Moe Bedard in Investors Business Daily:
Even as a few rays of hope peek out for housing, a dark cloud of unlisted and unsold foreclosed homes threatens to further delay a recovery and undermine lenders’ financials.
The government is riding in with new programs almost every week, including Monday, that may rescue lenders. But they also cause paralysis in the short term.
Lenders are holding “between 600,000 and 700,000 residential properties that are not on the multiple listing service (MLS),” said Rick Sharga, senior vice president at RealtyTrac, a foreclosure listing firm in Irvine, Calif.
Window Dressing?
Specialists who handle loan modifications for borrowers say that despite a flurry of new programs, few mortgages are being reworked.
“Lenders aren’t doing anything,” said Jim Richman, president and founder of Richman & Associates, a real estate and debt restructuring firm in Glendale, Calif. “They’re waiting to see if the government will bail them out.”
“Everybody is stalled 100%; the lenders aren’t doing anything” with modifications, said Moe Bedard, president of Loan Safe Solutions, a Corona, Calif.-based firm that does mortgage auditing for attorneys.
Some shadow inventory may not be listed publicly because some lenders sell foreclosures via in-house divisions, says Bedard. Or, lenders may be selling the defaulted paper to investors. But these gray market sales can’t account for all unlisted foreclosed properties.
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