Foreclosures Will See Initial Rise Despite Bank Deal

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The United States government and the big banks were applauded after coming to a twenty-six billion dollar settlement. While the settlement was certainly good news for most struggling homeowners, it may prove to be a gift and a curse.

Many struggling homeowners received good news in that their current mortgage loans would be reworked, or that they would receive a small payment as part of the settlement. However, with the settlement finally complete, the harsh reality is that there will soon be a sudden increase in foreclosures against delinquent borrowers.

Many foreclosures had been delayed over the past year due to the negotiation of the settlement. Now that the banks and the government have come to an agreement, it is likely that the banks will start processing the backlog of foreclosures at a far more efficient pace.

The initial wave of foreclosures could have a brutal impact on the residential real estate market, as analysts expect it to drive down prices for the time being. The market had finally started to show signs of improvement in recent months. While most analysts are predicting prices to fall, some believe that the declines will not be nearly as bad as others are making them out to be. With the housing market finally showing signs of improvement, analysts think that the banks will be very mindful of how they bring foreclosures to the market.

There has been hope that 2012 will be the year that the housing market truly starts its recovery. However, with the wave of foreclosures expected to occur in the next few months, it may not be until 2013 that true recovery takes place.

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About Drew Wilson

Drew focuses on the Commercial and Mortgage/Finance categories.

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