Look out, here comes the shadow inventory! Foreclosures double since this time last year.
According to a report completed by Fitch Ratings, foreclosures on delinquent U.S. mortgages have almost doubled from this time last year. What this means on a national level is that these foreclosures will add additional distressed homes to the real estate market, ultimately driving values down further. Fitch says, due to the increasing inventory of distressed homes, home prices will likely dip another 10% before they stabilize. It seems that the increased activity is due to the banks playing catch-up due to the moratorium on foreclosures implemented from last year’s robo-signing scandal. The rate of foreclosure has nearly doubled on borrowers delinquent for more than six months, while the rate increased about 25% on borrowers who have missed between three and six payments.