National wave of new foreclosures may never come to fruition
Housing pundits have long warned of a backlog of foreclosures waiting to flood the market and further sink housing prices. But according to the Wall Street Journal, the bursting of the pipe may never come to fruition. New foreclosure filings remain well below their levels from this time last year, down 31.1 percent year-over-year in March, according to LPS applied analytics. Delinquencies are also down 8.8 percent over that time frame.
While there’s been a slight month-over-month uptick, it’s far from the foreclosure disaster experts predicted.
The Journal attributed the relative lack of foreclosures to the $25 billion mortgage-servicing settlement the government reached with banks in February. It required that $17 billion be used to help owners stay in their homes, including $10 billion towards writing down loan balances.
While lenders take time to sort through the aid packages, foreclosures might continue their slow, steady drip for many years — rather than hit the market in one fell swoop as housing analysts previously feared. [WSJ]