Foreclosure crisis already affecting delinquency rates
More trouble on the effects from the foreclosure crisis. This has the potential to be much greater impact to housing. It stops the normal market mechanism of siezing property to function properly. I know that if I had a loan with Bank of America, and was delinquent, I would be celebrating, via WSJ:
Bank of America Corp. last Friday agreed to halt all foreclosures and foreclosure sales, the first bank to do so. On Tuesday, Wells Fargo. said it started a review of all pending home foreclosures in states where certain paperwork was required.
Some homeowners are beginning to wonder why they should pay a mortgage at all. Others haven’t paid in months.
As we write today, foreclosed homes are being pulled from the market, and buyers—especially investors intent on quickly reselling or renting out foreclosed properties—are retreating to the sidelines amid growing uncertainty over the extent to which banks filed fraudulent foreclosure documents.
That’s troubling for the market because foreclosure sales have been a big part of recent closings, helping some markets limp closer to stability. Housing can’t truly recover until the foreclosure crisis ends.