to market.


Over 14 million homeowners are "under-water"... 4 million of those by more than 50%.


Bottom Line...Foreclosures are ramping up again and can very easily endanger today's fragile housing recovery.


Reducing Mortgage Balances to today's Current Market Value is the best way to stabilize the housing industry.


Comments (6)

Maria Couto
RE/MAX Premier - Berkeley Heights, NJ
Realtor with "Results That "MOVE" You'

I agree with you. We are about to get hit again by the foreclosed properties that the lenders have held back, but there coming. However, I think there are still very good deals out there now.

Feb 07, 2011 02:24 AM
Andrew Mooers | 207.532.6573
Northern Maine Real Estate-Aroostook County Broker

Not every market is as dire as you broadcast. The negative news may apply in some places but Maine is 46th LOWEST for FSSR. (Foreclosure, short sale, repossession). The lower priced all the time homes,  safe rural areas of the country are not spiked up and down messed up. Not covered with burst property bubble market debris.

Feb 07, 2011 02:25 AM
Laura Reilly
Real Living Real Estate Professionals - Redding, CA
Home Sales Realtor - Short Sale Team Member - Redd

Nice Pic. Is there a universal way to reduce the mortgage balances?

Feb 07, 2011 02:25 AM
MJ Anton
Ormond Beach, FL

@ Maria...thank you for taking the time to comment...& I agree that there are some excellent deals out there

@ Andrew...every market is unique, certainly in terms of the range of the value from the peak to today

@ Laura...unfortunately not, we have been working with a Private Investment Group to buy mortgages in bulk from the bank & each bank/lender has set specific criteria

Feb 07, 2011 02:01 PM
Debbie Jean (DJ) Artrip
Debbie Jean (DJ) Artrip, Cardinal Real Estate, Northern Mich - Hawks, MI

Love the photo~ Living in Michigan (where, at one time we made cars) our markets are severly impacted by the REO markets.  It was reported that Flint has a 20% vacancy rate.  How do we come out to that? The next five years will be interesting.  DJ

Feb 07, 2011 02:08 PM
Craig Chapman
Call Realty / Access Appraisals - Mesa, AZ
The Value Guy

I agree with your concept. It is mind boggling to me why lenders & investors would rather eat a $100k or more on a short sale or REO than do a loan mod that would keep a person in the house & possibly loose a lot less.  And the loan mods typically offered don't do enough to give people a motivation to hang on.

If someone was $100k upside down, even reducing their loan amount by $50k in some cases would be enough to help.

I just read that some gov. plan here in AZ is offering to match what a lender is willing to eat on a loan mod up to $50k & that B of A is signed up.  It means, as I understand it that if someone was say $100k upside down, that the loan mod would get the lender to eat $50k & that the gov. program would then match the amount to the bank so the total reduction to the borrower would be $100k.  Wow, I hope it works. 

Mar 03, 2011 07:41 AM