I have already written about this one, so before you read below; read here.
The story: (H/T Jazz Shaw)
The $25 billion settlement with banks over foreclosure abuses may result in a wave of home seizures, inflicting short-term pain on delinquent U.S. borrowers while making a long-term housing recovery more likely.
Lenders slowed the pace of foreclosures as they negotiated with attorneys general in all 50 states for more than a year over allegations of faulty and fraudulent paperwork used to repossess homes. With yesterday’s agreement, banks are likely to resume property seizures.
“The best thing about the settlement, frankly, is that it will be done,” said Stan Humphries, chief economist for Seattle-based Zillow Inc. (Z), a provider of home-sales data. “The shadow of the settlement hung over the market for a year now.”
The backlog of foreclosures has trapped homeowners in properties they can no longer afford, depressed neighborhood prices by increasing the number of abandoned homes and led banks to tighten mortgage credit standards because of uncertainty about the cost of their potential obligations. Foreclosure starts fell 46 percent in December from October 2010, when the investigation into the so-called robo-signing of mortgage documentation began, according to Irvine, California-based RealtyTrac Inc.
via Foreclosures to Climb in U.S. Before Bank Deal Helps Housing Market Heal – Bloomberg.
At the risk of sounding like, of all people, Ron Paul; This is what happens when Government gets involved with the private market. It gets screwed up and attempts to fix it, screw it up even worse! Let this be a lesson to our Government and all involved; do not involve yourself in private markets, like housing. It only messes things up. The sad thing is, a whole bunch of people had to suffer, because a group of liberal elitists decided that a tried and true system just had to be tweeked to give to the “have-nots” and from what I read above, the suffering is just beginning.