More waves of foreclosure: But not NY

http://online.wsj.com/article/SB10001424052748703562404575067452797224606.html?mod=WSJ_hpp_LEFTWhatsNewsCollection The studies—by John Burns Real Estate Consulting Inc. and Standard & Poor's Financial Services LLC—both conclude that most efforts to modify loans with easier terms will delay, not prevent, the loss of homes to foreclosure. The John Burns study estimates that five million houses... [more]

http://online.wsj.com/article/SB10001424052748703562404575067452797224606.html?mod=WSJ_hpp_LEFTWhatsNewsCollection The studies—by John Burns Real Estate Consulting Inc. and Standard & Poor's Financial Services LLC—both conclude that most efforts to modify loans with easier terms will delay, not prevent, the loss of homes to foreclosure. The John Burns study estimates that five million houses and condominiums on which mortgages are now delinquent will go through foreclosure or related procedures that put them on the market over the next few years. That would represent the bulk of the estimated 7.7 million households behind on their mortgage payments. The problem is largely concentrated in Arizona, California, Florida and Nevada. The shadow inventory is equivalent to 27 months of sales in Orlando, 24 months in Miami and 18 months in Las Vegas, the study estimates. Loan modifications "may be helping marginally, but they are not going to solve the whole problem," said Diane Westerback, a managing director at S&P. Loan servicers, firms that collect payments and handle foreclosures, seem to have "nearly exhausted the supply of plausible candidates for loan modifications" and will find that many loans are "unredeemable," the S&P study says. As a result, servicers increasingly are looking to arrange "short sales," in which homes are sold for less than their loan balances. [less]