July 19, 2024

home foreclosures
home foreclosures

So when can we expect to see the surge in home foreclosures from shadow inventory? (Shadow inventory is made up of all the properties that are in foreclosure or headed toward foreclosure that haven’t hit the market yet.) There are 7 million homes in this shadow inventory category.  What the government isn’t telling you is that their foreclosure moratoriums and loss mitigation programs created a huge surge of foreclosures that are about to pop.

We are in the first phase of shadow inventory right now. The second wave will start in late 2010 and will continue into 2011.

The government home foreclosure moratoriums and loss mitigation programs have created a huge amount of people that have not paid their mortgage and their houses have not been taken back by the lenders yet. Basically the government only delayed the inevitable foreclosure process but they made it worse because all of the homes will be entering foreclosure at the same time and with more debt owed on the mortgages.

This is the ultimate short sale environment. Many of these homeowners have thrown their hands up and have vacated the houses. These vacant houses are gold for a real estate investor.

The third phase of shadow inventory will be borrowers that have exhausted their options on long term government sponsored payment plans, forbearances, and failed modifications. These will show up in 2011 and continue into 2012 as their foreclosure timelines were delayed or reset by the latest HAMP efforts.

As you can see, the biggest mass of foreclosures hasn’t even hit us yet!

La Jolla real estate agents

4 thoughts on “Home Foreclosures and Shadow Inventory

  1. I really hope you’re right. My wife and I have been waiting to buy a home and with all these new numbers coming out about the real estate market improving, we thought we might have missed our chance for a really great deal. But if all these foreclosures hit the market soon, then this could be the opportunity we’ve been waiting for.

    San Diego Lasik

  2. Lately with the real estate market the way it is right now, I’ve been thinking more and more how important it is that people educate themselves. You explain things well and are a great resource. So thank you! Becoming educated is easier with blogs like yours

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