Foreclosure Freeze May Slow U.S. Homebuyers on Legal Worry

This could lead to a larger shadow inventory and even a bigger wave of homes hitting the market once this issue is resolved.  Also you see tightenting of the credit market.

“Some people are breathing a short-term sigh of relief because the likelihood of distressed sales putting downward pressure on home prices has been put off,” Lawler said. “But no one is breathing a long-term sigh of relief because when these properties eventually come on the market, we’ll have both the confidence problem and the price problem.”

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