WASHINGTON– As new foreclosure notices reach the troubling milestone of 10,000 per day across the nation, it is increasingly clear that measures taken so far to turn back the tide have failed. This week, a number of officials here have signaled that they have decided to support a shift in strategy.
The shift is overdue. A weak economy has added job losses and falling home values to the mix of toxic loans that prompted the crisis two years ago, making an already difficult situation even more severe. Government measures from foreclosure freezes to loan modifications have only served to stall the inevitable – and to create an ominous backlog of millions of pending foreclosures. Plus, more than one in five homeowners now owe more on their mortgages than their homes are worth, according to the real estate website Zillow.com. No one can predict with assurance whether those underwater homeowners will keep paying on their loans, or take a walk.
And there’s still a long period of pain to come. Some experts see five to ten years of record-high foreclosure rates in California alone. No significant home prices increases nationwide on the horizon in the next year. Or the year after. Or for as long as the next five years. Some 9 million foreclosures are expected by 2012.
While economists search for signs of green shoots, “no one’s really saying anything about this,” noted Guy Cecala, publisher of Inside Mortgage Finance, a Bethesda, Md. publication that covers the lending industry. “There’s really no good news out there, other than we can’t possibly get in much worse shape than we already are.”
Read the rest of the story at the Washington Independent, The Colorado Independent’s sister site in D.C.
Check Colorado foreclosure stats at Realty Trac .