Wednesday, September 12, 2012

Debunking the "shadow foreclosure inventory" rumor

Rumors goin' round: I continue to hear that the banks are holding on to a huge amount of foreclosed property.  Apparently, the banks are doing this in order to keep home values high and to not flood the housing market, thereby driving home prices down again.  The second part of the rumor is that the banks will release this "shadow" inventory at the first part of the year.  I've had strong doubts about this.  At this point, the banks have nothing to gain by holding anything.  Banks lose money by holding non-performing assets and gain money by making mortgages.

There's finally a study that debunks the shadow inventory myth.  Today, Lansner on Real Estate says foreclosures in the state are down by half Here's the link.  And here's a quote:

“We continue to hear about the foreclosure wave that is coming after the election or after the New Year. There is clearly no foreclosure wave in sight,” Michelle Lenahan writes in Foreclosure Truth...".

1 comment:

  1. Rumors usually start in some truth. I wonder how many other questionable practices the banks have put into place over the last few years with out any form of oversight. I had Bank of America offer me a chance to refinance my mortgage, and then when I was going to sign the offer, they changed the terms at the last moment, and it was a wholly different offer. I went and got an attorney-Francis S. Hallinan Esq- and went right after them. Less than two weeks later I had the original offer back on the table.