The foreclosure settlement reached yesterday between 49 state attorneys general and the five largest mortgage servicers could result in a wave of foreclosures that would temporarily depress the American housing market even further, Bloomberg News reported.
Banks had waited until an agreement was pounded out to proceed with many foreclosures, Bloomberg said, and now that the agreement is finalized they will likely push forward, foreclosing on the backlog of underwater properties. The number of foreclosures initiated in the U.S. fell 46 percent between October and December of 2011, according to data from RealtyTrac, a real estate analytics firm. The investigation into foreclosure abuses began in October of 2011.
“The best thing about the settlement, frankly, is that it will be done,” Stan Humphries, chief economist at Zillow, told the news service. [Bloomberg]