Shadow Inventory Leading to a New Housing Crash?

We’ve been hearing some sunny reports as of late regarding the state of the housing market.  Many sources are adamant that we have “hit bottom” and that the foreclosures will not be flooding in as expected.

Of course, there are always two sides to every story.  In this case, there are those market watchers who believe that there is a “shadow inventory” of homes in foreclosure that are looming and threatening to crash the market once again.

From my limited perspective, here in small Chico, CA, I am tempted to lean towards the side that says there is more to come.  As a consultant for many lenders, I have witnessed first hand the efforts the banks and government are extending to distressed homeowners.  There are many loan modification programs in place designed to facilitate homeowners in retaining their properties.  Unfortunately, I’ve seen very few cases the programs actually worked to make that happen!  More often than not, the lender and homeowner go through the motions of the paperwork, only to find that the loan modification program still doesn’t solve the homeowners problems.

Essentially, all the time and effort involved to retain home ownership for many people  has only served to postpone the inevitable process of foreclosure.

For more information, I found this article from Adam Weinstein at DS News  informative:

Sandi Bauman (Chico Homes): Real Estate Agent in Chico, Butte County, California
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