According to an article in the Bloomberg, the foreclosure crisis is likely to worsen as more than 7 million properties facing imminent foreclosure hit the housing market in the next year or two.
The article said:
“The “huge shadow inventory,” reflecting mortgages already being foreclosed upon or now delinquent and likely to be, compares with 1.27 million in 2005, the analysts led by Laurie Goodman wrote today in a report. Assuming no other homes are on the market, it would take 1.35 years to sell the properties based on the current pace of existing-home sales, they said.”
Another year and half of this foreclosure crisis could cause a terrible domino affect of foreclosures and defaults that affect otherwise financially healthy homeowners. Homeowners selling their homes for non-foreclosure related reasons could face depressed values and even be forced into short sales because of the low home values caused by nearby foreclosures. And because many lenders fail to consider loan modifications on home loans that are not delinquent, homeowners facing upside mortgages due to the foreclosure crisis could find themselves out of options.