More Foreclosures Ahead

Last week the Wall Street Journal reported over 2.8 million households had receive at least 1 foreclosure notice in 2009. That is the highest amount on record, and the projections are that 2010 will easily surpasse this figure, mainly due to high unemployment and rate resets. In addition President Obama's Loan modification program has resulted in only 700,000 loan modification requests of which nearly half are already back in default.

So what does this all mean. The housing sector is in no way near any recovery, despite what the media is reporting. This concept that there is a jobless recovery in the economy is no more than smoke and mirrors. The effects of the stimulus package have boosted only the largest wall street firms and those effects will be wearing off shortly. Then What?

The truth is not so rosey. The foreclosures being held back by banks in their "shadow inventories", the amount of new foreclosures occuring, the lack of any real loan modifications for the majority of distressed homeowners. high unemployment will all lead to the continuing decline in housing values and more bank owned properties will need to be marketed.

For some this will be what is needed to be able to afford buying a home, to others, this will mean they will walk away from their homes. Either way recovery in the housing market is at least 1-2 years away.

In my view this is just another example of the priorities of Wall Street and The Government and leaving main street far behind. Remember this come November!