Foreclosure Delays Cast Shadow on Real Estate Market
Seattle Bubble describes the unusual foreclosure picture best: “Foreclosures Establishing an Elevated Flatline.”
Despite a national trend of foreclosure footdragging, RealtyTrac puts Washington State at 15th highest for foreclosure in the U.S., looking at filings for the first two quarters of 2011. Overall, RealtyTrac claims that 1 in every 632 Washington housing units received a foreclosure filing in June 2011.
Seattlepi.com quotes the RealtyTrac CEO saying: “”We estimate that as many as one million foreclosure actions that should have taken place in 2011 will now happen in 2012, or perhaps even later.”
Seattle Bubble marks that trend with a post titled “The Shadow Inventory Next Door,” while over at Redfin, Glenn Kelman explains why firesale foreclosures are more likely to be purchased by hedge funds than middle class bargain-hunters:
The problem is that the programs designed to ease credit for the middle class, Federal Housing Administration (FHA) and Veterans’ Administration (VA) loans, impose rules that have completely diverged from the new realities of a distressed market. Banks liquidating as-is properties at fire-sale prices will almost never agree to the repairs needed to make a home move-in ready, as required by FHA and VA loans. And banks aren’t waiting for additional inspections, appraisals or paperwork required by FHA and VA loans.