Comments on: Foreclosure freeze could put banks at home in DC http://blogs.reuters.com/breakingviews/2010/10/07/foreclosure-freeze-could-put-banks-at-home-in-dc/ Mon, 26 Sep 2016 03:26:00 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: yr2009 http://blogs.reuters.com/breakingviews/2010/10/07/foreclosure-freeze-could-put-banks-at-home-in-dc/comment-page-1/#comment-4042 Fri, 08 Oct 2010 16:34:58 +0000 http://blogs.reuters.com/columns/?p=4261#comment-4042 Many potential home buyers have learned that buying a foreclosed property may look like a good deal at first sight, due to the lower asking price, but it’s complicated, lengthy, and in the end, costly too.
This is why the banks are already finding it increasingly hard to get rid of foreclosed homes they’ve come to own, and there’s a substantial clog in the market, as well as a growing ‘shadow inventory’.
This legal problem of epic proportions is a new wrench stuck in the banks’ wheels, and it’s going to impede their efforts to raise cash from selling real estate, as it drives home prices further down. At the same time, this is putting the banking system under additional pressure, as the value of leveraged, mortgage based derivatives plunges.
This thing is also going to make it less appealing for banks to lend money to people looking to buy a house, further weakening demand.

If you think 2011 is going to look better than 2010, think again.

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