Monday, November 1, 2010

Foreclosure shadow inventory will take more than 40 months to clear

Having such a large existing shadow inventory puts pressure on new home sales. And we have seen what new home sales are doing.
The shadow inventory of delinquent loans, foreclosures, and REOs stands at 7 million homes, which would take the market more than 40 months to clear, more than three years, according to Fitch Ratings.
And as major banks fix recent problems in the foreclosure process, that number will only grow. Liquidation and resolution timelines were extended because of the affidavit issues. Consumer advocacy groups and state attorneys general offices filed lawsuits, and regulators launched investigations.
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