By John Galt
June 19, 2011
The foreclosure crisis is officially at half time, sitting in the locker room, and waiting on the coach to come out with a second half strategy. The media, especially some members of the analyst and financial bubblevision press on television, have been desperately attempting to paint a picture of an improving economy resulting in fewer foreclosures and the hope of mortgage modifications helping to stem the tsunami. The statistics are further from the truth than ever. First and foremost, this one extract from Lender Processing Services only paints a partial picture of just how bad the inventory situation remains despite glowing stories of how “investors” are scooping up foreclosed homes at bargain prices:
By my estimates, if the banksters were to actually decide to get their act together and foreclose as the same pace that they were in the 2007-2009 time period the ratio in the chart above would be well over 80:1. At this time there are over 400,000 foreclosures backlogged in the legal pipeline in Florida alone, not including those homes that are seriously delinquent but no action has been taken do the inventory glut in our state. Thus the smoke being blown up everyone’s skirts by the various real estate industry representatives that the situation has normalized somewhat and is under control is nothing more than spin designed to placate worried homeowners so they will not stop paying on their mortgages even if they are upside down by over $100,000 or more.
The New York Times of all places published a fascinating article on the backlog indicating that in some states like Florida, New York, and New Jersey it would take over a decade if not longer to clear the dockets at the current pace, even if no more foreclosures were filed. Despite the belief that it is better in non-judicial states like California it moves faster, the banksters are dragging their feet there also where it now takes upwards of three years from filing to final foreclosure. The proverbial mystery “shadow inventory” is only an estimate by most but if the banksters were required to hold the valuations of these homes and mortgages at real market prices on their books (yes, ye old mark-to-market) the picture of the financial health of the banking system and America’s economy as a whole.
Read the rest of the article on the foreclosure backlog nightmare from the New York Times published Sunday June 19, 2011 at: