With was is being dubbed ForeclosureGate, our friends at B of A have suspended throwing people out of their homes for non-payment because of a slight issue with who signed what. Is this a good reason for stopping the foreclosures? I don’t know, it’s a legal thing.
Seems a little weird though. You are either paying or you are not. But that’s a different discussion. What we have here is that the legal action is stayed and what will happen is that the shadow inventory we have all been waiting for to hit the market is not going to appear anytime soon. So, there will actually be less homes on the market.
That means less choices for those that want to buy, speculators will be on the sideline because there is no cheap homes to buy and the slow moving economic rebound will cause a bit of demand to increase. These will not be reflective is all markets but it may be in some.
Sounds great, huh? Well, here are the detriments:
1. Mortgage rates will go up because of what looks like a recovery. (P.S.- Refi now!)
2. This is only temporary…..after the legal stuff is cleaned up, the homes will fly onto the market and guess what? Values will go back down to where they were unless the demand increases.Hopefully, that demand will go up and the balance will work out.
But, thanks again B of A. We appreciate the screw up!
