The current foreclosure process mess is causing havoc in the larger economy. The only people getting the good end of the deal are those who are in default. But even if you are trying to sell your house quickly, you might be out of luck. This foreclosure process catastrophe will make it more difficult for you to sell your home.
This mess will cause a delay in the housing market from recovering. It will continue to keep home prices down. Some have said that the prices may rise in the short term since there is less inventory. But the reality is, everyone knows there is inventory out there unless they are really stupid. It’s just that it’s not available at the immediate moment.
A home buyer will try to make the best investment possible when buying a home. That means they will try to get the lowest price possible. And that means they will wait until the foreclosure process mess is over and they will come back into the market.
All of the buyers leaving the market temporarily will cause prices to go down again. It’s simple economics and it’s common sense. Realistically, the uncertainty here will cause both buyers and sellers from making any kind of transactions until this mess is sorted out.
This is just a technicality. The foreclosure process is being reviewed, but at the end of the day, no one expects it to stop happening. No one reads the fine print, unless it is a very important contract with a very potentially hostile party. The banks did not have the infrastructure to have their employees read every single affidavit before they signed.
In any case, it happened and now the economy will suffer for it again. This is ultimately the responsibility of the banks, but it’s also another example of the government not doing their jobs to protect the public. In the end they will need to be allowed to continue to save our economy.