Rumors goin' round: I continue to hear that the banks are holding on to a huge amount of foreclosed property. Apparently, the banks are doing this in order to keep home values high and to not flood the housing market, thereby driving home prices down again. The second part of the rumor is that the banks will release this "shadow" inventory at the first part of the year. I've had strong doubts about this. At this point, the banks have nothing to gain by holding anything. Banks lose money by holding non-performing assets and gain money by making mortgages.
There's finally a study that debunks the shadow inventory myth. Today, Lansner on Real Estate says foreclosures in the state are down by half. Here's the link. And here's a quote:
“We continue to hear about the foreclosure wave that is coming after the election or after the New Year. There is clearly no foreclosure wave in sight,” Michelle Lenahan writes in Foreclosure Truth...".
