As 2011 began 12 months ago, few observers were making rosy predictions. But many expected the housing standoff to be at least partially resolved by year’s end.
It was not to be.
2010 ended with the foreclosure process all but paralyzed, in the wake of signing scandals involving the big mortgage servicers. Many thought that gridlock would end with the holidays, and foreclosures would revive with a vengeance beginning in January 2011.
Foreclosure rates did go up again, but they took most of the year to regain momentum, and they’re still below pre-scandal levels.
At the same time, the Office of the Comptroller of the Currency (OCC) along with other agencies issued Cease and Desist orders against several mortgage servicers. They directed the servicers to review their foreclosure procedures and submit plans to reform them. The OCC would then review the plans and decide on whether to approve them. Needless to say, that process chewed up several months.
Meanwhile, shrewd homeowners realized they could live rent-free for years while their mortgage servicers plodded through an ever-lengthening loss mitigation process.
The result? Very little progress can be detected in the struggle to revive a housing market already on life support. Jim Cone of RealtyTrac has called 2011 “the year of foreclosure litigation, strategic default, failing foreclosure law firms and shadow inventory.”
Accurate enough. We prefer to call it the Year of Nothing: Things simply stopped.
So, what will 2012 hold? Cone writes, “The dysfunctional and delayed foreclosure process may finally be leading lenders to usher in the much-anticipated ‘year of the streamlined short sale’ in 2012.”
From the Year of Nothing to the Year of the Streamlined Short Sale.
Has a nice ring, don’t you think?