According to a report from the Mortgage Bankers Association (MBA), 4.3 million “new” mortgage delinquencies are currently in the process of “serious delinquency” and/or foreclosure at this time. This does not count the roughly six-and-a-half million homes lost to foreclosure already since 2006[1]. While these numbers do indicate that the market is slowly working through its serious problems, many of these homes will “eventually be put on the market at reduced rates [and] continue to weigh on housing prices for some time to come,” predict experts. Many fear that an influx of lender-owned homes on the market – and many lenders are, at this point, just as motivated as any other seller to price homes low, sell them and get them off the books – could depress home values even further, creating a “vicious cycle” that keeps home values depressed for the foreseeable future.
However vicious this cycle may be, however, it seems that it is inevitable if the distressed and foreclosed homes on the market are ultimately going to work their way through the system. Do you think that the government should try to “solve” the problem or does the market just need to work the issue out for itself?
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[1] http://www.totalmortgage.com/blog/mortgage-rates/4-3-million-homeowners-seriously-delinquent-on-mortgage/12001
