Is anyone nervous about banking industry plans to delay foreclosures? Here in Sonoma County, California the number of REO homes for sale is increasing at a rate of 20-30% per month. In some areas there are so many foreclosures that prices have rolled back to 2002 levels and the banks still can't sell them. Foreclosure sales are becoming comps which is driving prices down further. People can't refinance because values have eroded and equity is insufficent.
Now the banks want to delay foreclosures explaining that they are trying to work out other solutions with homeowners. What is behind this? Is it truly an attempt to work things out? Are they being slammed with loan defaults? Are we in for another major financial market adjustment?
What's your opinion?