According to Ivy Zelman, a Swiss credit analyst, the average number of days before the foreclosure notice is filed on a home after the borrower stops paying his or her mortgage is 417, thanks to a huge foreclosure backlog that threatens to delay and stall many delinquencies indefinitely, potentially leaving the defaulting homeowner in their home. Add to that a number of possibly mandatory loan modifications and other programs designed to help keep homeowners in their homes, says Joan Tabash-Curbow on her blog, the Curbow Effect, and you get about 800 days of “rent-free” living.
The result? Not only are a lot of people living in distressed and defaulted homes (which may or may not be a problem since at least theoretically they’re keeping them up), but there is a massive “shadow inventory” that Zelman predicts will add nearly 8 months of supply to the existing home inventories in many areas.
Is there a shadow market in your area?
What is your opinion about this “rent-free” living?
Your comments and questions are welcomed and encouraged. Thank you for reading the Bryan Ellis Real Estate Letter!
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