Real Estate Market Suffers From Shadow Inventory
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The growing shadow inventory of homes held by lenders for various reasons, including the fact that they can't find the paperwork to clear titles is causing the depressing market values these days and continues to stifle the economic recovery according to DSNews. Craig Crabtree, senior vice president and general manager, Equifax Mortgage Services says,
"Shadow inventory and real estate owned properties are still playing a dominant role in today's mortgage market and slowing the pace of economic recovery. While we are seeing stabilization across multiple sectors of lending, there remains a significant volume of delinquent first mortgage loans, which has slowed the foreclosure process. Until these foreclosures are processed, the mortgage market will continue to impact economic growth."
The problem I'm seeing is that we might not have buyers for all these properties and when our ADD sets in and we forget how bad securitized mortgages really are, they'll crop back up like weeds in your garden and we'll all be back in our homes again soon with mortgages we can't afford and this vicious cycle will come full circle.
It might be better to concentrate on renting the shadow inventory. Lenders still years ahead of sifting through paperwork to be sure there is no fraud involved.