The Real Deal Miami

Foreclosure stall could have far-reaching negative effects: experts

October 11, 2010 11:45AM

As more banks put holds on their foreclosure proceedings, some experts warn that a protracted freeze on foreclosures could be detrimental to the overall economy, according to the Hill. Bank of America, JPMorgan Chase and PNC Financial are among the institutions that have announced suspensions in home seizures over the last two weeks, in response to growing concern over how these foreclosures are carried out. Anthony Sanders, a real estate professor with George Mason University, said that he’s concerned over how the foreclosure stall could impact the economy. “The moratoriums, both state-mandated and self-inflicted, can be incredibly destructive to the fragile recovery or the housing and housing finance markets,” Sanders said. “Consumers looking to get back into housing are even more fearful than before. This can lead to further house price declines.” [Hill]