Housing and mortgage trends in 2011
Handing over house keys
5 housing trends in fall 2011

Mortgage Trends » 5 Housing Trends In Fall 2011
A new wave of distressed properties will crest
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A new wave of distressed properties will crest

The foreclosure crisis is far from over. Recent reports showed foreclosure numbers dropping. That might have made it seem as though the situation was improving, but the foreclosure machine simply slowed while it was being repaired.

"Many think the banks are fine-tuning their systems after the robosigning controversy and will foreclose at a higher rate in the second half of this year," White says.

If foreclosure inventories do rise, this could put pressure on home prices this winter as they normally drop a bit then, he says.

"It remains to be seen if the market can absorb the additional inventory," he says."If it can, that's great. Otherwise, we might see another price drop."

Peltier agrees there will be more distressed properties on the market for sale, as millions of underwater borrowers struggle to keep up with their payments and simply give up.

But he thinks rather than more foreclosures, there will be more short sales.

"Banks have realized that a short sale is more cost-effective than foreclosure," he says. "Short sales are the preferred path today. But they are still distressed real estate. The problem has not gone away, but the banks are finding alternative solutions."

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