Hey, I just wrote that foreclosure filings were down in 2010 – then, two weeks later the prediction is for record levels in 2011??
Well, as I reported previously, last year the foreclosure pace was slowed by borrowers exploring foreclosure options and snafus with lender paperwork. However 2011 is a new year…
Analysts predict that many foreclosure alternatives, such as in-process mortgage modifications, will be exhausted. Add on the persisting problems of negative home equity, low home prices, high unemployment, and the difficulty many face with tightened mortgage underwriting standards, and you get the picture: foreclosure filings and completions may be pushed to record levels in 2011.
Analysts said the number of REO (i.e., bank-owned) properties could double over the next 12 months to 4 million from 2 million, and it will take at least one to two years to sell those homes.
Increased losses to residential mortgage-backed securities are expected because large inventories of foreclosed homes will be sold at deep discounts. Also the federal government is expected to continue calling for large-scale loan modifications in 2011, which will now affect loans such as option adjustable-rate mortgages since most of the delinquent subprime mortgages have already been modified.
For information on free foreclosure websites click on the tab above: Short Sales/Foreclosures.
DBRS Rating Service, http://www.dbrs.com