About 116 lender-owned homes are on the market or under contract in El Mirage, according to local real estate listings. Now block after block is pockmarked by properties with overgrown shrubs, weeds and foreclosure notices tacked to the doors. Here in this working-class neighborhood of El Mirage, northwest of Phoenix, rows of small stucco homes sprouted up during the boom. “Lenders have a strong incentive to clear out inventory in a controlled and timely manner, but if you had problems on the front end of the foreclosure process, it should be no surprise you are having problems on the back end.”Ī drive through the sprawling subdivisions outside Phoenix shows the ravages of the real estate collapse. “These shops are under siege it’s just a tsunami of stuff coming in,” said Taj Bindra, who oversaw Washington Mutual’s servicing unit from 2004 to 2006 and now advises financial institutions on risk management. The pileup could lead to $40 billion in additional losses for banks and other lenders as they sell houses at steep discounts over the next two years, according to Trepp, a real estate research firm. The reasons for the backlog include inadequate staffs and delays imposed by the lenders because of investigations into foreclosure practices. In Minneapolis, they are bringing in at least six foreclosed homes for each they sell, and in once-hot markets like Chicago and Miami, the ratio still hovers close to two to one.īefore the housing implosion, the inflow and outflow figures were typically one-to-one. In Atlanta, lenders are repossessing eight homes for each distressed home they sell, according to March data from RealtyTrac. Regions that were hardest hit by the housing collapse and recession could take even longer to recover - dealing yet another blow to a still-struggling economy.Īlthough sales have picked up a bit in the last few weeks, banks and other lenders remain overwhelmed by the wave of foreclosures. As a result, home values nationally could fall 5 percent by the end of 2011, according to Moody’s, and rise only modestly over the following year. Over all, economists project that it would take about three years for lenders to sell their backlog of foreclosed homes. “Housing prices are falling, and they are going to fall some more.” “It remains a heavy weight on the banking system,” said Mark Zandi, the chief economist of Moody’s Analytics. With the spring home-selling season under way, real estate prices have been declining across the country in recent months. Five years after the housing market started teetering, economists now worry that the rise in lender-owned homes could create another vicious circle, in which the growing inventory of distressed property further depresses home values and leads to even more distressed sales.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |