S&P: Shadow Inventory Still a Concern. Reason to Extend Fed’s MBS Program?
Standard & Poors today released “The Shadow Inventory Of TroubledRemortgages Could Undo U.S. Housing Price Gains”. Noting that the Case Shiller/S&P Home Price Index had risen 3 percent since hitting its abridged in May of final year, today’s report speculated that the increase may possess been the result of the temporary reduction in foreclosures. But, it says that many servicers have nearly run out of plausible candidates for loan modifications as well as will find that many loans cannot be salvaged. What S&P calls a “shadow inventory” may take as much as 33 months to clear at the current sales rate. This is a conservative estimate according to S&P as it includes only those loans that are currently delinquent as well as does not take into account current and performing loans that may get into trouble in the months ahead. This increased inventory indicates that home prices may fall again. An S&P spokesperson said that loan servicers are increasingly looking to abridged sales as a solut
Related Questions
- Incase the Fed was forced to extend the MBS purchase program, wouldn it imply some key element of the housing market equation was too weak to be removed from life support?
- Does the funding program extend to screenings when another jurisdiction requires hearings?
- Are there plans to extend the credit fraud protection program past one year?
